Indeed, Adobe has a lot at stake as we move further into the AI era, and it needs to find a way to top the numerous offerings that seem to be popping up from all directions. OpenAI’s Dall-E, Stable Diffusion, and other text-to-image AI models stand out as worthy rivals to Firefly. Nevertheless, as Adobe unlocks the power of AI, the firm could put the creative power in the hands of everyday users, including those who may never have used something like Adobe Photoshop or Illustrator.Īlthough I’m a fan of Adobe’s Firefly, the AI art generation space has become crowded lately. Adobe’s creative suite can be quite tricky for untrained users to grasp. If Adobe Gets AI Right, the Upside Could be ConsiderableĪs generative AI innovation continues to improve, the technical barriers to entry into creative fields could fall rapidly. In any case, I’m staying bullish on shares of Adobe, even as the negative momentum picks up again. However, whether Adobe’s take on AI will be impressive enough to maintain the width of its moat remains a bit of a question mark at this juncture. Thus far, Adobe’s AI products (think AI-based art generator Firefly) have been pretty impressive. Though it would certainly make things easier for the more than $160 billion software giant, deal-making may not be necessary for Adobe to overcome its recent growth woes. Personally, I believe Adobe doesn’t need to make a big splash in M&A to stay competitive with its creative suite in the AI era. Indeed, antitrust regulators have really been a thorn in the sides of big-tech companies looking to make multi-billion-dollar deals. With UK competition watchdogs keeping a close eye on Adobe’s $20 billion buyout deal for Figma, Adobe may need to prove that it can accelerate growth organically to win back the heart of investors. To do so, the company will need to really go big on AI, as so many other big-tech firms have been doing of late. However, as new AI-savvy competitors push into the AI art-generation space, Adobe must demonstrate that it has what it takes to stay ahead of the pack. Undoubtedly, generative AI may enhance the company’s slate of creativity software offerings. Shares of Adobe ( NASDAQ:ADBE) have seen selling pressure recently, with the stock now down about 9% over the past month.
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