Adobe’s valuation is low despite record earnings and cash flow, with concerns about losing market share to AI tools. Investors await earnings report on Dec. 10 to see if it’s a buy. The stock is down 27% year to date, part of a struggling software sector. Adobe pioneered software as a service with its Creative Cloud suite. The market is worried about AI’s impact on Adobe, similar to past concerns with Apple and Alphabet. Adobe is trading at a discount, making it a potential deep-value stock. Investors should focus on how Adobe monetizes AI to gauge future success.

The stock has not been this cheap in over a decade, priced below S&P 500. Adobe’s strong balance sheet and buyback strategy make it an attractive investment. With Adobe’s stock price declining despite earnings growth, it’s a potential market outperformer. Stock Advisor team identifies Adobe as a compelling buy, emphasizing potential for high returns. The views expressed are the author’s and do not necessarily reflect those of Nasdaq, Inc.

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