Adobe(US:ADBE) Zhi Tong Cai Jing·2025-10-28 15:14Core Insights - Adobe's CEO, Shantanu Narayen, believes the company is undervalued by the market due to an overemphasis on chip and AI training infrastructure, which has led to misconceptions about the software industry and Adobe's growth potential [1][4] - The market is expected to shift its focus towards AI delivery within applications, an area where Adobe excels [1] - Adobe's stock has dropped approximately 20% this year, primarily due to investor concerns over competition from companies like Canva that leverage AI advancements more effectively [4] Company Developments - Adobe is set to demonstrate its position as a leader in creative software at its annual conference in Los Angeles, where it will showcase the updated version of its image generation model, Firefly [4] - The new Firefly model ensures safe commercial applications by avoiding intellectual property infringement and will support automatic photo editing through natural language commands [4] - Adobe plans to integrate third-party models from OpenAI, Google, and ElevenLabs into flagship applications like Photoshop, while continuing to invest in its own model development [4][7] AI Strategy - The core of Adobe's AI strategy is to deeply integrate AI into industry-standard applications, such as intelligent element replacement and expansion in Photoshop [4] - New features launched include AI-generated music and voice capabilities, with over 29 billion digital content pieces generated by its AI models as of September [4][7] - Despite Wall Street's recognition of Adobe's AI innovation, investors are more focused on commercial returns, but the company is confident that user adoption of AI features will lead to long-term benefits [7] Financial Outlook - Adobe has a stock buyback plan of nearly $9 billion, based on the belief that the company's current value is significantly undervalued [7]