The stock is pricing in an AI death spiral. The numbers say otherwise.
Adobe has stabilized and is quietly improving, with cash flow, margins, and ARR all decoupling from the bearish AI-disruption narrative.
📊 Inflection status: STABILIZING → IMPROVING
Fundamentals are turning while sentiment remains fearful.
Atomic signals:
• FY25 operating cash flow >$10B, +28% vs FY23
• ARR $25.2B, +11.5% YoY — growth intact
• Document Cloud +18% YoY (AI Assistant uptake)
• GAAP operating income +29% YoY
• FY26 ARR growth guide >10%
💰 Valuation at price:
• Price: $303 (14 Jan 2026)
• ~17x FY26 GAAP EPS vs >30x historical
• Heavy buybacks confirm internal conviction
• RPO $22.5B supports cash-flow visibility
⚠️ Bottlenecks:
• FTC litigation overhang
• Persistent fear of AI-driven seat deflation
🧠 Verdict: Buy. The market is discounting terminal decline, but Adobe is delivering durable growth.
🤖 AI-assisted analysis
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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