Is ADBE a good stock to buy? We came across a bullish thesis on Adobe Inc. on Hated Moats’s Substack by Hated Moats Investors. In this article, we will summarize the bulls’ thesis on ADBE. Adobe Inc.’s share was trading at $244.99 as of June 8th. ADBE’s trailing and forward P/E were 14.65 and 10.71 respectively according to Yahoo Finance.
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Adobe Inc. operates as a technology company worldwide. ADBE delivered a strong Q1 FY2026 performance, with underlying business momentum remaining intact even as the stock declined on concerns around leadership transition, near-term AI monetisation, and softness in parts of its legacy stock media business. Revenue came in at $6.40 billion, up 12% year on year, with GAAP EPS of $4.60 and non-GAAP EPS of $6.06, supported by record first-quarter operating cash flow of $2.96 billion and subscription revenue growth of 13%.
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Annualised recurring revenue reached $26.06 billion, while total MAUs surpassed 850 million, reflecting strong adoption across Acrobat, Creative Cloud, Express and Firefly, where AI-first ARR more than tripled year on year and Firefly ARR exceeded $250 million. Enterprise momentum remained strong, with AEP and GenStudio ARR growing over 30% year on year, Firefly enterprise customer acquisition rising 50%, and customers with ARR above $10 million increasing more than 20%, underscoring deepening penetration in large-scale workflows.
Despite these strengths, shares fell as investors reacted to CEO Shantanu Narayen’s planned succession, a sharper-than-expected decline in the traditional stock media business, and concerns that rapid AI adoption is currently outpacing monetisation, even as usage metrics accelerate. Management reaffirmed full-year guidance and Q2 outlook, signalling steady execution rather than acceleration, which disappointed a market that was expecting stronger AI-driven upside revisions and more aggressive monetisation signals.
Overall, Adobe continues to position itself as a category-defining software platform where AI-driven creation, enterprise orchestration, and creative workflows converge, supporting a long-term re-rating case as monetisation catches up with accelerating usage.
Previously, we covered a bullish thesis on Adobe Inc. (ADBE) by jackandjillonthehill in May 2025, which highlighted Adobe’s high-margin subscription model, strong free cash flow conversion, ecosystem dominance, and growing AI integration through Firefly and Sensei as key long-term drivers. ADBE’s stock price has depreciated by approximately 34.66% since our coverage. Hated Moats Investors shares a similar view but emphasizes near-term uncertainty from CEO succession, AI monetisation lag, and legacy stock business weakness.
Adobe Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 86 hedge fund portfolios held ADBE at the end of the first quarter which was 91 in the previous quarter. While we acknowledge the risk and potential of 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 ADBE and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
