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's record 12.72% free cash flow yield shows it is cheap, but not yet that the selling is over. That yield, more than triple its norm, signals the market expects AI to shrink its cash flows over the coming years. Forward earnings have more than doubled in five years while the forward P/E fell from about 50x to 15x. A cheap stock can stay cheap; it takes a few quarters of steady revenue and growing cash flow to prove the AI fear wrong, with buybacks gaining power the longer it stays low. … Show more

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 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 is not re-accelerating: management guides growth down to 9-10% with operating margins falling, and more pressure lies ahead. That makes buying every dip at about 16x earnings a mistake, even as @qualtrim points to 12% revenue growth and a 47.4% operating margin. x.com  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 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 is not the SaaS stock to buy, even though SaaS stocks should see a revival, because more exciting second-tier names with similar buyback programs are on sale. Adobe's new $25B buyback, enough to retire about 25% of its shares at the current price, shows high confidence in its resilience rather than cash flows imploding from AI disruption. 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 is falling despite growing revenue and earnings because AI is disrupting its core image- and PDF-editing products, and that kind of disruption simply takes time to show up in the numbers. Newspapers after the internet and BlackBerry after the iPhone followed the same path. Anyone using AI to edit images or PDFs can see it. x.com