ChatGPT and Copilot already run on Adobe endpoints. Gemini and Claude are next. Stock sits at 7.64× EV/EBITDA.
u/TabMan69 ·
Reddit — r/ValueInvesting
· April 24, 2026 at 07:25
· ⬆ 28 pts
· 💬 36 comments
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Summary
The post argues Adobe (ADBE) is deeply undervalued at 7.64× EV/EBITDA (vs. 10-year avg. 29×) and is becoming a key AI infrastructure provider via its MCP endpoints integrated into ChatGPT and Copilot, with Gemini and Claude next.
The author presents three catalysts not priced in: live AI endpoint integrations, a $25B buyback (26% of market cap), and Firefly’s rapid growth ($250M ARR, +75% QoQ).
Quality assessment: This is well-researched DD with direct management verbatims, quantitative data, and a clear thesis; not noise or speculation.
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Every time you ask an AI chatbot to edit an image, resize a video, or translate a PDF, it calls an Adobe endpoint. Adobe runs the operation. Adobe charges per token. The chatbots are distribution, not competition.
Adobe's President of Creativity and Productivity confirmed this verbatim at the analyst session on April 21. Same day: CFO called consumption pricing "an accelerant" to margin structure. CEO said the model is "an and" — subscription holds, consumption layers on top. $25B share repurchase authorized through April 2030, \~26% of market cap at current price.
Stock closed $238.98 on April 23, down 6.63%. NTM EV/EBITDA at 7.64×. 10-year average is 29×.
Three things from April 21 that aren't priced in:
1. Adobe MCP endpoints are live inside ChatGPT and Copilot today. Gemini and Claude confirmed as next integrations per Wadhwani verbatim, April 21.
2. $25B buyback through April 2030. Share count already down almost 10% over three years per CFO verbatim.
3. Firefly ARR >$250M at 75% QoQ growth. Generative credit consumption +45% QoQ. RPO $22.22B, +12.8% YoY.
Next gate: Q2 earnings June 11. Full write-up with all four management verbatims: [https://open.substack.com/pub/darrenleung1/p/adbe-what-the-cfo-said-on-april-21?r=7xvov3&utm\_campaign=post&utm\_medium=web&showWelcomeOnShare=true](https://open.substack.com/pub/darrenleung1/p/adbe-what-the-cfo-said-on-april-21?r=7xvov3&utm_campaign=post&utm_medium=web&showWelcomeOnShare=true)
Pushback welcome — specifically on whether the endpoint model is actually monetisable at scale or marketing framing.
ADBE trades at 7.64× NTM EV/EBITDA, a 74% discount to its 10-year average of 29×, while AI endpoint integrations with major chatbots are already live. The market has not priced in the consumption‑based revenue layer from AI endpoints, the massive $25B buyback (through 2030), and accelerating Firefly adoption – creating a re‑rating opportunity as Q2 earnings (June 11) could confirm accelerating consumption. Value play with a strong growth catalyst: near‑term multiple compression is unjustified given secular AI tailwinds and aggressive capital return; re‑rating to even 15× would imply ~100% upside. AI endpoint monetisation may prove slower or lower‑margin than assumed; macro downturn could delay consumption growth; competition from Canva or open‑source tools; guidance miss on June 11.