The article argues Adobe faces the risk of being replaced by AI-generated images, though the company is adding AI tools to its software. Its subscription revenue has kept growing at a slow but steady pace, with little change from the 2022 growth rate, while the stock is down about 60% from its late 2021 peak. Adobe now trades at 11 times forward earnings, a level that reflects market skepticism. The author doubts Adobe can achieve 20% to 30% growth or regain its valuation, and even a rise to 20 times forward earnings would amount to a single doubling followed by market-average growth. Although the author thinks the outlook is not as bad as the market believes, investors do not need to hold Adobe stock when many solid AI stocks are available.
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