Brew Markets Podcast – Episode Summary

Episode: Inside Adobe’s AI Identity Crisis & Target Misses the Mark
Date: November 19, 2025
Host: Ann Berry
Co-host/Producer: John

Overview

This episode of Brew Markets, hosted by Ann Berry, dives into the latest developments with Adobe amidst the AI revolution, examines Target’s ongoing struggles as it shifts leadership, and highlights Viking’s strong cruise business performance. The show features sharp, data-driven market analysis with the conversational, candid tone audiences expect from Morning Brew.

Key Discussion Points & Insights

1. Adobe’s AI Identity Crisis and Acquisition Moves

[00:31–04:43]

• Background:
  Adobe’s share price is down 35% on the year, as competition from both established and rising AI-driven players (DocuSign, OpenAI, MidJourney) gnaws at their market share in document management and visual creation tools.

• Perceived Innovation Gap:

  • Ann Berry critiques Adobe’s "good scout angle" around responsibly sourced AI (not ingesting customer data), saying it fails to offset a basic truth:

    “Adobe is not innovating quickly or differently enough.” (Ann Berry, 01:01)

• Possible Strategies for Adobe:

  • Path 1: Make a bold acquisition of a true AI innovator (Figma was cited as a missed opportunity; Adobe’s $20B bid fell apart after regulatory concerns, and Figma IPO’d at $60B, now at $17B).
  • Path 2: Acquire assets with vast proprietary data for scale and potentially lucrative licensing deals.

• Recent Move – SEMrush Acquisition:

  • Adobe announced a $1.9B acquisition of SEMrush, an SEO and AI visibility tool provider.
  • Ann finds it "anticlimactic," pitching it as insufficient for Adobe’s scale and needs:

    “This does not move the needle for a software giant with an existential crisis.” (Ann Berry, 02:36)

  • Observes Adobe’s healthy cash flow situation and suggests bigger action is both possible and necessary.

• Market Reaction:

  • SEMrush stock popped 75%; Adobe was down 2.5% intraday and 35% YTD.

2. Target’s Struggles: Earnings, Leadership, and Strategy

[05:24–13:37]

• Q3 Results:

  • Net sales: $25B (down 1.5% YoY)
  • Operating income: $950M (down 19% YoY)
  • Same-store sales: three consecutive quarters of declines (down 3.8% this quarter)
  • Shares are down 36% YTD.

• Leadership Shift:

  • Michael Fiddelke, a Target insider, will take over as CEO next February.
  • He’s begun by cutting 1,800 corporate jobs (8% of HQ workforce).

• Recent Moves:

  • AI/Tech: Partnership with ChatGPT for in-app shopping recommendations—called out as unoriginal, since Walmart and others have similar integrations.
  • Merchandising: Launching an exclusive frozen peppermint hot chocolate at Starbucks inside Target, met with humor and skepticism.

    “How can something be both frozen and hot at the same time?” (Ann Berry, 08:18)

• Investment/Revamp:

  • Announced $1B capex increase to refresh stores in 2026—a 25% hike, but not huge relative to quarter sales.
  • Ann questions whether it’s enough:

    “Is that billion dollars actually enough? ... an extra billion dollars of Capex next year? That sounds like a big number, but… compared to that sales number, that's not a big percent.” (Ann Berry, 12:47)

• Brand Identity Crisis:

  • Once seen as "Tar-jay," offering stylish products at accessible prices, Ann feels Target now sits awkwardly between discount players (TJ Maxx’s strong earnings cited) and the high end.
  • Walmart is effectively gaining market share at both ends.

    “Can you really be all things to all people at one point in time?” (Ann Berry, 12:25)

• Long-term Existential Threat:

  • Kmart cited as a warning: from 2,300 locations 30 years ago to almost none now, while Target currently has 2,000.

    “We often think it's unimaginable for gigantic companies to go away, but it does happen.” (Ann Berry, 13:03)

3. Viking River Cruises: Strong Results & Niche Positioning

[13:37–18:58]

• Performance:

  • Market cap: $27B; revenue: $2B (up 19% YoY)
  • Occupancy: 96% (up 19% YoY)
  • 70% of 2026 cruise days already booked as of November

• Business Model Insights:

  • The all-inclusive cruise value proposition continues to drive popularity.
  • Strong cash-flow advantage from advance deposits and bookings.

    “Follow the money, right? Follow the cash.” (Ann Berry, 15:05)

• Viking's Differentiation:

  • Focuses on riverboats (smaller, 100–200 passengers) versus oceanliners (thousands).
  • “Elegant ships designed not for entertainment but for enrichment.” (Ann Berry quoting Viking, 17:17)
  • No children: Viking is adults-only, giving them a year-round advantage; retirees are the primary demographic.

    “They don't want your kids... as people get older... people get tired of being on ships with children.” (John, 18:29)

• Broader Cruise Trends:

  • Noted that millennials are the fastest-growing demographic for cruise lines, potentially opening new markets.

4. Nerd-Out: The Retailer’s “53rd Week”

[20:32–23:09]

• Listener Question:

  • What’s a “53-week year” in retail accounting (prompted by Home Depot earnings)?

• Ann Explains:

  • Many retailers and restaurants don’t follow calendar years; they align quarters by day of week, resulting in a "52-53 week" year structure.
  • Every ~5 or 6 years, they add a week to realign with the calendar, boosting revenues/profits on paper for that year.
  • Companies flag this to help analysts normalize, “apples to apples,” for growth rates.

    “A 52 week year is only 364 days, so… every five or six years… companies insert an extra week, creating a 53 week year.” (Ann Berry, 21:49)

Notable Quotes & Memorable Moments

• On Adobe’s Dilemma:

  “Adobe is not innovating quickly or differently enough.” (Ann Berry, 01:01)

• On SEMrush Deal:

  “This does not move the needle for a software giant with an existential crisis.” (Ann Berry, 02:36)

• On Target’s Brand Identity:

  “Target is neither cheap enough nor high end enough, right?” (Ann Berry, 10:18)

• On Store Refresh Spending:

  “Can you imagine... just walk into the square footage... let alone at the scale of these stores?” (Ann Berry, 08:49)

• On Market Share Battles:

  “Can you really be all things to all people at one point in time?” (Ann Berry, 12:25)

• On Industry Downfall:

  “We often think it's unimaginable for gigantic companies to go away, but it does happen.” (Ann Berry, 13:03)

• On Viking’s Marketing:

  “Elegant ships designed not for entertainment but for enrichment.” (Ann Berry quoting Viking, 17:17) “They don't want your kids... people get tired of being on ships with children.” (John, 18:29)

• On the 53rd Retail Week:

  “A 52 week year is only 364 days, so… every five or six years… companies insert an extra week, creating a 53 week year.” (Ann Berry, 21:49)

Timestamps for Major Segments

• Adobe’s AI Crisis and SEMrush Acquisition: 00:31–04:43
• Target Q3 Review, CEO Change, Brand Crisis: 05:24–13:37
• Viking River Cruises and Cruise Industry: 13:37–18:58
• Listener Q&A: 53rd Week Explained: 20:32–23:09

Tone & Style

Ann Berry is candid, skeptical, and witty throughout the episode. The conversational style includes playful banter, audience Q&A, and a focus on demystifying jargon, making complex market moves accessible and entertaining.

Conclusion

This episode critiques Adobe’s acquisition strategy in the face of existential AI-driven threats, dissects Target’s struggle to innovate and compete as it changes leadership, and celebrates the business model strengths and niche positioning of Viking Cruises. It closes by enlightening listeners on the arcane but meaningful concept of the “retail 53rd week”—giving investors another tool to understand surprising performance figures in retail earnings.

Useful for:

• Investors tracking Adobe’s and Target’s pivots
• Retail professionals watching sector trends
• Anyone interested in business model resilience and accounting quirks
• Casual listeners seeking witty, insightful, jargon-busting market talk