Adobe, Paypal, and Meta are not buys and i'm tired of peoples posts about them

AI Summary

Author argues Adobe, PayPal, and Meta are not buys due to AI/subscription headwinds, competitive saturation and legacy tech, and Meta's off-balance-sheet data-center risk plus moonshot spending.

ADBE — AVOID Author argues Adobe is not a buy because AI tools let novices replicate Photoshop and reduce the need for paid seats, creating a structural subscription headwind; many potential customers dislike its business model and students have moved to freeware. Professionals will keep using Adobe Suite, but the only growth path is enterprise graphic designers already using the tools, so the market is correctly pricing a permanent growth slowdown.

If a company can do the same work with 2 designers instead of 10 because of AI, Adobe loses 8 subscription seats. That is a structural headwind.

PYPL — AVOID Author argues PayPal is a value trap because it operates in a saturated market with legacy technology, and its low P/E is meaningless as competitors take share. They cite personal experience that PayPal is inconvenient versus alternatives.

Paypal is in a saturated market of competitors and is building off legacy technology. Sure it's got a low P/E but that really doesn't mean shit when their competitors are eating their lunch.

META — AVOID Author argues Meta's low P/E is partly due to off-balance-sheet financial engineering: Meta owns only about 20% of the Hyperion data center while Blue Owl owns 80%, and Meta's lease/minimum-value commitment keeps $27B of capex off its books while leaving AI-demand risk. They also warn Meta's history of spending on moonshot projects with little ROI is likely to continue, making investors wary.

Meta owns like 20% of this Hyperion data center, and Blue Owl Capital owns 80%. Meta pays BOC based on a lease agreement, and 27 billion of Capex gets to be off their books while the risks remain (As part of the contract between BOC and Meta, if demand for AI drops for some reason, Meta promises to pay Blue Owl some kind of minimum value for that data center.)

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1. Adobe. 

Adobe is 'value priced' because the novice editor is using AI tools to do the equivalent editing photoshop would have given them (for example, Canva and Gemini) . The AI investments Adobe has made are equally shooting them in the foot. If a company can do the same work with 2 designers instead of 10 because of AI, Adobe loses 8 subscription seats. That is a structural headwind.  Many potential customers hate Adobe because of their business model, and broke students have migrated to freeware alternatives. Professionals will always use the Adobe Suite which is not going to change. But buying this stock expecting it to beat the market average is probably the wrong take. The market is pricing in a permanent growth slowdown, and I agree with the market. There are too many alternative goods, and the only growth path is in enterprise graphic designers, who are already using the tools. 

2. Paypal

Paypal is in a saturated market of competitors and is building off legacy technology. Sure it's got a low P/E but that really doesn't mean shit when their competitors are eating their lunch. As a Paypal user, it's inconvenient to use them vs basically any other alternative. That's all you need to know as to why i think this is a value trap.

3. Meta

People talk about their P/E, but nobody seems to be talking about WHY there P/E is low. 

[https://investor.atmeta.com/investor-news/press-release-details/2025/Meta-Announces-Joint-Venture-with-Funds-Managed-by-Blue-Owl-Capital-to-Develop-Hyperion-Data-Center/default.aspx](https://investor.atmeta.com/investor-news/press-release-details/2025/Meta-Announces-Joint-Venture-with-Funds-Managed-by-Blue-Owl-Capital-to-Develop-Hyperion-Data-Center/default.aspx)

Take for example, their data center expansion. Meta owns like 20% of this Hyperion data center, and Blue Owl Capital owns 80%. Meta pays BOC based on a lease agreement, and 27 billion of Capex gets to be off their books while the risks remain (As part of the contract between BOC and Meta, if demand for AI drops for some reason, Meta promises to pay Blue Owl some kind of minimum value for that data center.)   
  
TLDR; While other large tech companies directly financed their data center operations, Meta took a totally different approach that helps their books look better by avoiding debt using financial creative contracts. 

Secondly, let's be blunt, Meta has a history of dumping money into moonshot projects that have little ROI.  This is almost certain to continue and investors should be wary.

Ideas

u/PurpleFanto Reddit r/ValueInvesting

AI editing tools shrink paid Photoshop seats; Adobe faces structural growth slowdown

Author argues Adobe is not a buy because AI tools let novices replicate Photoshop and reduce the need for paid seats, creating a structural subscription headwind; many potential customers dislike its business model and students have moved to freeware. Professionals will keep using Adobe Suite, but the only growth path is enterprise graphic designers already using the tools, so the market is correctly pricing a permanent growth slowdown.

u/PurpleFanto Reddit r/ValueInvesting

PayPal is a value trap: saturated competition, legacy tech, share loss

Author argues PayPal is a value trap because it operates in a saturated market with legacy technology, and its low P/E is meaningless as competitors take share. They cite personal experience that PayPal is inconvenient versus alternatives.

u/PurpleFanto Reddit r/ValueInvesting

Meta uses off-balance-sheet data center risk; moonshot spending continues

Author argues Meta's low P/E is partly due to off-balance-sheet financial engineering: Meta owns only about 20% of the Hyperion data center while Blue Owl owns 80%, and Meta's lease/minimum-value commitment keeps $27B of capex off its books while leaving AI-demand risk. They also warn Meta's history of spending on moonshot projects with little ROI is likely to continue, making investors wary.

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Ideas

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