Now, one observes a certain amount of wobble in the stock market, a bit of a kerfuffle, if you will. Most shares are doing rather splendidly, naturally, but a few have taken a bit of a tumble. And whilst one wouldn’t dream of scooping up everything that’s gone a bit off-colour, there’s one in particular that has caught the discerning eye – namely, Adobe (ADBE +0.47%). A dashedly interesting proposition, wouldn’t you agree?
The Adobe share price, it seems, has been feeling a bit under the weather, what with all this talk of artificial intelligence. One gathers the thought is, why bother with fancy photo-editing when a machine can do the trick? A perfectly reasonable question, one supposes, for the less-informed investor. However, Adobe’s results tell a rather different tale. Not only are they weathering the AI storm with aplomb, but they’re positively thriving, thanks to a bit of cleverness of their own. And with the stock down 14% to start the year, it strikes one as a particularly opportune moment to get involved.
The Industry Standard, You See
Adobe’s Creative Cloud, you understand, is the very bedrock upon which the empires of designers, photographers, and the like are built. It remains the gold standard, despite the best efforts of various contenders over the years. And this new AI business isn’t likely to change that, not a bit. If a professional wishes to present a client with something truly polished, they’ll expect it in Adobe’s format, naturally. Furthermore, these chaps have spent years mastering the tools, and the thought of learning a new system is simply too ghastly to contemplate. The switching costs, as they say in the city, are rather substantial.
There is, of course, a murmur that these AI services might deter the amateurs, the novices who might otherwise have dipped a toe into the Adobe waters. To counteract this, the company has launched Adobe Express, a rather clever little service that’s free to use. And they’ve even incorporated their own AI wizardry, Firefly, into the mix, giving it a bit of extra oomph. A spot of innovation, wouldn’t you say?
Firefly, it appears, is doing wonders for Adobe’s average revenue per user. Annual recurring revenue climbed a respectable 11.5% in 2025, reaching a rather handsome $25.2 billion. The management informs us that AI-influenced revenue now accounts for over a third of the business. A strong driver of growth, indeed, and a testament to their forward-thinking approach.
Remaining performance obligations are also on the upswing, growing 13% from the end of 2024 to reach $22.5 billion. This bodes well for the future, and the management confidently expects another year of double-digit growth in 2026. A most encouraging sign, wouldn’t you agree?
The impact of these competing AI tools is simply not showing up in Adobe’s results. And one suspects it won’t, considering the formidable moat they’ve carved out in the creative software landscape. It’s indispensable to any professional, and they’re actually benefiting from this artificial intelligence by integrating these features into their leading software. With the stock trading at a mere 13 times forward earnings, it strikes one as a particularly opportune moment to acquire a few shares. A rather splendid bargain, wouldn’t you say?
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2026-01-26 13:42