Adobe: Compelling Valuation Even Amid Intensifying Competition

Adobe remains a Strong Buy as its valuation is deeply discounted despite robust growth and strategic AI-driven expansion. ADBE's freemium funnel surged to 90MM MAU, with AI-native ARR tripling year-over-year and Firefly ARR nearing $300MM, reflecting rapid adoption. Valuation is compelling: P/E Non-GAAP at 9.84, EV/EBITDA at 9.32, and FCF yield above 11%, with a $25B buyback underway. Risks include CEO/CFO departures and intensifying competition, but deliberate ARR deferrals and aggressive AI integration support long-term upside.

Adobe ( ADBE ) has gained over 10% since my last Strong Buy rating on the firm, as I argued that the stock was incredibly cheap following a strong double beat and a raised