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's AI-first ARR passing $500M and growing more than 150% year over year is a strong answer to the belief that AI will only hurt the company. AI is still a small part of the business, but the quarter was a really solid beat and raise. 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 faces an existential AI question: if anyone can edit an image or generate a video with a text prompt, what is Photoshop for? Image and video generation is changing faster than almost any field but code, threatening the complex interfaces Creative Cloud was built on, and Adobe relies on Google, OpenAI, Midjourney and others for frontier models. Canva and startups are attacking pieces of the suite. Pixel-perfect editing and Firefly's $250M ARR, up 75% a quarter, are the bull case. 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 growing almost everywhere even as its stock has fallen more than 65% over five years. Free cash flow per share rose 23% year over year, AI-first ARR more than 150%, platform MAUs over 20%, Acrobat and Express MAUs over 25% and Creative freemium MAUs over 70%. 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 trades at 10x forward earnings despite a massive creative-software moat, as the market writes it off as a dead legacy app because of AI tools. It has trained its AI on billions of proprietary assets, embedded Firefly in 75% of the Fortune 500 and reached $26 billion of recurring revenue, even after regulators killed its $20 billion Figma deal and its CEO stepped down. The next decade could be challenging for growth, though nothing shows signs of that yet. x.com  x.com