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 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 8x P/E signals that its outlook numbers are unreliable, its capital allocation is poor and it is likely a casualty of AI. It spent all its free cash flow buying back shares at $400 and is on a direct collision course with AI; no one can say its products will be as crucial as in the last two decades. Unlike Meta in 2022, whose ads business was never impaired, there are too many unknowns. It could work or stagnate for years, so it sits in the too-hard bucket even if multiples scream buy. … Show more

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 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'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 trades at 2018 price levels even though revenue has grown nearly 200% since then, from $2.2B to $6.4B, and its $25B buyback on a $100B market cap amounts to a quarter of the company. The bottom may not be in yet, but the market won't ignore it forever. 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 

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 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