Adobe makes digital media and publishing software tools, and their products have been in high demand for years. A lot of SaaS companies have seen their share prices and earnings multiples shrink due to inflation fears recently.
Adobe has a clean balance sheet, high margins, and demand for their products, but that does not tell the whole story as to why Adobe has weathered the recent storm so well.
Thousands of small businesses use Adobe products to produce their marketing content, and with the major retailers trimming marketing budgets, especially social media ads, the ads are cheaper for the small businesses.
Social media companies like Meta have said they are seeing less ad spend by their biggest clients, which lowers the price for the little guys, who will be using Adobe products to create their content.
We are looking at a major economic slowdown, and possibly a recession. But not everything slows down evenly across the board. There is a solid case for Adobe to have a place in your recession proof basket of stocks much like the Walmarts and Proctor and Gambles of the world.