ADBE is a top opportunity based on risk/reward; market pessimism about AI disruption seems excessive given continued double-digit growth in revenue and free cash flow.

So, let me show you one, because I told you at the start of the video that I'd bring you to it. Guys, Adobe is a company that I've seen fall from a high of 700 down to 200. It got interesting to me under 450. I started buying some shares.

As time went on, people were saying, "You don't get it. AI is going to destroy this company." Meanwhile, Chat GPT and Claude were both partnering with Adobe to use their AI into their systems.

I also looked at the chart on the free cash flow since AI started become a big thing and I'm like, "Wait, how is their revenue and free cash flow still growing double digits every year, even though the company is dying?"

Now, obviously, the future is unknown. And we're humans and we make mistakes. But boy, I thought to myself, is this a prime example of the market missing this because they're sitting there saying, "I need to go buy the chips and not the software that's going to get eliminated by these companies."

To me, Adobe is a very good software business that does a very great task for a lot of very good professionals. And obviously, Chat GPT and Claude are very early on in their process of doing videos and pictures in their software.

Just yesterday, I was using them for some of things on on on my image side and it was very, very cumbersome. If I'd just given that to somebody who's an Adobe expert, it probably would've done a lot faster, but probably more expensive.

But I still look at this company that's selling for 10 times free cash flow. And I sit there and say, "Is the market pricing a future that, yes, may not be as good as they thought, but they're pricing it like it's way worse than it's actually going to be?" That's the question.

Now, I don't know if I'm going to be right on Adobe or not. I have no clue. But what I do know is, if I can find 30 or 40 companies that are priced like Adobe with that kind of perception, I'm probably going to do very well.

A few of them will probably get eliminated. A few of them will probably do far, far, far better than people expected, and a few of them will probably do what people expected. That's all I need.

We're not here to pick one stock and say, "This is it." We're here to look at a process and apply it to many stocks. And with Adobe, I see that working right here. I think it is one of the best opportunities in the market right now.

When I say that, I mean the risk versus the reward.