Adobe Systems (ADBE)

It was overbought and has been falling off to today's price which is fairly valued. He feels it has 10 to 11% growth.

He added to it recently. Creative folks won't abandon Adobe's products; it's too embedded in workflows. Fundamentally, this was a great report: beat top and bottom, 11% revenue growth, 15% EPS growth, and net new annualized recurring revenue beat but fell short of forward forecast. Adobe will benefit from AI. You should consider buying this now.

This is a buying opportunity. The AI hype was driving this stock, but that hype is getting flushed out today. They are a leader in their industry, and the costs are too high for a client company to leave Adobe and adopt another company's creative software. Adobe fundamentals remain strong and they will benefit from AI, but not as big as the market was expecting.

Happy that shares are falling today (14%) and wants it to fall another 10% before he buys it back at levels where he previously sold.

EPS of $4.48 beat estimates of $4.38; revenue of $5.18B was marginally above estimates. EBITDA of $2.68B beat estimates by 4%. But guidance was conservative. Adobe's below-consensus 2Q outlook ($440 million vs. $460 million) for Digital Media net new annualized recurring revenue (ARR) stood out as the main sticking point of fiscal 1Q results. Management not raising the annual ARR target after beating 1Q guidance is being perceived as another negative. This is only a minor concern, as Adobe is more focused on new users to its AI products right now and less on monetization. This is the right strategy and should show an improvement in AI monetization in 2H, especially 4Q and in 2025. Digital Experience guidance of just 8% sales growth in 2Q was also disappointing, and may see some improvement in 2H. Adjusted operating margin gained 180 bps to 47.6%, its highest level, but the rate of improvement may taper in 2H on more AI investments. The stock is getting hit hard, but this is not the first time; it remains a global leader with strong expected growth. We would be more inclined to buy once the stock settles in.
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One of the first adopters of AI with Firefly. Mind-blowing commercial productivity application. Trading in low 30s x earnings, with growth still in high teens. Despite runup, still good value and still buying.

A great company. A huge part of the internet is creating content, and Adobe is the centre of that. A long-term buy. Great balance sheet. It won't go up 30% year after year, but you can sleep at night owning this. They're broadly into AI and will continue to benefit from it.

They report this week. Was reiterated a buy on Wall Street. Shares are back to last July's levels, slumping because the street feels Adobe isn't communicating its AI plans. Lags peers like CRM. This report and call are crucial.

Is concerned, because it hasn't performed as well as some software peers. It could be breaking below its 200-day moving average. They need their report next week to prevent this.

Is down 10% in the past month and given the after-hours selling of Salesforce which just reported, ADBE will be pulled down too. Likes the company.

Excellent business. Asset light with high return on capital. Valuation is high, so would wait to buy in weakness. Good for long term investors. Strong moat in the business. Good leadership. Business model (subscription based) is excellent. 

ADBE dropped on news that ChatGPT is going to launch a new video AI generator called Sora. The demos are quite impressive, but it is not available tro customers yet. This could threaten ADBE's video editing dominance, but it has its own product and is not going to standstill. Still, it is a threat, and ADBE needs to be proactive in fighting it. Revenue growth is forecast at 10%+ and EPS growth is forecast at 50% this year and 15% next year. The company has just under $4B net cash and generates $7B in free cash flow annually. We would consider its financial strength to be very solid.
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Benefitting from AI applications. Can more efficiently create a superior commercial product than before. Growing well, earnings growth runway is very good. Multiple's crept up a bit, but not a great concern because of the likelihood of rapid runway growth in revenues, earnings, and cashflow. Very strong on the name. No dividend.

Still runway, price target of $672. So many developments going on in AI. Generative AI can produce images from text. Transform a 2D image to high-quality 3D in 5 seconds. Buy in thirds here around $614, $580, and $550. No dividend.