In a bold move that has captured the attention of Wall Street, Michael Burry, the famed “Big Short” investor, has publicly urged Adobe Inc. (NASDAQ:ADBE) to acquire AI firm Midjourney to defend its dominance in the creative software market.
Posting on X, Burry stated that “Adobe $ADBE should buy Midjourney” and other founder-led creative firms to stabilize its position.
Leveraging his reputation for spotting market pivots, Burry argued that the software giant must act decisively to maintain its edge, telling the company: “@Adobe, you have the cash flow to protect your franchises.”
It delivered record operating cash flows of over $10 billion in the previous fiscal year on Dec. 10, 2025.
The recommendation comes as Adobe faces a “brutal 2026,” with shares down nearly 20% year-to-date. The stock has been battered, following the release of Google’s Nano Banana 2, a free model offering “Pro-grade” quality that directly threatens Adobe’s Firefly and Creative Cloud subscriptions.
A Sector Under Siege
The broader software sector is currently weathering its worst performance relative to semiconductors since the 2000 dot-com peak. BTIG technician Jonathan Krinsky noted the sector is “probably oversold enough for a bounce,” while Jim Cramer recently observed that even companies with strong earnings, like Adobe, are watching their prices “wither and get blown away.”
Despite the downward trend, Adobe’s fundamentals remain a point of contention. The company is trading at a P/E of 16.4x, with a first-quarter earnings catalyst looming on March 12.
Analysts maintain an average price target of $418, suggesting significant upside if the company can prove its resilience against free AI tools, according to Benzinga.
Protecting the Franchise
Burry’s suggestion toward an acquisition strategy highlights a growing belief that Adobe must buy its way out of the current AI arms race.
By acquiring Midjourney, Adobe would not only eliminate a primary competitor but also integrate high-end generative talent to “protect your franchises” as Burry suggested.
ADBE Slips Nearly 20% In 2026
Adobe has declined 19.27% over the last six months and 19.50% year-to-date, significantly underperforming broader indices.
The stock was 37.56% lower over the year. On Thursday, the stock closed 3.16% higher at $281.74 apiece, and it was 0.12% lower in premarket trading.
Benzinga’s Edge Stock Rankings indicate that ADBE maintains a weaker price trend over the short, medium, and long terms, with a moderate quality score.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image via Shutterstock