Key insights
- This opinion piece argues that Adobe's core business is fundamentally threatened by generative AI, which is rapidly devaluing traditional design and editing work. The author posits that AI's ability to create and manipulate images/videos instantly makes time-consuming software like Photoshop and Premiere obsolete, leading to a loss of users. Despite current growth, the author believes Adobe is bleeding lower-end customers and will face accelerating decline as AI capabilities improve and become more widespread, suggesting a bearish outlook for the stock.
For those still drinking the hopium/copium on this stock, ask yourself this question, do you think people will be sitting there for hours editing images or videos several years from now?
Can you not see that *design* has been murdered by AI. It has no value anymore.
An image that is beyond anyone's imagination can be generated in an instant. You can do so much to an image with a simple prompt, why would anyone open Adobe Photoshop anymore, which takes like a minute to load, to sit there and edit for hours. Look at video and how much you can get done inside TikTok or Instagram. I don't open Adobe Premier anymore because I can do everything quicker and easier in CapCut. I'm not even talking about video generation which is getting better and better every day. This AI stuff just started and most people aren't even exposed to it yet.
Do you guys know that YouTube now auto-generates your thumbnails? Do you guys know that you can create or manipulate an image in like a thousand places now?
For those that still don't get it, TIME is what matters. TIME is the problem that is constantly being solved for. Images and video takes a lot of time to work on - it's a huge problem. Solving for time, making things quicker and easier, is the #1 innovation in any and every field.
Do you think that most people are going to choose to sit there and edit an image/video vs. getting something done basically in an instant? AI can do it better and nobody cares about design anymore. It's basically worthless. You can pump out endless content with AI and just let it loose.
Now I know the rebuttals - but Adobe is growing. Sure, it might still be growing, albeit slower, but we're looking at several years from now, not today. It probably looks like it's growing, but it's probably bleeding out low-end users faster than it's adding high-end users, and that will accelerate. It takes people a while to finally cancel that subscription even though they're not using the product anymore.
Adobe will be used by companies. Sure, I don't doubt it. Maybe that will be enough to keep the business going.
Well, they can just do AI too. Sure, but they are a huge company with huge costs, one of them being 30,000 employees. If they can't compete on price, why go to them? They would need to have a unique AI engine that's worth the price. What I'm saying is, if they are just another AI image/video company, their pricing power will diminish.
Listen, anything is possible, and they can still prevail. We don't know how things will play out, but you guys need to be able to see things for what they are, and make your decisions based on that. I haven't mentioned all the ways Adobe gets pressured, and I haven't mentioned all the ways Adobe can turn around - it's too much to type. Think about the 1st part of this post, and tell me how Adobe will overcome these issues.