Harding Loevner, an asset management company, released its “Global Equity Strategy” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. For most of the past 15 years, US equities not only outperformed but created a perception of inevitability around their outperformance. This phenomenon, termed “US exceptionalism,” highlighted exceptional earnings growth, valuations, and a concentration of returns, particularly around AI investments. With market leadership concentrated, the US index is vulnerable to limited outcomes. In contrast, the portfolio consists of a broader range of business models and growth opportunities at attractive valuations. While AI may disrupt industries, core principles of competitive advantage and long-term profitability still apply. In the fourth quarter, the Global Equity composite rose 2.0% gross of fees, underperforming the MSCI ACWI Index’s 3.4% gain. For the year, the composite advanced 13.2%, trailing the index’s 22.9% gain. In addition, please check the Strategy’s top five holdings to know its best picks in 2025.
In its fourth-quarter 2025 investor letter, Harding Loevner Global Equity Strategy highlighted Adobe Inc. (NASDAQ:ADBE). Adobe Inc. (NASDAQ:ADBE) is a multinational technology company that offers creative, digital media, and document management products. On April 7, 2026, Adobe Inc. (NASDAQ:ADBE) closed at $240.14 per share. One-month return of Adobe Inc. (NASDAQ:ADBE) was -12.26%, and its shares lost 34.14% over the past 52 weeks. Adobe Inc. (NASDAQ:ADBE) has a market capitalization of $97.89 billion.
Harding Loevner Global Equity Strategy stated the following regarding Adobe Inc. (NASDAQ:ADBE) in its Q4 2025 investor letter:
“Alphabet and Adobe Inc. (NASDAQ:ADBE) are examples of two incumbents with lucrative businesses coping with the potentially dangerous situation outlined in Christensen’s book. While markets were skeptical of their ability to ward off threats from new AI businesses, both made key progress during the year in protecting their competitive advantages.
AI poses a different threat to Adobe. People use its software to create, design, and edit visual content—tasks that AI models can theoretically do via natural-language prompts. However, Adobe’s advantage is that it offers much more than a collection of image-manipulation tools. Professionals, especially enterprise users, rely on its ecosystem to manage design-related workflows, including document collaboration as well as governance of policies pertaining to brand consistency, image rights, legal compliance, and other standards and processes unique to each organization. This is the source of its pricing power and customer retention, and as AI increases the volume of visual content being created, the need for structured workflows may actually increase…” (Click here to read the full text)
Adobe Inc. (NASDAQ:ADBE) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 91 hedge fund portfolios held Adobe Inc. (NASDAQ:ADBE) at the end of the fourth quarter, up from 88 in the previous quarter. While we acknowledge the risk and potential of Adobe Inc. (NASDAQ: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 Adobe Inc. (NASDAQ:ADBE) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Adobe Inc. (NASDAQ:ADBE) and shared the list of stocks most undervalued value stocks to buy. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
