ADOBE STOCK ANALYSIS - Undervalued Now? Time to Buy the Dip?

In this in-depth Adobe (ADBE) stock analysis video, I will talk about why I believe Adobe stock is likely undervalued now and why it will eventually recover. You will learn about Adobe's software-as-a-service SaaS business model, Adobe's biggest risks, Adobe's long-term growth prospects in generative AI applications, and how to value Adobe stock to find its intrinsic value.
0:00 Intro
2:27 Growth Stock Portfolio Update (Meta, AMD, Nvidia, Tesla)
6:02 Adobe's Financials and Biggest Risks/Headwinds
10:40 Adobe's Long-term Growth Prospects (Generative AI applications)
18:35 Adobe Stock Valuation (How to Calculate Adobe's Intrinsic Value)
21:05 Will I Buy Adobe Stock?
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Disclaimer: All content on this channel is for informational and entertainment purposes only. They should not be construed as professional financial advice. If you need such advice, please consult a licensed financial or tax advisor. You will also need to do your research. No guarantee is given regarding the accuracy of the information on this channel.

[@TheIntelligentInvestor]

👏👏👏👏👏If you like my channel and want to support it, here is how you can help: www.patreon.com/IntelligentInvestorChannel

[@shithilnafij3256]

This guy works hard!

[@alexwong8851]

Adobe shares just jumped today. I'm guessing your thesis was right! I'm glad I picked up a couple of shares when it was down lower

[@chetanghasava2446]

Absolutely loved the in-depth analysis. Thank you!

[@SH-np8hz]

Appreciate your hard work.

[@TheTipsyTurtle]

Appreciate you dude

[@KafkaTamura1]

appreciate for your analysis

[@lassmirandadennsiewillja7537]

Watched this on the train some days ago. Adobe is a buy at these prices. Will be a good entry point in hindsight.

[@sethaaron95]

Very good video Sir, I hope to see more updates on Salesforce and Starbucks !

[@TheIntelligentInvestor]

I’ll probably make an updated Video about Salesforce. It’s a great SaaS business. I think it’s undervalued now.

[@Allen-L-Canada]

@@TheIntelligentInvestor look forward to

[@ovidiufrasie4265]

Good video, as always, Victor. Maybe you can have a look over cybersecurity sector. Could be interesting over long term and companies line Fortinet, Palo Alto or Zscaler are trading at interesting prices. Thanks.

[@Dizzydizzydizzy7]

Could you do another video on starbucks? Appreciate your videos either way!

[@ddc93760]

✅✅✅✅✅ appreciate this video!

[@eddiel.mckenzieiii7995]

Thanks. I did not factor in the $1 billion termination fee. Great analysis as always.

[@TheIntelligentInvestor]

Yeah, it’s a one-time fee. Thanks for supporting.

[@michaelfriend3990]

Victor only pitches to-quality companies! And these are facts! Great work! Victor, curious what you think about FICO?! It's priced at a premium but it has a huge moat.

[@TheIntelligentInvestor]

Yeah I have been waiting for FICO to dip for a while. It’s hugely overvalued. But it has a huge moat. I’ll make a video about FICO when it becomes undervalued.

[@michaelfriend3990]

@@TheIntelligentInvestor Thanks Victor!

[@richread9559]

Great video Victor. I think you would like Service Now as an investment if you haven’t checked the company out yet.

[@jk35260]

With AI accelerating the process content generation, it is potentially self disruptive. If content creator are made significantly more productive, it potentially has the effect of reducing the number jobs. In short, Firefly is potentially self disruptive but this is far better than being disrupted by competitors.

[@AJ-ww1ef]

wow this aged well. Your intrinsic values - how long are they valid for?

[@TheIntelligentInvestor]

Thanks I always update my IV for each company I follow once every quarter after they release their earnings. I post my most updated intrinsic values in my Patreon blog.

[@giriiyengar8464]

Lots of hard work and very good analysis. I am however surprised that you are expecting a re-rating or for some reason still holding on to Tesla. When you realized you made a mistake with the investment, it is best to just get out even at a loss.

[@TheIntelligentInvestor]

Thanks for the suggestion. I’m essentially betting that Tesla will eventually recover after several years when rates will be much lower and when it achieves level 4/5 full autonomy. Most cars will need to be self-driving cars (China is pushing EV makers to achieve this now). I have been using Tesla’s FSD for over a month, and I can see it’s very close to level 3 autonomy. I think Tesla will be the first to achieve full autonomy and be able to scale it much faster (by just updating the inferencing software) than other companies.

[@Hongs.average]

Adobe dropped further down again, it drops so much in a short time!!..... But I'm with you. I think Adobe is still at its lead position and continues to grow and invest in marketing and technologies. I don't think it is easy for other competitive platforms to steal big industrial clients from Adobe. Like you said, most creators use Adobe system and are less likely to switch. Other companies target on gaining regular people's interests but Adobe seemly puts a lot of money to advertise on youtubes targeting regular people too. Adobe eco system is just in a different scale than others.

[@TheIntelligentInvestor]

Yeah, I use Adobe’s creative cloud a lot, and a lot of creative professionals use Adobe’s apps. It’s very hard to switch to other platforms once you’re used to Adobe’s apps. Right now, almost all the SaaS businesses (Salesforce Intuit Inc, Adobe, Service Now, etc) are oversold because of expected slower growth going forward and CIOs are shifting their IT spending from enterprise software spending to more AI spending. It’ll take time for these SaaS businesses to recover.

[@PainandSorrow]

If you were a competent trader, would it be more profitable to swing trade a long-term multi-bagger repeatedly or just open a position, hold long, and acquire more shares as time goes on?

[@TheIntelligentInvestor]

Good question, swing trade is not my style. swing trade may work for you if you’re good at timing stocks. But I’m more of a buy and hold investor. So I like to open a position, hold long term and keep acquiring more shares over time whenever it becomes undervalued. I think the key is to find really great businesses that have large moats.

[@alexwong8851]

Thanks for all of your great work! I really appreciate it. I can see Adobe potentially falling further. BTW, what are your thoughts on AAPL latest earning report? Deciding whether to hold it or invest in something else with more upside like Meta.

[@TheIntelligentInvestor]

I think wait for Apple's WWDC event and see what they're announcing. Their recent earnings report was better than expected. Apple's iPhone sales will recover once rates are lower, the Chinese economy gets better, and once Apple releases the new iPhones with LLMs running locally. Apple is going to talk about AI at the next month's WWDC event. But if you can find other great companies that have higher growth, I think it makes sense to invest in them if they're undervalued. I have been adding more Meta recently after the large dip (not advice).

[@alexwong8851]

​@@TheIntelligentInvestorthank for the feedback!

[@saedal-tamimi6053]

I will skip this quarter..I will buy in June

[@jianli4787]

Do you know that Adobe’s language AI is a wrapper of GPT for today? (Perhaps a wrapper of WatsonX for the future.) Overly pessimistic, lol.

[@TheIntelligentInvestor]

Thx, that’s good to know.

[@tofukid204]

I’d short it here sorry 😅

[@TheIntelligentInvestor]

You short, I long:)

[@tofukid204]

@@TheIntelligentInvestor sounds good 👍 todays price is $486.18 place our chips 😁

[@tofukid204]

Down she goes

[@TheIntelligentInvestor]

I still long and bought back more shares today:) Bulls win in most cases vs shorts.

[@Cleisthenes607]

You always go for large cap tech, why not mid caps and small caps. There's a great company that has 5x net income in 5 years called atkore, they provide electrical conduits and other related materials. Think all the electrical wiring that needs to go into a data center, that's them, and they're going to benefit greatly from the inflation reduction act and bead act. It's a potential ten bagger and something that I think is in your wheelhouse since you understand semiconductors which is just one of their customer industries.

[@TheIntelligentInvestor]

Thanks for the suggestions. I mainly look at large caps because their risks are much lower than most small and mid caps. Also, I always look for the best businesses that are the most profitable & most competitive in their industries, and most of them happen to be the largest companies in the world. I only focus on the businesses I understand the most (stay within my circle of competence) and stay away from businesses I don't understand. In case, I'm not familiar with atkore. But recently, I have been looking at smaller companies (e.g. Synopsys, Cadence Design) that will also benefit from AI and the large demand for semiconductor chips.

[@Cleisthenes607]

@@TheIntelligentInvestor I disagree that large caps are necessarily lower risk than mid caps at least. After a period of over performance it wouldn't be surprising to see underperformance especially in a hype market which a lot of the stuff around AI is at the moment. A bit of a history lesson but the Nifty Fifty were an informal designation for a group of roughly fifty large-cap stocks on the New York Stock Exchange in the 1960s and 1970s that were widely regarded as solid buy and hold growth stocks, or "Blue-chip" stocks. These fifty stocks are credited by historians with propelling the bull market of the early 1970s, while their subsequent crash and underperformance through the early 1980s serves a warning to simply go with popular sentiment. But I respect your decision, I would be interested to hear your take on Qualcomm which is large cap tech, I'm somewhat bullish on their entry into the automotive industry and reserving judgement on the snapdraon x elite arm chip for windows, much depends on how it performs and much more on support from microsoft and the big software tools. Hopefully what apple did with the m series of chips has lit a fire under MSOFT's ass to take windows on arm seriously this time.

[@TheIntelligentInvestor]

Yeah, Qualcomm is on my watch list. They want to replicate the same success as Apple’s ARM-based M chips. I think there will be more ARM-based AI PCs going forward which should take away some shares from the X86 market (Intel and AMD), but Intel is quite far behind AMD in both consumer and data center CPUs. AMD is taking a lot of market shares from Intel. I think the biggest beneficiary is ARM holdings because Qualcomm is making more ARM-based chips, Microsoft is supporting more ARM-based PCs, there will be more data center ARM-based chips, Apple will continue selling more iPhones, Macs and iPads (their chips are based on ARM), more smart vehicles should use ARM chips going forward because they’re more efficient. But ARM Holdings is very overpriced.

[@boratsmagadijev940]

Very expensive business with a lot of future uncertainty. Competition will get stronger in the future IMHO, I can see big tech going for video, picture editing market or a lot of small players offering cheaper services... Thank you for video Victor.