What Makes Adobe (ADBE) an Attractive Opportunity?

Bristlemoon Capital, a global equities firm, released its “Bristlemoon Global Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund returned -6.2% in the December quarter and a 0.3% return in December. Since its inception, the fund has produced a cumulative return of 11.9%, net of fees.  In 2025, market trends intensified, with perceived AI winners rallying, while stocks considered “cheap” dropped even further if labeled as AI losers. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its fourth-quarter 2025 investor letter, Bristlemoon Global Fund highlighted stocks such as Adobe Inc. (NASDAQ:ADBE). Adobe Inc. (NASDAQ:ADBE) is a technology company that operates through Digital Media, Digital Experience, and Publishing and Advertising. The one-month return of Adobe Inc. (NASDAQ:ADBE) was -4.90%, and its shares lost 18.25% of their value over the last 52 weeks. On January 9, 2026, Adobe Inc. (NASDAQ:ADBE) stock closed at $333.95 per share, with a market capitalization of $1141.92 billion.

Bristlemoon Global Fund stated the following regarding Adobe Inc. (NASDAQ:ADBE) in its fourth quarter 2025 investor letter:

We utilised the recent market pessimism around AI losers to initiate a position in Adobe Inc. (NASDAQ:ADBE) at 15x earnings, a valuation low that hasn’t been reached in over 13 years. While the bearish consensus view is that generative AI is an existential threat that will lead to reduced usage of Adobe’s creative suite, the business continues to print very healthy financial results, growing revenue at double digit rates and earnings at a mid-teens percentage rate. We see a world where Adobe is a beneficiary of the Jevons paradox: as AI collapses the cost of generating raw content, the demand for digital content will explode, exponentially increasing the demand for the tools required to edit, assemble, and manage that output.

Adobe Inc. (NASDAQ:ADBE) is in the 13th position on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 88 hedge fund portfolios held Adobe Inc. (NASDAQ:ADBE) at the end of the third quarter, compared to 104 in the previous quarter.  For the financial year 2025, Adobe Inc. (NASDAQ:ADBE) reported revenue of $23.77 billion, representing a 11% year-over-year growth. While we acknowledge the potential of Adobe Inc. (NASDAQ:ADBE) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.