Investors' Playbook : Why Adobe Stock Plunges

📖Today’s Agenda

• Stock Market : Adobe Beats Quarterly Targets But Gives In-Line Sales Outlook

• Entrepreneurship : TOP 3 AI TOOLS OF THE WEEK

• Personal Finance : What is a money market account?

📈Stock Market

Adobe Beats Quarterly Targets But Gives In-Line Sales Outlook

Digital media and marketing software firm Adobe (ADBE) beat Wall Street's targets for its fiscal third quarter. But its outlook for the current period called for earnings only modestly higher than views on in-line sales. ADBE stock fell Friday on the news.

The San Jose, Calif.-based company late Thursday said it earned an adjusted $4.09 a share on sales of $4.89 billion in the quarter ended Sept. 1. Analysts polled by FactSet had expected Adobe earnings of $3.98 a share on sales of $4.87 billion. On a year-over-year basis, Adobe earnings rose 20% while sales advanced 10%.

For the current quarter, Adobe forecast adjusted earnings of $4.13 a share on sales of $5 billion. That's based on the midpoint of its guidance. Wall Street had been modeling earnings of $4.06 a share on sales of $5 billion for the fiscal fourth quarter. In the year-earlier period, Adobe earned an adjusted $3.60 a share on sales of $4.53 billion.

"Adobe delivered world-class margins and earnings in Q3, while making significant investments in our technology platforms," Chief Financial Officer Dan Durn said in a news release.

He added, "Our innovation engine, global reach and strong operational rigor position us to capture the massive opportunities ahead."

ADBE Stock Falls After Report

On the stock market today, ADBE stock slid 4.2% to close at 528.89. During the regular session Thursday, ADBE stock dipped 0.3% to close at 552.16.

Lately, Adobe has been adding generative artificial intelligence capabilities to its creative software.

On Wednesday, Adobe announced the commercial availability of its Firefly generative AI tool. Firefly is now natively integrated into Creative Cloud apps like Photoshop and Illustrator. Firefly also is in Adobe Express and Adobe Experience Cloud.

Adobe increased its Creative Cloud pricing plans by 6% to 10% to account for the new generative AI features. It will implement the new prices starting Nov. 1.

"We are unleashing a new era of AI-enhanced creativity around the world with innovations across our product portfolio," Chief Executive Shantanu Narayen said in a written statement.

🎯Entrepreneurship

TOP 3 AI TOOLS OF THE WEEK

1. V0.Dev

TEXT TO UI/UX

A generative user interface system. It generates copy-and-paste friendly React code based on Shadcn UI and Tailwind CSS. It generates code based on simple text prompts and gives you three choices of AI-generated user interfaces.

2. Stable Audio

TEXT TO MUSIC

Create music with AI. Create custom-length music just by describing it.

3. MyArchitectAI

TEXT/IMAGE TO 3D RENDERING

An AI-powered platform for architectural visualization. It can transform hand-drawn sketches and design concepts into stunning photorealistic renders in seconds. With an extensive library of styles and lighting options, architects, interior designers, and real estate professionals gain unparalleled creative freedom.

💸Personal Finance

What is a money market account?

Money market accounts are deposit accounts that share features of savings and checking accounts. They’re interest-bearing like a savings account — your balance earns interest — but they also frequently offer check-writing capabilities and debit card access like a checking account.

Besides having components of savings and checking accounts, money market accounts also have distinct features that set them apart. Here’s what to know if you’re interested in opening one.Don’t sit down and wait for the opportunities to come. Get up and make them.

A common misconception is that money market accounts are the same as money market funds. While their names sound similar, the two work very differently. Unlike money market accounts, which carry deposit insurance, money market funds are not deposit accounts or insured by the FDIC or NCUA.

Instead, money market funds are a type of mutual fund you can invest in through a brokerage. These funds can gain or lose money regularly based on stock market performance. Your money market account balance isn’t tied to market performance.

How do money market accounts work?

While money market accounts have characteristics of savings and checking accounts, they often come with relatively high minimum balance requirements. For instance, you may need to maintain a $3,000 minimum balance with a money market account to avoid monthly fees. This generally isn’t the case with checking or savings accounts.

In addition to minimum balance requirements, money market accounts may have tiered annual percentage yield (APY) structures that set them apart from other deposit accounts. Higher APYs may be reserved for account holders with larger balances, while smaller balances may earn less interest. For instance, a bank might offer a 0.10% APY on balances up to $5,000, a 0.50% APY on $5,001 to $10,000, and so on. Rates on money market accounts are typically variable, meaning they’ll likely change over time.

Pros of money market accounts

• Relatively high APYs

• Flexibility

• FDIC insurance

Cons of money market accounts

• May have high minimum balance requirements

• May have a tiered APY structure

• Fees and withdrawal limits may apply