Bessemer's Byron Deeter gives his read on Adobe ahead of earnings

Core Insights - Adobe is facing significant challenges from competitors like Canva and Figma, as well as the transformative impact of AI on its product offerings [2][3] - The company has successfully transitioned to the cloud but now confronts a more complex landscape with AI integration [2][3] - There is speculation that Adobe may need to pursue mergers and acquisitions (M&A) to remain competitive in the evolving market [4][5][6] Industry Dynamics - Legacy tech companies are under pressure to adapt or risk obsolescence due to the rapid advancements in AI and generative technologies [5] - The competitive landscape is shifting, with private companies like OpenAI and Anthropic gaining significant influence over public markets [7][11] - Oracle's recent partnership with OpenAI has raised questions about its position in the AI sector, suggesting that it may not be a leading player despite market perceptions [8][9][10] Market Trends - The market is witnessing volatility driven by single announcements from major tech firms, indicating a sensitive investor sentiment [2] - There is an expectation that legacy companies will engage in aggressive acquisitions to bolster their capabilities and fend off competition [5][6] - The current capital environment allows companies like Anthropic to delay going public, as they have access to ample funding [12]