Adobe Inc. (ADBE): A Bull Case Theory

We came across a bullish thesis on Adobe Inc. on Summit Stocks’s Substack by Lucas | Summit Stocks. In this article, we will summarize the bulls’ thesis on ADBE. Adobe Inc.'s share was trading at $299.58 as of January 28th. ADBE’s trailing and forward P/E were 17.94 and 12.72 respectively according to Yahoo Finance.

Adobe Inc. operates as a technology company worldwide. ADBE is often portrayed as vulnerable to AI disruption in creative software, but the reality is the opposite. Rather than being threatened, Adobe is actively leveraging AI to strengthen its ecosystem, expand its addressable market, and deepen its competitive moat. Its recent Adobe MAX conference highlighted three key areas that underscore this thesis. First, Firefly Foundry enables enterprises to build custom generative AI models trained on their own assets, solving the critical issue of commercial safety and intellectual property provenance.

This allows major partners like Disney to generate new content securely within their IP universe, further entrenching Adobe in mission-critical workflows and raising switching costs. Second, AI Assistants embedded across Creative Cloud, Firefly, and Adobe Express lower barriers to entry by allowing users to create complex work conversationally. This not only speeds up professional workflows but democratizes creativity, enabling anyone—regardless of skill level—to produce high-quality content.

Third, Adobe’s strategic AI partnerships, including ElevenLabz, Topaz Labs, Google, Runway, and OpenAI, turn potential competitors into assets, ensuring users remain within Adobe’s platform while benefiting from the best-in-class models for specific creative tasks. Additional collaborations, such as integrating Adobe Premiere into YouTube Shorts, further solidify its centrality in content creation and distribution.

Overall, Adobe MAX 2025 demonstrates that AI is not a threat but a catalyst, enhancing Adobe’s dominance, reinforcing its professional and mass-market presence, and expanding its ecosystem in ways that competitors cannot easily replicate. With these innovations, Adobe is poised to grow both revenue and market share, making the current disruption narrative misleading and presenting a compelling long-term investment case.

Previously, we covered a bullish thesis on Adobe Inc. (ADBE) by jackandjillonthehill in May 2025, highlighting its high-margin, cash-generative business, strong balance sheet, and resilient Digital Media and Digital Experience segments. ADBE’s stock price has depreciated by approximately 20.10% since our coverage due to AI disruption concerns. Lucas | Summit Stocks shares a similar thesis but emphasizes Adobe’s proactive AI strategy, including Firefly Foundry and AI Assistants, which strengthen its ecosystem and market position.

Adobe Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 88 hedge fund portfolios held ADBE at the end of the third quarter which was 104 in the previous quarter. While we acknowledge the risk and potential of ADBE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ADBE and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.