In a bold move that has captured the attention of Wall Street, Michael Burry, the famed “Big Short” investor, has publicly urged Adobe Inc. (NASDAQ:ADBE) to acquire AI firm Midjourney to defend its dominance in the creative software market.



Posting on X, Burry stated that “Adobe $ADBE should buy Midjourney” and other founder-led creative firms to stabilize its position.



Leveraging his reputation for spotting market pivots, Burry argued that the software giant must act decisively to maintain its edge, telling the company: “@Adobe, you have the cash flow to protect your franchises.”



It delivered record operating cash flows of over $10 billion in the previous fiscal year on Dec. 10, 2025.



The recommendation comes as Adobe faces a “brutal 2026,” with shares down nearly 20% year-to-date. The stock has been battered, following the release of Google's Nano Banana 2, a free model offering “Pro-grade” quality that directly threatens Adobe's Firefly and Creative Cloud subscriptions.



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<blockquote>Adobe $ADBE should buy Midjourney. And any other small creative software company with a creative founder. @Adobe, you have the cash flow to protect your franchises. pic.twitter.com/bJ7KLCrmD5— Cassandra Unchained (@michaeljburry) March 5, 2026</blockquote>
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<h2>A Sector Under Siege</h2>



The broader software sector is currently weathering its worst performance relative to semiconductors since the 2000 dot-com peak. BTIG technician Jonathan Krinsky noted the sector is “probably oversold enough for a bounce,” while Jim Cramer recently observed that even companies with strong earnings, like Adobe, are watching their prices “wither and get blown away.”



Despite the downward trend, Adobe's fundamentals remain a point of contention. The company is trading at a P/E of 16.4x, with a first-quarter earnings catalyst looming on March 12.



Analysts maintain an average price target of $418, suggesting significant upside if the company can prove its resilience against free AI tools, according to Benzinga.



<h2>Protecting the Franchise</h2>



Burry's suggestion toward an acquisition strategy highlights a growing belief that Adobe must buy its way out of the current AI arms race.



By acquiring Midjourney, Adobe would not only eliminate a primary competitor but also integrate high-end generative talent to “protect your franchises” as Burry suggested.



<h2>ADBE Slips Nearly 20% In 2026</h2>



Adobe has declined 19.27% over the last six months and 19.50% year-to-date, significantly underperforming broader indices.



The stock was 37.56% lower over the year. On Thursday, the stock closed 3.16% higher at $281.74 apiece, and it was 0.12% lower in premarket trading.



Benzinga’s Edge Stock Rankings indicate that ADBE maintains a weaker price trend over the short, medium, and long terms, with a moderate quality score.



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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.



Image via Shutterstock

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Michael Burry has urged Adobe Inc. to acquire AI firm Midjourney to protect its market position amid increasing competition from Google, which has negatively impacted Adobe's stock. Burry emphasized that Adobe has the cash flow to make such acquisitions, especially as it faces a challenging year with shares down nearly 20%. The broader software sector is struggling, and analysts suggest that acquiring Midjourney could help Adobe maintain its competitive edge against free AI tools. Despite recent stock declines, analysts remain optimistic about Adobe's potential for recovery.

- Michael Burry has urged Adobe Inc. to acquire AI firm Midjourney to strengthen its position in the creative software market amid significant share declines.  
- Burry's recommendation comes as Adobe faces intense competition from free AI models, with its shares down nearly 20% in 2026.  
- Despite this, analysts see potential upside for Adobe if it can navigate the evolving landscape of AI tools effectively.

Michael Burry Urges Adobe To Buy AI Firm Midjourney To Save Creative Moat