Calls of the Day: TKO Group, Adobe

Stock Performance & Market Dynamics - TKO's stock price increased significantly after agreeing to sell its UFC rights to Paramount [1] - Cummins was upgraded to outperform at Wolf Research, reaching a record high with 19% revenue growth, benefiting from the AI data center buildout story [4] - Adobe was downgraded to sell at Melius Research due to concerns that AI is impacting software, with a target price of $310 [5] Company Strategy & Financials - One company added balance sheet improvement and revenue growth acceleration to its strategy at the end of the most recent quarter [2] - Adobe has been outperforming in terms of earnings surprises for many quarters and buying back shares at a relatively cheap price, trading at 16 times forward earnings [6] - Adobe's top-line growth rate has slowed over the last several years [9] - Adobe's stock is trading at 15-16 times forward earnings due to concerns about the impact of AI [17][18] AI Impact & Future Outlook - The market is concerned that AI is negatively impacting Adobe's business, but the company believes this is already priced into the stock [5][10] - One analyst believes AI and new AI mechanisms were going to impact the core business of Alphabet [14] - S&P software companies are experiencing strong revenue growth, highlighting idiosyncratic challenges for specific companies [12]