Mar Vista U.S. Quality Strategy Sold Adobe (ADBE) as Its AI Investments’ Revenue Potential Remains Uncertain

Core Insights - The third quarter of 2025 was a strong period for US equities, driven by optimism regarding the Federal Reserve's dovish stance and a boom in artificial intelligence [1] - Mar Vista U.S. Quality Strategy reported a return of +3.29% net of fees, underperforming the Russell 1000 Index and S&P 500 Index, which returned +8.00% and +8.12% respectively [1] Company Analysis: Adobe Inc. (NASDAQ:ADBE) - Adobe Inc. operates in technology through segments like Digital Media, Digital Experience, and Publishing and Advertising [2] - The stock experienced a one-month return of -0.40% and a 52-week decline of 29.41%, closing at $348.77 with a market capitalization of $145.995 billion on October 8, 2025 [2] - Mar Vista exited its long-standing position in Adobe due to concerns that generative AI product extensions would not significantly expand its addressable market, facing increased risks from mainstream large language models [3] - Adobe's stock fell 10.45% amid doubts regarding the monetization potential of its AI product Firefly [4] - In fiscal Q3 2025, Adobe reported record revenue of $5.99 billion, reflecting a 10% year-over-year growth [4] - Despite recognizing Adobe's potential, the company believes other AI stocks present greater upside with less downside risk [4]