What Makes Adobe (ADBE) an Investment Bet?

Diamond Hill Capital, an investment management company, released its “Select Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. Markets continued their YTD rally in the third quarter, with the Russell 3000 Index surging 8%. At the same time, the portfolio underperformed the Russell 3000 Index, returning 4.98%. To get an idea of the fund’s best choices for 2025, check out its top 5 positions.

In its third-quarter 2025 investor letter, Diamond Hill Select Fund highlighted stocks such as Adobe Inc. (NASDAQ:ADBE). Adobe Inc. (NASDAQ:ADBE) is a technology company that operates through Digital Media, Digital Experience, and Publishing and Advertising. The one-month return of Adobe Inc. (NASDAQ:ADBE) was -2.56%, and its shares lost 30.02% of their value over the last 52 weeks. On October 29, 2025, Adobe Inc. (NASDAQ:ADBE) stock closed at $337.86 per share, with a market capitalization of $141.428 billion.

Diamond Hill Select Fund stated the following regarding Adobe Inc. (NASDAQ:ADBE) in its third quarter 2025 investor letter:

"Though markets have continued rising throughout the year, we have continued finding individual companies whose prices we believe are not reflective of their long-term growth outlooks. Accordingly, we initiated four new positions in Q3, including Colgate-Palmolive, Berkshire Hathaway, Zoetis and Adobe Inc. (NASDAQ:ADBE).Adobe Inc. (ADBE) Slips 10.45% Amid Doubts Over Firefly’s AI Monetization Potential

Adobe Inc. (NASDAQ:ADBE) is in the 13th position on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 104 hedge fund portfolios held Adobe Inc. (NASDAQ:ADBE) at the end of the second quarter, compared to 111 in the previous quarter.  In the fiscal third quarter of 2025, Adobe Inc. (NASDAQ:ADBE) reported record revenue of $5.99 billion, representing 10% year-over-year growth. While we acknowledge the potential of Adobe Inc. (NASDAQ:ADBE) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

Story Continues

In another article, we covered Adobe Inc. (NASDAQ:ADBE) and shared the list of best American AI stocks to buy according to analysts. Mar Vista U.S. Quality Strategy exited its position in Adobe Inc. (NASDAQ:ADBE) during Q3 2025. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

Disclosure: None. This article is originally published at Insider Monkey.

View Comments