Joel Mogy Investment Counsel (JMIC) significantly reduced its position in Adobe (ADBE) during Q3 2025, divesting 20,929 shares valued at approximately $7.51 million. This sale decreased Adobe's allocation to 0.98% of JMIC's reported U.S. equity AUM, moving it out of the fund's top five holdings. The move follows a 34.9% decline in Adobe's stock over the past year and suggests JMIC's caution regarding the company's long-term outlook amidst concerns about AI-driven disruption, despite Adobe's own generative AI offerings and continued sales growth.
Joel Mogy Investment Counsel (JMIC) significantly reduced its position in Adobe (ADBE) during Q3 2025, divesting 20,929 shares valued at approximately $7.51 million. This strategic move decreased Adobe's allocation within JMIC's U.S. equity AUM from 1.60% to 0.98%, consequently removing it from the fund's top five holdings. The divestment marks a notable shift, as JMIC had previously held a 2.5% portfolio allocation in Adobe just two years prior, indicating a change in conviction. The sale coincides with Adobe's stock experiencing a 34.9% decline over the past year, underperforming the S&P 500 by 49 percentage points, and trading 52% below its all-time high. This underperformance, coupled with JMIC's recent selling in the last two quarters, suggests heightened concerns regarding Adobe's long-term outlook, particularly amidst the perceived threat of AI-driven disruption from competitors like OpenAI's Sora 2 model. Despite these concerns, Adobe reported 11% sales growth over the last year and possesses its own generative AI offering, Firefly, indicating active participation in the AI landscape. The company's valuation at 15 times free cash flow could suggest a potential value investment, yet JMIC's actions imply a cautious stance on whether potential disruption risks outweigh the current valuation appeal.
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