TCW funds released its third-quarter 2025 investor letter, with the TCW Concentrated Large Cap Growth Fund returning +4.11% compared to the Russell 1000 Growth Index’s +10.51%. Adobe Inc. (NASDAQ:ADBE) was highlighted in the letter, with a one-month return of 11.17% and a market capitalization of $149.734 billion on December 24, 2025.

In the investor letter, TCW Concentrated Large Cap Growth Fund discussed its position in Adobe Inc. (NASDAQ:ADBE). The fund initially invested in Adobe due to its competitive position in creative software and attractive margin profile, but has been trimming its position as the business matures. The fund believes that the Gen AI trend poses a threat to Adobe’s growth rate, leading them to exit their remaining position.

Adobe Inc. (NASDAQ:ADBE) ranks 13th among the 30 most popular stocks with hedge funds. In the third quarter, 88 hedge fund portfolios held Adobe Inc. (NASDAQ:ADBE), down from 104 in the previous quarter. Adobe reported revenue of $23.77 billion for 2025, showing an 11% year-over-year growth. While Adobe has potential, TCW believes other AI stocks offer greater upside potential and less downside risk.

Read more at Yahoo Finance: TCW Concentrated Large Cap Growth Fund Sold Adobe Systems (ADBE) Due to Increasing Competition