Hi YXI friends,

A fun fact: Adobe is the second largest company (by market capitalisation) to be stuck 20% or more from its 52 week high. AMD is the largest, in case you were wondering, and TSLA hovers just 19% below its 52w high after the Robotaxi event.

Given the stock market is at its all time high and 70% of the S&P500 companies are within 10% of their 52w highs, is there a catch-up opportunity here for ADBE?

Let’s find out!

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1. Adobe is an umbrella of many apps

Adobe’s business is split into two main business segments: Digital Media and Digital Cloud. Digital Media generates three quarters of the revenue.

Digital Media is further divided between “Creative Cloud” and “Document Cloud”.

Creative Cloud contains many flagship software that you may have heard of, including Photoshop (photo editing), Illustrator (vector graphics), Premiere Pro (video editing), After Effects (motion graphics), InDesign (page design), Lightroom (photo organisation), Adobe XD (UIUX), and Firefly (gen AI).

Document Cloud centres around Adobe Acrobat, which creates and manages PDF documents. It includes Adobe Sign, Adobe Scan, and Document-to-PDF conversions.

Finally, Experience Cloud, which belongs to Digital Experience, enterprise solution for managing customer experiences. This includes Adobe Experience Manager, Adobe Analytics, Adobe Target, Marketo Engage, and Adobe Workfront.

Adobe makes most of its revenue from Americas, although EMEA and Asia together share as much as 40%.

How about AI?

Adobe has embedded generative AI across its suite of tools through Adobe Firefly. Firefly helps users quickly enhance their creatives in Photoshop, Illustrator, or Premiere Pro. For PDFs, Adobe offers the Acrobat AI Assistant, which helps users extract information quickly and interact with the document conversationally. For Experience Cloud, businesses can use AI to automate customer journeys and marketing.

Adobe’s AI offering emphasises commercial safety of the generated content, which is paramount for its business customers.

2. Unexciting But Consistent Growth

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