Alva - Your AI Investing Agent

Schulz Duggan

AI Supply-Chain Research, Optics/Memory/Macro, Original Asian/US Filings & Pricing

11 Sep, 03:41Latest

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

ADBE

10 Sep, 20:20

Adobe's 14 times earnings says the market thinks generative AI takes more than it gives, and the third quarter did not answer that. All four guided lines beat, yet the full-year ARR growth target stayed at 10.2%, RPO fell to $22.16bn, and AI-first ARR came only as 150%+ growth, no dollar figure, after $500m, under 2% of the base. The next CEO comes from customer experience, not the creative franchise of about three-quarters of revenue. A large stated AI number would change this view. x.com x.com

ADBE

The Few Bets That Matter

Concentrated Equity Investor, AI Infrastructure

12 Sep

ADBE

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

Mostly Borrowed Ideas

Equity Analyst at MBI Deep Dives

13 Mar

ADBE

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

Venu

Position Trader, Market Leaders, Fundamental/Technical Analysis

23 Oct

ADBE

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

Finance Jack

Equity Research

12 Sep

ADBE

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

Nicholas Mugalli

Institutional TMT & Macro Research, AI/Semiconductors/Policy

10 Sep

ADBE

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

John Tinsman

Founder of AOT Invest, Portfolio Manager of AOTG/AOTS ETFs

3 Oct

ADBE

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

Techquity

Technology Investor, Fundamental Research

18 Jun

ADBE

Adobe is best avoided because a very low valuation comes with a highly uncertain future, making the situation amazingly complex. x.com

Alex A.C.

Value/GARP Investor, Semiconductor & Financial Analysis, Electronics MEng

13 Mar

ADBE

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

Jordan

Long-Term Stock Investor, Compounding & Portfolio Construction

11 Sep

ADBE

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

Leandro

Equity Analyst at Best Anchor Stocks

11 Sep

ADBE

Adobe's growth acceleration may not last because its remaining performance obligations are decelerating. @CapitalFaktory is right that Adobe is accelerating growth in 2026 to its fastest pace since 2022, but slowing RPO makes doubts about the sustainability of that acceleration reasonable. x.com

Ask Alva about this thesis

Ask Alva about this thesis