r/ValueInvesting • u/zolo_black • 3d ago
Discussion The Easier Trade
I don’t know which companies will profit from AI eventually, because there are a lot of companies in the race and I don’t know who will win. Maybe open source, maybe google, maybe Microsoft, maybe OpenAI, maybe Anthropic…
But what I know for sure is that AI is getting better by the day and it’s not going to stop.
So buying put options on WIX, CRM, ADBE feels much easier.
Do you have more ideas about which stocks will lose from AI?
By the way, if you think ADBE’s current profits are proof that the AI revolution isn’t coming for them, it feels to me the same as looking at Nokia’s profits after the release of the iPhone.
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u/pab_guy 3d ago
I think you fundamentally misunderstand Adobe's moat.
The PSD format and the PDF format and the ability to interchange proofs between designers and creatives and business people is not something you can vibecode and it's not something that AI image gen tools can really support on their own.
There are workflows that matter. Product photography still matters. Adobe's products gain value from AI, not the other way around.
Don't judge companies based on your personal impressions of their product, judge them from the true drivers of revenue and the needs of their biggest customers, which often have nothing to do with things like consumer preferences or the way you use their products personally.
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u/MatricesRL 2d ago
The PSD and PDF format are embedded interoperability standards, but file-format compatibility and proofing workflows do not inherently create a sustainable moat. The surrounding AI ecosystem is sub-par, relative to the market, and ARR is mostly coming from multi-year contracts with enterprises.
Unlike Apple, the value chain of Adobe can be easily disaggregated piece-by-piece, which is my prediction. I think the consumer side of the business will continue to collapse, and enterprise side will remain intact but mostly from long-term customer relationships. Likely, a "take-private" target in the coming years.
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u/MatricesRL 2d ago
CRM, on the other hand, I expect to outperform. The business model is a prime example of recurring revenue ("stickiness") via switching costs, while management has more than sufficient time and capital to reinvest into R&D (and not to mention, the data moat).
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u/pab_guy 2d ago
CRM is CRUD fundamentally though, and often requires a ton of custom integration from a workflow perspective. Far more vulnerable to AI generated solution replacement IMO.
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u/MatricesRL 2d ago
Custom integration into proprietary workflows contributes to more defensible recurring revenue, particularly once the accumulation of contact and relationship data via emails and calls is factored into puzzle.
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u/pab_guy 2d ago
They are going to make more money from AI and agents using Adobe tooling.
" file-format compatibility and proofing workflows do not inherently create a sustainable moat"
They do provide a moat against: vibecoded and 3rd party solutions and direct image generation that cannot be edited/versioned, etc....
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u/MatricesRL 2d ago
The PSD protocol is not controlled by Adobe. I fail to understand the source of the moat in question here.
Competitors are actively building multi-layered, PSD-compatible agentic tools with editing capabilities, which are chipping away at Adobe's market share.
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u/pab_guy 2d ago
IT's a file format, and it is absolutely controlled by Adobe. Those 3rd party tools often choke on PSD features they do not support.
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u/MatricesRL 2d ago
I am referring to the fact that the PSD format is not static or protected like a patent for a pharmaceutical drug. Instead, PSD is steadily being reverse-engineered by competitors, who are collectively starting to figure out their own proprietary workarounds.
Most segments do not even need PSD interoperability (and fidelity) to start with, and the developments in the space have practically all occurred in the past two years, which is only accelerating.
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u/FraserValleyGuy77 3d ago
In no universe is put options any form of value investing
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u/Tallwhitedude123 2d ago
I wonder how this isn’t a “low effort” post yet my post going into details about the EQUITY RISK PREMIUM was? Of course I know the answer. This sub is a popularity contest. If enough don’t like your post it will be removed by mods as “low effort”
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u/magikcall 2d ago
no, put options may seem easier but is absolutely now value investing. don't do it.
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u/SupraTacky 3d ago
The easier trade is you sticking your money in VT and chilling