Adobe is best avoided because a very low valuation comes with a highly uncertain future, making the situation amazingly complex. 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 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's ARR deceleration is not a one-off quarter but has been consistent for nine quarters. Whether recent freemium growth can drive revenue acceleration in coming quarters remains to be seen. x.com  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 pushing off 8-year lows as revenue growth accelerates, after testing that range on its highest weekly volume ever, a sign the market may have it wrong. 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 could easily go the way of PayPal, its best analog: a mature consumer-facing large-cap tech company that attempted a poorly received large acquisition as growth stalled, then changed executives. Growth is likely to decelerate further amid pricing pressure, buybacks won't matter much in the short term, and more talent will leave once a CEO is picked. The stock is only optically cheap. 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 printed its first visible cost consequence of generative AI: cost of subscription revenue grew 24.1% versus 13.7% subscription revenue growth, cutting gross margin from 89.28% to 88.71%. Application companies rent compute rather than build data centers, so going compute-heavy shows up in cost of revenue while capex stays near 1.3% of sales. Nine-month margin is flat and the cost line isn't broken out, so this is one quarter; two or three more would confirm a trend. It trades at 14x. x.com