Adobe: Generative AI Fears Create An Opportunity (Ratings Upgrade)


  • Adobe’s financial results have been strong, especially considering the large scale, with double-digit top-line growth and robust profit margins.
  • The company has a strong net cash balance sheet and is directing free cash flow toward share repurchases.
  • Despite concerns about long-term risks from generative AI, the stock is offering an attractive valuation.
  • I am upgrading the stock to “buy.”

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Adobe (NASDAQ:ADBE) was once considered a clear generative AI winner, but I am now seeing an increasing number of investors grow fearful of potential long-term risks. That is an argument that I have been making for nearly a year, though these

Analyst’s Disclosure: I/we have a beneficial long position in the shares of ADBE either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I am long all positions in the Best of Breed Growth Stocks Portfolio.

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