We recently published a list of Jim Cramer’s Thoughts on Liberation Day, Tariffs, and 17 Stocks to Watch Right Now. In this article, we are going to take a look at where Adobe Inc. (NASDAQ:ADBE) stands against other stocks that Jim Cramer discusses.

On Tuesday, April 1^st, the host of Mad Money opened the show by focusing on President Trump’s tariffs and the economic risks ahead of ‘Liberation Day’. While Cramer expressed sympathy for the President’s goals, he warned viewers that the consequences could be severe for both consumers and the broader economy:

“Now as someone who’s been a huge critic of unrestrained free trade, I am very sympathetic to what President Trump is trying to accomplish with these tariffs. Every other country on earth tries to protect its own domestic industries except America which has spent decades letting foreign competitors steamroll our guys in exchange for cheaper stuff. President Trump is justifiably furious about this he wants to do something about it but solving the problem is going to hurt. We don’t know how much our prices will go up for just about everything, but we do know those tariffs will be used as an excuse to raise prices across the board. It’s been very hard to get a sense of the overall damage.”

But despite understanding the motivation behind the policy, Cramer was blunt about the scale of economic disruption that a proposed 20% tariff on all imports would cause:

“Speaking as someone who’s not a fan of free trade I have to be honest here, a 20% across the board tariff on almost all imports that would be horrendous for the economy. That’s a 20% increase on everything we buy from overseas and we import a huge amount of foreign goods in America, and those goods are cheap because that’s the deal. There’s plenty of competition from these companies but with the exception of the auto industry and those that contribute to it -mainly steel – it doesn’t matter anymore. The truth is the jobs that are meant to be protected by tariffs were automated out of existence a long time ago.”

Cramer mentioned that even the industries that stand to benefit in theory, like autos and steel, aren’t necessarily helping the average American:

“The tariffs aren’t protecting us from anything because we barely make anything anymore. The horses left the barn ages ago. Ford and GM will be able to make more money by raising prices but who does that help besides their shareholders and union members? What’s good for General Motors is not necessarily good for America anymore. All people know is that cars will be more expensive; they don’t care about who makes them.”

He also criticized the administration’s execution, calling out the lack of clarity and coordination behind the policy rollout and questioning whether any American companies will actually be spared from the impact:

“I wish the White House were more serious about making the tariffs work. Our country’s been crushed by foreign imports that are typically made by cheap labor and often subsidized so they destroy our jobs. But the jobs are gone. We had almost a million seamstresses in this country four decades ago now we have almost none; they aren’t bringing back those jobs. Sure, some companies thought they’d be buying immunity by building new factories here, but there’s nothing on paper that suggests that the president will spare them. Is there really no sanctuary?”

Wrapping up the opening segment, Cramer reminded viewers that while many Americans may support a “tough-on-trade” agenda, their real fear is inflation; and it’s inflation that the tariffs will likely exacerbate:

“Finally, most Americans are worried about inflation; not tariffs. That’s what got Trump elected for heaven’s sake. As much as I rail against the devil’s bargain that gave our country the cheap stuff at the cost of domestic jobs, cheap stuff is what America wanted. […] Here’s the bottom line when the book is written on this moment I think we’ll question what we were liberated from on Liberation Day and again I think Trump is totally justified in cracking down on our trading partners but that doesn’t mean it will be good for the economy.”

Our Methodology

For this article, we compiled a list of 17 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on April 1. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the fourth quarter of 2024, which was taken from Insider Monkey’s database of over 1,000 hedge funds.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

A team of engineers and scientists collaborating at a workstation surrounded by their applications and solutions.

Adobe Inc. (NASDAQ:ADBE)

Number of Hedge Fund Holders: 117

Jim Cramer called out Adobe Inc. (NASDAQ:ADBE) as one of the major enterprise software names that’s been hit hard recently, expressing his own concerns over competition from generative AI. He said:

“Adobe, what a great company. Its stock is down almost 35% from its high set last year […] Adobe has come up with a few AI tools of its own headlined by Adobe Firefly – it’s a Lamborghini, wow! It’s a really impressive technology. But the problem is OpenAI can also do these things too. So is Adobe being hurt or helped by AI? It’s really hard to say. […] I’m not sure I’d stick my neck out for Adobe with its generative AI threats.”

Adobe is investing heavily in generative AI across its Creative Cloud suite, but faces competition from newer AI-native tools. However, its massive install base and enterprise subscriptions give it a solid revenue moat.

Guinness Global Innovators stated the following regarding Adobe Inc. (NASDAQ:ADBE) in its Q4 2024 investor letter:

“Adobe Inc. (NASDAQ:ADBE) faced challenges this year, ending as the Fund’s worst-performing stock (-25.5% USD). Investor concerns about Adobe’s AI strategy and underwhelming earnings reports played a key role in performance over the year. Adobe started the year with optimism surrounding its generative AI innovations and the company seemed poised to capitalize on the surging demand for creative and marketing automation tools. Its AI-driven platform, Firefly, launched in March 2023, quickly gained traction, generating over 16 billion creative outputs and setting adoption records. However, despite this strength, Adobe’s stock has underperformed, as earnings reports over the year have appeared softer than initially expected from investors. The market reaction however was not caused by scepticism about Adobe’s AI products and tools, but rather driven by concerns on the ability to monetise these quickly. The creative design market has seen intensifying competition with competitors like OpenAI, Canva and even startups introducing generative AI content tools such as text-to-video tools. Adobe’s strategy has appeared to be focused on prioritising widespread adoption over immediate monetization, echoing its successful strategy with PDF in previous years. While larger enterprises have adopted and appreciate Adobe’s ‘commercially safe’ tools compared to peers, Adobe sees a large opportunity amongst those that were not traditionally users of the Adobe’s tools, whether enterprise employees or non-enterprise customers and have thus chosen to drive proliferation of their tools in these ‘untapped’ consumers and delay monetisation. Whilst some AI tools have missed revenue expectations through the year, the increased proliferation and the increasing costs of creating content should improve Adobe’s prospects of monetisation into FY25. Further, despite these short-term challenges, Adobe has a track record of high-quality attributes and long-term growth prospects. Its extensive distribution network, and loyal customer base provide it with a durable competitive edge. The company’s subscription-based model, which accounts for over 90% of its revenue, ensures stable cash flows and high margins. Finally, its brand equity as the industry standard in creative and document solutions supports ongoing market leadership, allowing us to remain confident in Adobe’s ability to navigate current challenges and deliver sustained value over time.”

Overall, ADBE ranks 13th on our list of stocks that Jim Cramer discusses. While we acknowledge the potential of ADBE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than ADBE but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.