10 Best Advertising Stocks to Buy According to Short Sellers

5. Adobe Inc. (NASDAQ:ADBE)

Short Interest as % of  Shares Outstanding: 1.14%

Number of Hedge Fund Investors In Q2 2024: 107

Adobe Inc. (NASDAQ:ADBE) is one of the biggest enterprise software companies in the world. It offers advertising services through its Advertising and Publishing business. It enables businesses to manage their marketing campaigns across different platforms such as search and social, conduct real time bidding, optimize metrics, run campaigns, and run programmatic advertising for up and coming mediums such as connected televisions. Adobe Inc. (NASDAQ:ADBE)’s key business strength lies in its ability to generate subscriptions, which allows it to earn stable annual recurring revenue. ARR is a key valuation metric for SaaS firms, and for Adobe Inc. (NASDAQ:ADBE), its scale makes it quite important for it to show investors results from artificial intelligence features. This is because any weakness on this front can create a perception among investors that the firm has lost its technological edge and is vulnerable to losing market share to competitors and upstarts. Fortunately for Adobe Inc. (NASDAQ:ADBE), instead of launching new AI products, it has to only promote AI features to its users to create demand.

Polen Capital mentioned Adobe Inc. (NASDAQ:ADBE) in its Q2 2024 investor letter. Here is what the firm said:

“With Adobe, in some ways, we see it as a microcosm of the market’s “shoot first, ask questions later” approach to categorizing AI winners and losers. In the early part of last year, Adobe came under pressure with a perception that generative AI (GenAI) would represent a material headwind to their suite of creative offerings. In short order, the company introduced its GenAI offering, Firefly, which shifted the narrative to Adobe as a beneficiary with a real opportunity to monetize GenAI in the near term. Earlier this year, that narrative was again challenged as the company reported a slight slowdown in revenue growth. Results in the most recent quarter were robust as the company raised its full-year forecast across a number of key metrics and showcased better-than-expected results.”