Adobe & the Jevons Paradox: Everyone Is Wrong

=== SUMMARY === - The author argues that the prevailing market narrative—that AI tools like Midjourney and Canva will cannibalize Adobe's business—is fundamentally flawed. - Citing the "Jevons Paradox," the author believes AI will ultimately benefit Adobe's revenue and earnings power, supported by a record Q1 FY2026 earnings beat. - Quality assessment: High-conviction thesis introduction; while the excerpt is brief, it clearly outlines a contrarian fundamental stance backed by recent earnings data. === SENTIMENT === BULLISH === TRADE IDEAS === ADBE - LONG | confidence: 0.95 | sentiment: +0.80 Speaker: u/phosphate554 Thesis: 1. THE FACT: Adobe posted a record beat on every major metric in Q1 FY2026. 2. THE BRIDGE: The market is mispricing Adobe due to fears of AI cannibalization, creating an attractive risk/reward profile as AI actually drives broader demand for creative software. 3. THE VERDICT: Go long ADBE to capitalize on the market's misunderstanding of AI's impact on its earnings power. 4. RISKS: Generative AI competitors (Canva, Midjourney) actually do erode Adobe's pricing power and seat licenses over time. Timeframe: medium-term Key Points: - Market fears AI will destroy Adobe. - Author argues AI will boost Adobe's revenue. - Q1 FY2026 showed record earnings beat. - Author is actively adding to long position.