ADBE: The SaaSpocalypse Panic Has Gone Too Far
Adobe sits at $247.60, down 41% from its 52-week high of $422.95, trading at 14.4x trailing earnings. Read that again: Adobe — the company with 89% gross margins, $7.1 billion in annual free cash flow, and a monopoly grip on the creative professional workflow — previously flagged as a gift at 15x PE — now trades cheaper than the S&P 500. The "SaaSpocalypse" narrative, coined by Benzinga this week, claims AI will destroy the SaaS business model the way streaming destroyed cable. It's a compelling story. It's also wrong about Adobe specifically. Canva and Midjourney haven't dented Adobe's revenue, which grew to $6.4 billion in fiscal Q1 2026 — up 3.3% sequentially and 9% year-over-year. The market is pricing in a disruption that hasn't shown up in any financial metric. At 14.4x earnings, the stock prices in zero growth forever. Adobe's actual growth rate is 9%. Something has to give.