From Growth To Value
Founder of Potential Multibaggers/Best Anchor Stocks
Adobe is a defender that will struggle against AI disruptors, and defenders often lose. Given how far image generation has come in three years, the next three will be even crazier. Adobe will not be completely obsolete and may wring out a few more years, but it will be hard to compete with technically superior solutions, often priced lower, as with PayPal. AI cannot yet do everything Adobe does, but progress should be fast. x.com x.com x.com
Adobe's consistently decelerating ARR growth is a bad sign that many bulls overlook, though it doesn't mean the company is going to zero. x.com
Adobe's core value is being eroded because gen AI increasingly excels at what Adobe did better than anyone: generating and editing images, video, audio and designs. Adobe likely has no proprietary data advantage, or at least none visible, the gap a quoted post says would leave it more exposed to AI disruption. Bulls may know better. x.com
Adobe is heavily oversold, and some of the best money is made when a story goes from very bad to just bad, before it turns good. Per the Wall Street Journal, Adobe is launching CX Enterprise, an AI agent platform for business marketing tasks, with 30+ partners including Microsoft, Anthropic, OpenAI, Nvidia and AWS. x.com
Adobe's stock is unattractive to investors while the AI rally dominates, even though the company itself is nowhere near dying. Once the AI ride cools off a bit, Adobe can see some rebound. x.com
Adobe's forward guidance was terrible, so it could follow other SaaS stocks that have sold off sharply. x.com x.com
Adobe's professional switching costs make fears of a one-shot replacement look arbitrary. Users would have to retrain for years and migrate established production systems across its many apps; the comparison with Duolingo's streaks and virtual badges is about inconsistent disruption fears, not necessarily a bearish call on Duolingo. x.com x.com
Adobe looks dead because AI can now generate images in 0.6 seconds, undercutting the value case for buying it. The stock is losing its 200-month average, a 20-year average price that only a truly dead name breaks, making it something to avoid. x.com
Adobe and Expedia belong on a short list of businesses AI is going to disrupt, a basket better shorted to hedge long exposure than bought as falling knives. Per Barchart, Adobe has fallen to its lowest price in more than eight years, over 70% below its 2021 high, and @AtlasShrug1 finds it hard to see how Booking and Expedia escape AI travel agents. There are many better places to allocate capital. x.com x.com x.com
Adobe's risk is greatly reduced here: the stock sits at its 200-month moving average and 0.65 Fibonacci support, in a bullish descending wedge after a clean three-wave pullback, while generating $10.1 billion of free cash flow a year. The story now hinges on whether Adobe can pivot fast enough to compete with ChatGPT. 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