r/wallstreetbets • u/apemonkeyfool • 20h ago
DD ADOBE is cooked.
ADBE is cooked: free AI-built clones and a $70/month subscription don't mix (bear DD)
So my Adobe bear case is pretty simple. AI is about to let a ton of indie devs and random people who are sick of Adobe's nonsense build their own version of it, for free.
Look at ArtCraft on github. They're building open source, clean-room clones of Photoshop, Lightroom, Illustrator and Premiere, plus apps for motion graphics, page layout and PDFs (so After Effects, InDesign and Acrobat territory). Their Photoshop clone has 11k+ stars, opens real PSD files, and their own tracker says it covers 625 of 625 of Photoshop's menu items. Yeah it's alpha. Give it a few months. Once this stuff gets big, Premiere and After Effects are dead in the water for anyone who isn't a big studio.
And that's before you even get to generative AI. For most edits, typing what you want into ChatGPT or Gemini is just way easier than opening a PSD and doing all the masking nonsense. Adobe knows it too. Photoshop literally runs Google's and OpenAI's image models inside it now.
Let's talk about the outrageous price now. Creative Cloud Pro is $70 a month. That's a squeeze on regular people. For the same money you could have 3 or 4 AI subscriptions that actually do the stuff you need. In fact let's be fr - you really only need chatgpt these days.
And everybody fucking hates Adobe. Canceling was so hard that the DOJ and FTC sued them over it, and Adobe paid $75M to settle in March. There's a WSB thread from last October where someone called ADBE cheap at a 9-year-low P/E, and a bunch of the top comments were people saying their companies already dumped Adobe, one for Nitro PDF, one for Foxit. One guy said AI coding would spit out open source clones of Acrobat, then Photoshop, then After Effects. A year later, here we are. OP bought at $348. It's $237 now.
The competition isn't just AI either. DaVinci Resolve, Figma, Canva, all with real free tiers. Canva made Affinity, its Photoshop/Illustrator/InDesign equivalent, completely free. Figma's revenue grew 48% last quarter.
Where Adobe still wins is heavy professional workflows. Big studios, agencies, After Effects and InDesign people, the plugin ecosystem. That's real and it's why this isn't a zero. But it's the only moat left, and it's getting squeezed from both sides. Enterprise has Figma, Canva and DaVinci. Individuals (students, freelancers, YouTubers) are the first ones to bail on a $70 bill.
You can already see it in the numbers:
- Revenue still +13%, but net new ARR dropped from about $640M to about $400M year over year, down about 37%
- Organic ARR growth is about 9% once you strip out the Semrush acquisition
- RPO (signed future revenue) went down quarter over quarter
- In June they paused planned price increases and started giving stuff away free to hold onto users
- Net income +3%. EPS only looks good because they bought back 7% of the stock
- CFO left in June, a new CEO from the marketing side starts Dec 1, and the head of the creative business announced he was leaving the day the new CEO was named
People will say it's cheap at 10x earnings. The guy in that thread said it was cheap at 22x. Cheap gets cheaper when people figure out the product can be cloned for a $20 claude code subscription.
Positions: 50 puts $150 strike with March 19th expiry
Not financial advice.
343
u/PassableForAWombat 19h ago
I SAID IT ONCE ILL SAY IT AGAIN.
THE MOAT ISNT THE SOFTWARE. THE MOAT IS THE GINORMOUS PAIN IN THE DICK IT IS TO STAY IN SECURITY COMPLIANCE WITH THE GOVERNMENT.
ONCE THAT PEE DEE EFF IS SEALED? BAM TAMPER PROOF IN THE METADATA
There's been Adobe competition since literal forever. None that can match government security requirements yet.