Aristotle Atlantic’s Large Cap Growth Sold Adobe (ADBE) Due to Concerns of Increased Competition

Aristotle Atlantic Partners, LLC, an investment advisor, released its “Large Cap Growth Strategy” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the quarter, the US equity market rallied, with the S&P 500 Index reaching 8.12%. Bonds also finished higher in the period, with the Bloomberg U.S. Aggregate Bond Index increasing 2.03%. The letter discussed market review, quarterly performance, and attribution analysis. Aristotle Atlantic’s Large Cap Growth strategy returned 9.76% gross of fees (9.61% net of fees) compared to 10.51% return of the Russell 1000 Growth Index. Security selection led to the relative underperformance of the fund in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Aristotle Atlantic Large Cap Growth Strategy 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 -3.58%, and its shares lost 33.71% of their value over the last 52 weeks. On November 14, 2025, Adobe Inc. (NASDAQ:ADBE) stock closed at $331.11 per share, with a market capitalization of $139.645 billion.

Aristotle Atlantic Large Cap Growth Strategy stated the following regarding Adobe Inc. (NASDAQ:ADBE) in its third quarter 2025 investor letter:

“We sold Adobe Inc. (NASDAQ:ADBE) and believe that competition relative to the company’s creative product suite offerings from AI startups and hyperscalers continues to increase. We believe these competitive threats will continue to pressure seats and pricing initiatives and don’t believe that Adobe’s own AI product offerings will be able to increase monetization fast enough, creating a risk to the company’s Digital Media Annualized Recurring Revenue (ARR) growth rates.”

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.