Why The Adobe Sensei-Powered Creative Cloud Is Important

Apr. 24, 2019 4:19 PM ETAdobe Inc. (ADBE)9 Comments
Motek Moyen profile picture
Motek Moyen


  • It is estimated that there are 15 million paying customers of Creative Cloud.
  • Annual revenue from Creative Cloud is still Adobe’s biggest sales generator at $5.34 billion.
  • AI-assisted or generative creativity helps designers and content creators earn more money more quickly.
  • Happy customers who make good money from using Creative Cloud software products help prop-up the high valuation ratios of ADBE.

I reiterate my January 29, 2019 buy rating for Adobe (NASDAQ:ADBE). Adobe’s current stock price of $278.29 is notably higher than ADBE’s January 29 trading price of $238.27. ADBE touts a 20.32% YTD return, but I think this highly-valued stock still has more upside potential. Going forward, the Sensei artificial intelligence (AI) platform can fortify Adobe’s pseudo-monopoly on design/content creation software.

Sensei can enhance Adobe’s $5.343 billion annual recurring revenue from Creative Cloud. A stronger Creative Cloud revenue stream can help ADBE finish 2019 with a YTD return much higher than 20.32%.

(Source: Seeking Alpha)

A persistent pseudo-monopoly on multimedia design software can support ADBE’s high valuation ratios of 49.69x TTM P/E, 13.95x P/S, and 13.47x P/B. Adobe’s stock price can shoot up if it can keep improving its $1.495 billion/quarter revenue from Creative Cloud.

(Source: Adobe)

Based on the chart above, Creative Cloud is contributing 59% of Adobe’s annual revenue. Adobe infusing artificial intelligence features in Creative Cloud software products was judicious. The time-saving features of Adobe Sensei can help increase the estimated 15 million paid subscribers of Creative Cloud.

(Source: Adobe)

Time is money in the creative industry. Adobe’s future long-term prosperity is excellent. Adobe Sensei is accelerating the workflow of content creators and designers. The faster they finish their projects, the more money for creative professionals. Content creators and designers who make good income will remain long-term paying customers of Adobe.

Retaining and growing the 15 million paying customers of Creative Cloud ensures Adobe remains the no. 3 leader in the $20 billion/quarter enterprise SaaS business.

The Economic Benefit of Sensei AI-Enhanced Creativity

Artificial intelligence or generative designing made Creative Cloud more sellable. Even non-artistic individuals will find it comfortable to use complex software programs like Photoshop, After Effects, and Illustrator.

We can guesstimate that attracting 3

This article was written by

Motek Moyen profile picture
Motek Moyen is a financial analyst, technician, and Adobe multimedia content creator. He studied Mathematics, Commercial Advertising, and Computer Science in the 1990s. He does not trade stocks.

Disclosure: I am/we are long ADBE, ADSK, MSFT, NVDA. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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