Investment Research Report: Adobe

📅 Publication Date: 2/22/2026

Investing is a game of conviction, and conviction is built on clarity. My research is an attempt to distill my thoughts, challenge my assumptions, and refine my decision-making. It is not a display of expertise, but a foundation, one that will evolve over time. My goal is simple: to become a sharper, more disciplined investor. If you take away even a single insight from this, then it has served its purpose. Feedback is always welcome. After all, the best investors never stop learning.

Note: This report is for informational purposes only and does not constitute investment advice; please refer to the full disclaimer at the end.

1. Investment Thesis in One Sentence

Adobe is valued as if structural decline were inevitable, yet steady mid-single-digit growth would be sufficient to generate asymmetric upside.

2. Introduction & Brief History

Source: Adobe

Adobe was founded in 1982 by John Warnock and Charles Geschke with a simple but powerful idea: digital documents should look the same everywhere. That insight led to PostScript and later PDF, which became the global standard for digital document exchange.

Over the following decades, Adobe expanded into creative software, with products like Photoshop, Illustrator, InDesign, and Premiere becoming industry standards across design, photography, and video. By the late 2000s, Adobe had effectively won the desktop creative software market.

The next major inflection came in 2013, when Adobe fully transitioned its Creative Suite to a subscription-based model under Creative Cloud. The move was heavily criticized at the time, but it transformed Adobe from a cyclical software vendor into a recurring-revenue platform with far greater scale and predictability.

Adobe's Creative Cloud, Source: CapCut

Adobe later ventured into Digital Experience, expanding beyond creation tools into analytics, marketing automation, personalization, and customer data, and repositioning itself as a broader enterprise platform embedded across digital commerce and marketing workflows.

Entering the 2020s, Adobe was widely viewed as one of the highest-quality software businesses in the market, supported by strong margins, durable free cash flow, deep customer lock-in, and the belief that it controlled the core layers of creative and digital workflows.

For the first time, that perception is being challenged. The emergence of generative AI has altered how content is created at the entry level while raising more fundamental questions about the long-term economics of the business.

The question now is simple:

Is AI sending Adobe to its deathbed, or is the market overreacting?

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