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For more on Adobe's first quarter, let's get to Alex Zukin. He is Wolf Research managing director and head of software research. So Alex, uh just give us first of all, your first blush reaction to what we have heard from Adobe.

Yeah, look, I mean, I think that the numbers are, uh, the numbers are fine, right? I think that they exceeded, you know, their target on a core metric called net new Digital Media ARR, and, and it looks like they reaffirmed for the year. Uh, so I think the first blush is, yeah, they're doing what they need to do. They'll talk a lot, presumably, on the earnings call about some of the newer initiatives that they're going to be focused on, like Gen Studio, how AI could be a boost for, uh, the company over the course of the year. Uh, I assume that they'll comment on the demand environment, the competitive environment. But I would say, you know, people, folks should remember Adobe has a pension for being conservative on their guidance. Um, and I, I don't think that that's any different. Uh, and, look, the macro is changing, at least the headlines would suggest so, in, in real time. So it's going to be really interesting to see how they, um, how they address that.

I'm, I'm curious to get your take on what you think sort of distinguishes Adobe and its tools in the AI market. What makes them different, Alex? What's their competitive advantage here?

Yeah, I think it's two things. I think number one, they're the only company that's going to really indemnify you, uh, as a large enterprise when you're using their AI tools. And that is really important for large global institutions that are, you know, kind of dipping their toes into generative AI for content creation. Uh, and the second thing is, they're one of the only companies that has both the content creation side of the business with Creative Cloud, and the content distribution side of the business from a marketing cloud perspective, with their digital experience product. And this notion that they're going to, I think, increasingly talk about this year, of one Adobe, not two different pieces of the puzzle, but really one cohesive, uh, unit that can benefit and have a virtuous cycle for customers that are adapting and adopting both, uh, technologies, that's just very different and differentiated. I think it's still a work in progress getting all those pieces to fit together, but I think generative AI is going to help them there.

So it's interesting, Alex, because it sounds like you clearly think they have a moat, and they have this value proposition. The market, however, is obviously not convinced. We've not seen the stock perform. What do you think that, that Adobe needs to communicate out there, or what numbers do you think that people need to see to sort of change minds here?

I think it's pretty clear that Adobe needs to communicate a message of how AI is helping drive growth. And what's the metric that they can point to where they're seeing that growth come through, without necessarily seeing a headwind to earnings or, uh, the investments that they're making to drive that. I, I really think that this is now year, I think almost two or three where we're trying to figure out, uh, where is the evidence, uh, and what does a Adobe plus AI functionality, both in the core creative side of the house, but also on the marketing side of the house, what does that look like? I think to the extent that they can do that with metrics around adoption, metrics around monetization, metrics around usage, metrics around upsell, cross-sell, TAM expansion, that's going to help investors get confidence that Adobe is an AI winner.