In less than three months, Adobe has transformed itself: From "AI Big Loser" to "AI Big Winner", has the answer to "Who is the winner" in the AI era?

Original: Wall Street News

Image source: Generated by Unbounded AI‌

Three months ago, when AIGC platform Midjourney created lifelike portrait photography, the market thought it was the end of Adobe.

Faced with the challenge of AI, however, the creative software leader turned decisively and quickly. AI not only did not drag down Adobe's business, but also became a catalyst for its revenue growth, and the "AI big loser" turned into an "AI big winner".

A beautiful turnaround

In March, Adobe launched the differentiated AI creative assistant tool "Firefly". This tool focuses on assisting rather than "replacing" creators, and focuses on protecting the rights of creators. Professional creators resist.

Since its launch, Firefly has been updated many times, and it will soon be connected to Google's AI chat robot Bard. Adobe also opened the paid TOB version of Firefly in early June.

Fireflies light up Adobe’s financial report. In the second quarter of this year, Adobe’s revenue for this quarter was 4.82 billion US dollars, recording a year-on-year growth of 10%, exceeding Wall Street’s expectations. What is particularly exciting to the market is that Adobe raised its annual revenue. Revenue and profit guidance, and said that AI's boost to the business will be further reflected in the third and fourth quarter financial reports; and the management repeatedly emphasized in the conference call that Adobe's technological innovation can "lead a new era of AIGC."

As Adobe's PDF reading software Acrobat Pro took the lead in raising prices by 40%, some market analysts pointed out that with the addition of AI functions, more Adobe software will soon raise prices. **

**Wall Street analysts are eagerly awaiting a new story after Adobe monetizes AI in the third and fourth quarters. The market believes that this will be a very good story: Adobe's stock price has rebounded from the previous plunge caused by the announcement of the acquisition of Figma. It jumped 34% in the month, more than double the index's gain over the same period. **

In September last year, Adobe spent $20 billion to acquire Figma. The huge expenditure caused its stock price to plummet by a quarter within two weeks. And due to regulatory factors, the transaction has not yet been completed. The company said it is still in contact with regulatory agencies in the United States, the United Kingdom and the European Union, and strives to complete the acquisition before the end of the year.

** UBS raised Adobe's 12-month price target to $440 from $370, noting that Adobe's rebound was largely driven by its transformation from "AI loser" to winner. **

Mark Moerdler, an analyst at Bernstein, pointed out that looking forward to the performance verification brought by AI services in the future, it is not important for Adobe to successfully acquire Figma, and its growth momentum is already solid enough. **

AI may enhance rather than replace existing industry vertical applications

In early June, OpenAI CEO Sam Altman had a closed-door discussion with the CEO of AI company HumanLooop in London. According to the leaked conversation minutes compiled by Geek Park, Sam Altman talked about OpenAI’s future commercialization path:

*The future application trend is to embed the functions of the large model into more APPs instead of growing more plug-ins on ChatGPT, because in reality most plug-ins do not present PMF (Product / Market Fit, that is, product-market fit) *

ChatGPT plugins are exciting to many developers, but Altman doesn't think they'll be released anytime soon. In addition to the Brosing plugin, the use of other plugins shows that there is no PMF (Product/Market Fit). He pointed out that **a lot of people think they want their app to be inside ChatGPT, but what they really want is for ChatGPT to be inside the app. **

That is to say, the previous assumptions in the market about vertical applications being replaced by AI may not be true, and Adobe's turnaround story also confirms this.

**The combination of AI+ creativity and the powerful functions of digital experience applications presented by Firefly can help users improve the efficiency of design, break through the boundaries of creativity, and enable them to continue high-quality creative vitality in the explosive content demand, thus filling the gap between imagination and Blank space between canvases. **

This is something that a pure AIGC application cannot do, nor does the latter have its vast user base and user-friendly creative assistance capabilities.