Adobe is showing it can monetize AI, undercutting the bear case. AI ARR passed $650M and more than doubled year on year, monthly active users crossed 1 billion, and Creative freemium users topped 100M, up over 70%. New customers include Amazon, IKEA, DHL, Marriott and Wells Fargo. Revenue rose 13% to $6.76B with heavy buybacks, yet the stock is valued almost for bankruptcy. Guidance rose only slightly, perhaps to set a low bar for new CEO Anil. x.com 

Adobe's cash generation and growing AI subscriptions give its tentative turnaround fundamental support. It has $10.59B in free cash flow; revenue and EPS are expected to grow at double-digit rates through 2028, while AI-first ARR is up 150% year over year and Firefly ARR 40% quarter over quarter. Its Stage 1 base is attempting to break a long downtrend. x.com 

Adobe remains the best example of what not to buy because AI has had minimal impact and its backlog is slowing rapidly. Management chose user acquisition over monetization, as Duolingo did, leaving open whether users stay when prices rise; for now, waiting to monetize looks the same as being unable to. Free or cheaper tools that match its specialist subscriptions could cut usage, RPO and cash generation. When acceleration and margin expansion are everywhere, owning neither makes little sense. … Show more

Adobe is a bit undervalued, though not significantly, at 13x earnings with 13% revenue growth. Its falling profit margin is concerning, and AI threats are growing as image generation improves. x.com 

Adobe's choice of Anil Chakravarthy as CEO signals that its next chapter is AI-driven growth, and a CEO change alone is no reason to alter the thesis. An internal operator with enterprise, data and AI-product experience, he takes over from Shantanu Narayen on December 1. The real risk is the departure of David Wadhwani, who ran Creativity and Productivity, the products most exposed to AI. Q3 results on September 10 must show whether AI is adding growth or just defending the franchise. x.com 

Adobe's creative moat is under direct siege from frontier AI models, and a leadership change away from its creative franchise compounds the risk. Agent workflows disintermediate Creative Cloud at the low-to-mid end, and Adobe is spending to retain users rather than add net new subscriptions. Incoming CEO Anil Chakravarthy comes from enterprise customer experience while creative chief David Wadhwani leaves, while Creative and Marketing is 71%+ of subscription revenue. A $160 target stands. x.com  … Show more

Adobe's post-earnings drop looks like irrational sentiment, not a fundamental problem. Revenue and EPS beat, Q3 and full-year guidance rose, and AI-related revenue grew over 300% year over year, showing AI is becoming a growth engine rather than destroying Adobe. It keeps buying back stock at scale, and given its profitability and growth the valuation isn't expensive; long term it remains an undervalued software company. x.com 

Adobe is priced below its Covid-crash intraday low even though it now makes 3x more money with 20% fewer shares, and its best run of profit growth has come during the AI era. It beat last quarter's guidance and raised its full-year outlook, yet trades around 10x current, a low price for growth that should destroy the bear narrative. It also bought back 9.5M shares for over $2.3B. x.com  x.com 

Adobe's problem is no longer valuation but bad sentiment toward software companies. It fell after hours in sympathy with ServiceNow despite trading around 15x trailing and 10x forward earnings while still growing 10%, and none of that matters right now. To recover, Adobe needs more collaborative projects and joint events with leading AI companies so it is seen as definitively part of the future. x.com 

Adobe is priced like an AI casualty at 11x forward earnings, yet its AI business is working. Q2 revenue grew 13% to $6.62B, guidance rose to $26.5-$26.6B of revenue and $24.35-$24.45 of EPS, and AI-first ARR more than tripled to over $500M. Part of the ARR slowdown is deliberate, deferring Creative Cloud pricing changes to push freemium, a choice that can reverse. At 14-16x forward the stock would be $340-$390. Risks: a two-year multiple compression, a CFO exit and a CEO search. x.com