ADBE - Adobe Inc.

Adobe has a wide moat with products like Photoshop and Acrobat, its AI product Firefly is growing rapidly, and the stock is trading at 8.7x free cash flow. The host owns the stock and the analyzer indicates a 24% annual return over 10 years.

Adobe passes all filters with 89% gross margin but faces AI disruption risk, stock collapsing.

Mentioned as part of software stocks that have been 'crushed recently,' no explicit trade recommendation.

Trump's accounts bought Adobe. Beaten down cash machine with $25B buyback, Firefly ARR doubled.

Described as a 'very dangerous stock' with insiders not buying and CEO stepping down. Bearish on future earnings.

Fundamentals okay but narrative deteriorating. CEO and CFO left. No longer buying, waiting to see if situation improves. Might sell if continues to deteriorate.

Record revenue, insider buying, Michael Burry holds. 8x FCF, high margins. Conservative assumptions yield ~25% return. AI fears overblown.

Adobe is given as an example of a strong, cash-generating company that is currently out of favor. The host suggests that if it continues growing cash and revenue, the momentum will eventually shift in its favor. He uses it to illustrate the value investing approach of buying hated but fundamentally strong companies.

Creator is still a 5% portfolio shareholder and says Adobe is cheap, but expresses concern about the defensive management tone, CEO/CFO departures, and deferred monetization. He is not adding and may change his position in the future.

Host's highest-conviction pick alongside Burry. Down 42%, 7.5x free cash flow, 89.4% gross margins near all-time highs, minimal acquisitions, strong revenue growth. AI revenue tripled last quarter. Firefly AI product provides real AI exposure at a fraction of AI stock valuations. DCF middle target $600 vs $196 current. Host personally owns shares.