Jim Lebenthal Adobe Systems ADBE-Q HOLD Mar 19, 2025

Is -15% over the year. AI is cannibalizing at lot of their products. He moved out of this.

It reports Wednesday, the most important of the week. He bets it will break the spell of undeserved negativity.

It's been a tough stock the past year. People have been worried about the adoption of AI and the impact on Adobe, but Firefly has been encouraging and he expects more people will use this product.

He will continue to hold -it is at an attractive valuation and growing its top line by 10% and trades at 20X earnings. It is the industry Goliath in creative space. Analysts wonder about upstarts taking away business and are questioning why they aren't monetizing AI more substantially. However it isn't communicating this and can't separate it out in the features that are included in its products for which it could charge higher prices.

Not the type of company that would suffer from anti-American sentiment. At first, AI enhanced its product abilities; but then this morphed into perhaps products would become obsolete. No reason to get in.

Trading ~17x forward PE with 14% growth rate, so not a bad valuation compared to other tech names. Tepid guidance brought stock down. Below 200-week MA, which is moving lower as well, not great signs. 

She just sold it. It's been undervalued and dominates its space. But trends are slowing and she doesn't know how long the company will prove itself in this space in regards to AI.

Thought it was well positioned to monetize AI and deliver to end user. Didn't execute to the extent that analysts thought it would. Increased competition in the space. Struggling to maintain market share. Still owns, disappointing.

Still growing topline and bottom line at double digits. Spewing off lots of free cash, buying back stock, great balance sheet. Worry is about how will AI affect its business? No evidence yet that it's impacting any of the company's results. Market's not respecting the fundamentals at the moment, maybe rightly so.