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Adobe’s $25B Bet to Survive AI & Blackberry’s Shares Rise with Strategic Pivot
00:22:06
Adobe's stock buyback and Blackberry's stock is up
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- [00:00]
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Ann Barry
games like brick Breaker and Snake may be of a bygone era, but their makeup thriving in cars and medical devices. We check out blackberries pivot spirit might be getting a lifeline from Washington, D.C. while fuel prices keep United stock grounded. We survey what's going on in the airline world and Adobe striving to make a comeback. But can it win back investors with a $25 billion move even as AI pressure looms large? For Wednesday, April 22, it's blue markets Daily and I'm Ann Bar. More market details to come. But first, is Adobe staging a comeback? Well, to put this in context, I have to admit I've been a frustrated Adobe shareholder in the past, and that was even before the software sell off this year. Frankly, I got so fed up with the decline and with no clear path to a turnaround.
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John Curto
But I could get excited about at
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Ann Barry
least that I just flushed the stock in a tax loss harvesting move at the end of last year because Rather like with PayPal, I I've been puzzled by how such a massive first mover in payments in that case or in document management in Adobe's could not have taken its massive store of long standing proprietary data and just sprinted ahead in the AI arms race. Data of course being one of the key pieces of ammunition needed. So I watched in Display as Adobe stock, that's ticker ADBE dropped from a toppy nearly 690 bucks in late 2021, part of those Covid driven highs, to about the four hundreds for most of 2025. And it's continued to decline to well under 300 bucks this year. So I asked on TV and on
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John Curto
this show, when would the CEO who's
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Ann Barry
otherwise had a good run over his 18 years step down to make way for a more AI savvy operator? Well, that's a change likely happening. Shantanoo Narayan announced last month that he'll transition to chair of Adobe's board, which once a successor is named, well over the past 24 hours. Finally, it looks as though there's other change coming. The company announced a $25 billion buyback plan. That's a big chunk of its $103 billion market cap, which gives investors a clearer view of how management intends to return capital through April 2030. And it's a big dose of financial engineering to get earnings per share metrics to look, frankly, a bit healthier. And then there's an operating change of fit, which is new products. Adobe just announced new partnerships, one with Xfinity that tests Adobe's brand intelligence offering, which learns from clients design systems, assets briefs and reviewer decisions and feedback that's been accumulated over time. And the point of this is to create a way to use an AI agent that understands your brand the way your most experienced teams do and applies that knowledge automatically across creative marketing and and brand compliance at any scale. Then Adobe also announced in the last 24 hours, a new partnership with Dick's Sporting Goods.
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John Curto
So I did actually go to the
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Ann Barry
press release on this one, and I got to tell you, it's long, it's packed with jargon and phrases like quote digital coaches, and frankly, it's not that easy to understand. But the plain English punchline that I could discern from it all seems to
- [03:48]
John Curto
be that the retailer is using Adobe
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Ann Barry
to create personalized interactions with its athlete customers. Now, both of these were unveiled in yesterday's investor presentation, and this is where Adobe presented a whole bunch of changes
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John Curto
to its products, a whole array of
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Ann Barry
features peppered with lots of terms du jour. So check it out. Go to Adobe's investor relations website, pull down that presentation, and you'll see lots of references to tokens and agentic and AI first and LLM optimizer. So the question is, will the use
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John Curto
of all these buzzwords work, work to
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Ann Barry
juice Adobe's share price over the long run? Certainly today there's some market enthusiasm because the stock is up around 3%. But this is just my own view, one person's view. I'm not piling in personally, and I suspect that Adobe's most enthusiastic buyer is really going to be, well, itself. Coming on up, we saw the Allbirds pivot from shoes to AI and thought it was a little bit ridiculous.
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John Curto
So instead, today, we're going to look
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Ann Barry
at a pivot that's really worked, and that's blackberries. And Palantir just expanded its partnership with the US Government in a deal the tech giant claims will, quote, secure the nation's breadbasket. We break it all down, but first, a word from our sponsor, Charles Schwab. Trading at Schwab is powered by Ameritrade, unlocking the Power of thinkorswim. The award winning trading platforms loaded with features that let you dive deeper into the market. You can visualize your trades in a new light on thinkorswim desktop with robust charting and analysis tools. Or while you uncover new opportunities with up to the minute market news and insights. Think or Swim is available on desktop, web and mobile to meet you where you are. So you never miss a thing. It's built by the trading obsessed to help you trade brilliantly. Learn more@schwab.com trading well, let's file today's conversation under where are they now?
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John Curto
So when I say BlackBerry the question is what comes to mind? Because when somebody says BlackBerry to me, I think of BlackBerry Brick Breaker or
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Ann Barry
I think of Snake.
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John Curto
Those are the games that are on the BlackBerry device. The era of clicking a key three times to get the letter that you want no longer. I am of course a devoted iPhone user, as so many other people are, but I do have fond nostalgic memories of BlackBerry when I was first going back into finance after graduate school. But BlackBerry very different now. John, what happened to it? Because it didn't disappear, which is what most people think.
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Tarek Abdelatif
Exactly. That's the headline here, is that if you haven't been paying attention, you may not know that BlackBerry is out there and the company is doing work. Ticker BB market cap of $2.7 billion.
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John Curto
So much bigger than you would have thought.
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Tarek Abdelatif
Absolutely. And doing well right now. Shares up over 44% in the last year. And a lot has changed at the Canadian company over the past decade. It quietly transformed from the quasi smartphone. Was it a smartphone? Yes, it was the first smartphone.
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Ann Barry
Well, it was sort of smart. It didn't have as high of an
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John Curto
IQ as Apple has now, but it
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Ann Barry
was smart enough at the time relative to other options. Yes.
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Tarek Abdelatif
It's a security software company working with governments and critical industries. I went to their webpage and right there on the homepage is a picture of the Pentagon. They do business with the federal government and believe it or not, automakers. And we'll get into that in a moment.
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John Curto
Well, Apple launched the iPhone in 2007. Do you remember this? And it was sort of the beginning of the end. It was the death knell for BlackBerry. But it's very interesting, by 2010 almost half of US based smartphone subscribers were still using BlackBerry. The really pivotal point came there was a poorly received launch of the BlackBerry Storm which featured a touch screen that was almost impossible to use. So it basically compared very poorly to Apple which was itself innovating all of which led to BlackBerry's demise as a phone company. And its share price plunged from an all time high of $144 in 2008 to a low of 6 bucks. That was in 2013.
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Tarek Abdelatif
And so that screen, I don't remember it. I didn't have a. I remember it coming out the BlackBerry store and what a disaster it was. I didn't have one. But the idea is that the screen would respond to harder touch or lighter touch.
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John Curto
Oh, touch sensitive.
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Tarek Abdelatif
Touch sensitive. That was the innovation and it did not work.
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John Curto
Yeah, I didn't bother trying.
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Tarek Abdelatif
But inside that BlackBerry there was internal tech that was the forefront of many software security standards in mobile, including end to end encryption, which we now are associated with imessages and things like that. But at the time BlackBerry had it and I remember it was popular on Capitol Hill, Barack Obama insisted on keeping his BlackBerry and the company has leaned into the security advantage over the years developing qnx, that's secure operating software used in cars and medical devices and being rolled out into other applications.
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Ann Barry
That's really interesting.
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John Curto
I did not note that Barack Obama insisted on keeping his BlackBerry, but I do remember long after I moved over to iPhone and long after the sort of 2013 pivotal moment, I first responders and law enforcement officers were often still using, I think blackberries and internationally too, there was a lot of use of it again, especially when it came to emergency responses.
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Tarek Abdelatif
So to your point, and spoiler alert, lots of local first responders across the United States still use this BlackBerry software to this day.
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John Curto
It's amazing.
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Ann Barry
So I guess the question is, how
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John Curto
do we get here? Well, the CEO John Gio Matteo said BlackBerry is, quote, no longer a company in transition, but a growth company which with a proven track record of execution. Taking a look at earnings, earlier this month, BlackBerry beat expectations, posting adjusted earnings of 6 cents a share for its fourth quarter, up from 3 cents last year. And revenue. Drumroll please.
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Ann Barry
Right.
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John Curto
Totaled $156 million, up 10% from a year ago. And it was this Q and A secure operating system that was really the star of the show.
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Tarek Abdelatif
Absolutely. Revenue in that division rose 20% year over year to 79 million DOL. And this is the takeaway that I was shocked by. The software is used by almost every major Automaker, including Ford, BMW, Audi and Toyota. It's in over 250 million vehicles. Think about all the digital instruments on your panel, advanced driver assistance, braking, things like that. This QNX, BlackBerry's tech is in all of that and it's also expanding beyond cars. It's now being used into the design of robots used in factories and industrial settings. And, and we know that this is physical AI, could be the next thing. And BlackBerry CEO is one of those who sees robotics and physical AI as the long term growth for the company.
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John Curto
I mean, it's amazing. You never would have thought it, right? I remember when Nokia, for example, went through also this transition. It went from being, remember this sort of brick phones. I used to love my Nokia and remember the flip version that came around too. Anyway, so these are. They've all moved on. BlackBerry is now projecting full year 2027 revenue of somewhere between 580 and 611 million dollars and operating cash flow, which is what I'm focused on. When you get these businesses that have sort of legacy but managed to turn themselves into something else, targeting about $100 million, which is nearly double this year's operating cash flow. Look, I'm so glad we got a chance to talk about this because last week we did unpack Allbirds, the shoe company's pivot, into this new business called newbird. And what it's trying to do in its new incarnation is buy GPUs and effectively lease them out. Right. And John, you and I had this conversation. I got quite heated and said this just boggles my mind. I'm frustrated that people are buying into this. We've seen some kind of pivot along these profoundly different lines in 2017 and 18 when we saw businesses suddenly becoming cryptocurrency companies. And I'm skeptical about allbirds, actually beyond skeptical about Allbirds. But, but the reason that this case study, BlackBerry does intrigue me is that it goes to show that pivots. Pivots are possible.
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Tarek Abdelatif
Yes.
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John Curto
And they're possible even when a brand is sort of dead to its original product category. Where there is a will, there sometimes really can be a way because there
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Tarek Abdelatif
actually was software there. I think what the Allbirds we were talking about is their plan is vague. We're going to somehow get a hold of gpos.
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John Curto
Right. And apparel to gpos. Absolutely no adjacency there whatsoever.
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Tarek Abdelatif
This was a company that looked in and said, what do we have here? What can we really capitalize on? And I'm wondering when I see this as a shareholder in any of these companies, as an investor. I bought BlackBerry a long time ago.
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John Curto
When? When did you buy it?
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Tarek Abdelatif
Well, I'll be honest, I bought it when it was a meme stock. And I was just learning because I was, you know, seeing these prices go up. And so my Investment is down 98% in BlackBerry. But I wonder with these companies that evolve or you, what happens when an investor holds onto these stocks and then the company reinvents itself. I keep thinking of Nvidia. If you thought, oh well, I'm just investing. It's computer games, like this chip. They make computer games. And are computer games going to be popular forever? Well then they figure out that the chip that they're using, the graphic processor is, is used for AI. And so then if you were believing in Nvidia before it even had that pivot, you were greatly rewarded. So I wonder as an investor, at what point do you cut bait?
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John Curto
Yeah, I think, I think, I think
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Ann Barry
that the parallel is a good one.
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John Curto
I think it was a bit different from Nvidia was the actual base business was good, right? It was actually very. And so the fact that then I turned out to be an application was like the icing and cherry on the top of the icing. You know, it was just such a different leveling up. I think the thing that is so much more impressive here about BlackBerry is everyone thought this was dead.
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Tarek Abdelatif
Yes.
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John Curto
No one thought Nvidia was dead, but BlackBerry everyone thought was dead. But I think it's a great question. Like I can tell you what I would do and this perhaps is too short sighted. If I was 98% down and I basically did some of this at the end of last year, not as much down, but for some of these software companies, I. Tax loss harvest.
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Tarek Abdelatif
Yes.
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John Curto
Not investment advice people, but this is one where I go, okay, I'll take that loss against again in a. Where those are available to me. But.
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Tarek Abdelatif
And last week was tax day.
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John Curto
Yeah.
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Tarek Abdelatif
And through a series of moving and changing jobs, I owed the state of New York some money. And I thought maybe today's the day to sell BlackBerry. It was too much to pull off. But next year I'm thinking about it.
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John Curto
Okay, looking ahead. So now you're going to look at 20, 26 and what does that mean ahead of your filing? So I do think there are some moments where you can say, okay, there's
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Ann Barry
going to be a pivot.
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John Curto
My question for you is, is BlackBerry's pivot ever going to turn into something that is worth more to you than that tax loss is going to be worth to you. The point is watching these investments decide
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Ann Barry
if you're not going to give up,
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John Curto
if you're curious, is there going to be some real there there, it's kind of exciting.
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Ann Barry
And by the way, the thing I
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John Curto
look for in businesses like this Is
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Ann Barry
someone going to turn up and buy
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John Curto
BlackBerry at some point?
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Tarek Abdelatif
Right.
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John Curto
Is it an acquisition target? It's a fallen angel, but it's still there. And again, let's just recap that $2.7 billion ish market cap in recent weeks. So one to keep on watching. Who knows?
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Tarek Abdelatif
Absolutely.
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John Curto
You're going to have to report back, John, to tell us how your position's going on this one and whether you choose to hang on to it.
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Tarek Abdelatif
Well, as a final note, I Berry wasn't a flip phone, but with everything old being new again and Apple coming out with a flip phone, maybe there'll be a resurgence of the black.
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Ann Barry
Oh my gosh.
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John Curto
All the really, really young people are going to say this is cool. We're going to bring it back together with our wire phones. I love it.
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Ann Barry
When we come back, it's been through
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John Curto
the headlines, moving the markets today. There it is, the closing bell at
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Ann Barry
4pm on the east Coast. The markets wrapping up for the day, the S&P 500 closing up just over a percent while the NASDAQ hit new highs. The Dow also up there, about two thirds of a percent for all of them. Green across the screen as the US Extends a ceasefire with Iran. Other market headlines, Spirit Airlines shares skyrocketed more than 400% today. That's after the Wall Street Journal reported the White House is nearing a rescue deal for the budget airline. Just yesterday, President Donald Trump told CNBC that, quote, maybe the federal government should help that one out. And it looks like the federal government may actually be following through. A bailout for Spirit would be a rare move. Support for a single airline hasn't happened very often. Now, the government has helped the airline industry more broadly before, notably during the COVID 19 pandemic. But again, those efforts targeted the broader industry. And according to the Journal, citing people familiar with the matter, Trump has already been in talks with Commerce Secretary Howard Lutnick and Transportation Secretary Sean Duffy about keeping Spirit alive. Staying in the aviation world, United Airlines shares weren't flying as high today. In fact, the stock fell almost 7% after its first quarter earnings release. The airline beat estimates but slashed future guidance as fuel costs continue to surge. And as we've seen this week already, investors don't like uncertainty. Alaska Airlines stock was punished earlier this week as it suspended 2026 guidance. While United does say that it's reworking its schedules to try to adjust to the new oil price regime, capacity in the second half of the year is now expected to grow just around 2% down from the 3.4% growth seen in the first quarter.
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John Curto
Nevertheless, CEO Scott Kirby tried to stay
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Ann Barry
optimistic, saying, quote, bookings are strong and pointing again to that K shaped economy. The airline, like so many others, leaning into higher income travelers who've proven to be less sensitive to rising prices.
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John Curto
And while we're up there in the
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Ann Barry
air, we've got to turn to SpaceX, which is going all in on AI ahead of what could be the largest IPO in history. Need to remind you again, we're going to touch on that tomorrow with regards to Tesla's earnings and what it means for Musk fans at large. Well, SpaceX says it's working with AI coding startup Cursor to create the world's best coding and knowledge work. AI self described. Well, as part of the deal, SpaceX could acquire Cursor for $60 billion or pay $10 billion for ongoing collaboration. This comes as Elon Musk looks to turn the company SpaceX into an AI heavyweight earlier this year, merging the space company with his AI startup Xai to value the combined entity at the time at $1.25 trillion, a valuation rumored to be going up in advance of that IPO, which could hit close to $2 trillion instead.
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John Curto
Well, this relationship with Cursor is the
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Ann Barry
latest example of AI startups teaming up with major players to secure compute power. Just yesterday, Amazon expanded its partnership with Anthropic, and as part of that deal, the AI gets broader access to Amazon's custom AI chips.
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John Curto
And now looking across the street to
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Ann Barry
changes in the C suite. Apple not the only one shaking up the top of its ranks this week, with Best Buy now following suit. Shares of the electronics company tumbled almost 5% today. That's after announcing that CEO Corey Barry will hand over the reins to longtime company veteran Jason Bonfig at the end of October. He's currently chief customer, Product and Fulfillment officer and joined Best Buy as an inventory analyst in 1990. So another one of these stories of CEOs who've grown up in the ranks, something we've seen with the new Target CEO as well, who joined as a business school intern. Well, this new role could present the most challenging part of Bonfig's tenure at Best Buy. The leadership transition comes as its sales have lagged over the past four years and its stock has dropped more than 50% since all time highs in 2021.
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John Curto
Best Buy has attributed that to a
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Ann Barry
slower housing market, to price conscious US Consumers and less tech innovation. So we'll be watching closely to see if Bonfig has the chops to turn this one around. And he'll at least get some help at the onset of this new chapter, with CEO Corey Barry staying on as a strategic advisor for six months after she steps down. And finally, Palantir is heading to a place perhaps you wouldn't have thought was intuitive. It's heading to the farm. Shares in the company rising about 4% today after announcing a $300 million deal with the U.S. department of Agriculture. Yes, you heard that right. The U.S. department of Agriculture, Palantir said the deal will, quote, secure the nation's breadbasket, doing so by using Palantir software and farmland management. This comes as US Farmers continue to face rising costs stemming from geopolitical and trade pressures. In 2025, soybean exports to China dropped more than 70% amid tariff tensions. And just to put that in context, in 2024, the U.S. exported about $12.5 billion of soybeans to the Chinese market. Well, this new partnership expands Palantir's footprint with the US Government. It already has partnerships in place with the US army and the Department of Homeland Security. And our guests, there are more to come. That's it for today's Brew Markets Daily.
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Tarek Abdelatif
Brew Markets Daily is hosted by Anne Barry, produced by John Curto, Tarek Abdelatif, Avani Laroya and Emily Miller. Our technical director is Uchena Waugh, Brittany Dotako is our audio engineer. And the president of Morning Brew, Inc. Is Devin Emery.
- [20:29]
John Curto
Wake up tomorrow with the Morning Brew newsletter and tune in to Neil and Toby on Morning Brew Daily. We'll see you back here tomorrow.
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Ann Barry
Same time, same place.
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