Guinness Global Innovators exits Adobe as AI competition intensifies
The fund sold its position in the software giant during the second quarter, citing a disconnect between management commentary and growth despite strong adoption of its Firefly tool.
Guinness Global Innovators Fund has exited its position in Adobe Inc. during the second quarter of 2026, a move that underscores growing concerns over the sustainability of the software giant’s competitive advantage. The decision was detailed in the fund’s quarterly investor update, which reported a return of 13.8 per cent in GBP for the period. This performance outpaced the MSCI World Index, which returned 13.0 per cent, and the IA Global sector average of 13.1 per cent.
The fund attributed its relative outperformance to an overweight position in the Information Technology sector, while avoiding weaker areas such as Utilities, Materials, and Energy. Broader market conditions in the second quarter saw easing Middle East tensions, falling oil prices, and renewed enthusiasm for artificial intelligence, which drove a rotation back toward growth stocks and AI infrastructure beneficiaries.
Regarding the Adobe sale, the fund noted that it had initially acquired the shares for their high-quality fundamentals. Adobe generates over 96 per cent of its revenue from a subscription-based model, with profit margins approaching 30 per cent. The investment thesis was built on the belief that these attributes, combined with strong brand equity, would provide a durable edge and allow for expansion into non-traditional enterprise users and individual creators.
However, the fund stated that the shares have struggled recently due to a rapidly changing and increasingly competitive landscape in the creative design and data analytics markets. While Adobe’s flagship AI tool, Firefly, initially gained momentum and generated over 16 billion creative outputs, the fund identified a disconnect between upbeat management commentary and the lack of a clear growth inflection point.
As of 21 August 2026, Adobe shares closed at $275.30. Despite a one-month return of 15.79 per cent, the stock has lost 24.20 per cent over the past 52 weeks. The company currently holds a market capitalisation of $109.43 billion.
The exit by Guinness Global Innovators comes as hedge fund interest in Adobe wanes slightly. Data indicates that 86 hedge fund portfolios held Adobe shares at the end of the first quarter of 2026, down from 91 in the previous quarter. The fund’s decision reflects a broader reassessment of AI beneficiaries, with some investors now favouring stocks that offer greater upside potential with less downside risk.
