$Adobe(ADBE)$  Adobe shares trading at $304 at time of writing is one of the biggest cases of market mispricing I've seen.

Adobe's revenue has continued to grow double digits consistently and predictably, monthly active users have increased 25% in 2025, with 75% of individual Creative Cloud converters new users and not just upgrading from existing software. Adobe Express has 8000 new business customers, a 6x increase from 2024.

The creative suite and ecosystem is a wide moat, and subscription revenue is sticky and predictable.

And yet the stock is crashing, priced like a dying company.

Look at the whopping 47 new features announced in Adobe MAX. So many of these new features leverage Al to improve workflows and save time and is welcomed and celebrated by creatives.

As an Adobe Creative Cloud user myself, I've never been happier.

The market just doesn't understand the realities of the creative industry, workflows, or demands, and think Al is going to just magically replace creative SaaS.

They don't understand that brands don't want Al slop because customers don't want Al slop, if said Al slop can even deliver anything even close to what these brands need.

They don't understand that Al does not allow for granular control, and even if you generate assets, you'll still end up using Adobe software to tweak things (e.g. colour grading/compositing).

They don't understand how Al is in fact benefiting Adobe rather than threatening Adobe.

Canva and Figma are not even close as competitors, and even Figma stock has crashed over 75%.

Only maybe CaptureOne is competing with Lightroom, and DaVinci Resolve is competing with Premiere Pro.

With a base case of 8 years of 12% earnings growth and a terminal growth rate of 5%, discounted at 8%, the stock should be trading at $439.

Even with a 10% discount applied, the fair value should be $371.

I give it another 2 or 3 more earnings reports when the market sees Adobe revenues continue to grow and realises that this Al doomer narrative is irrational bullshit and Adobe stock will explode higher.

I mean even if Al replaces us all at our jobs, what will people do? They'd probably take up a creative hobby with their time.

The 8 years of 12% growth is just my base case. A bull case can be made that it will be way longer than 8 years, or that earnings growth may hit 20%.

I feel like the men in suits are disconnected with reality on the ground on this one.

This seems like Google all over again.

The market thought ChatGPT and AI will kill Google Search, and that the rise of TikTok and shortform content and AI slop will kill YouTube. Google's stock price tanked and remained depressed for months. But both search queries as well as long-form video watchtime has in fact continued to increase, and with Gemini taking off and being integrated into iPhones now, Google stock price has exploded.

I was consistently adding to my $GOOGL position when it was trading for under $180, and I'm going to do the same for $ADBE now. Let's see how this ages.

(Disclosure: I am an Adobe Creative Cloud user and have just bought a 4% position in $ADBE.)