Adobe Inc., together with its subsidiaries, operates as a diversified software company worldwide. It operates through three segments: Digital Media, Digital Experience, and Publishing and Advertising. The Digital Media segment offers products, services, and solutions that enable individuals, teams, and enterprises to create, publish, and promote content; and Document Cloud, a unified cloud-based document services platform. Its flagship product is Creative Cloud, a subscription service that allows members to access its creative products. This segment serves content creators, students, workers, marketers, educators, enthusiasts, and communicators. The Digital Experience segment provides an integrated platform and set of applications and services that enable brands and businesses to create, manage, execute, measure, monetize, and optimize customer experiences from analytics to commerce. This segment serves marketers, advertisers, agencies, publishers, merchandisers, merchants, web analysts, data scientists, developers, and executives across the C-suite. The Publishing and Advertising segment offers products and services, such as e-learning solutions, technical document publishing, web conferencing, document and forms platform, web application development, and high-end printing, as well as Advertising Cloud offerings. It also provides consulting, technical support, and learning services. The company offers its products and services directly to enterprise customers through its sales force and local field offices, as well as to end users through app stores and through its website at adobe.com. It also distributes products and services through distributors, value-added resellers, systems integrators, software vendors and developers, retailers, and original equipment manufacturers. The company was formerly known as Adobe Systems Incorporated and changed its name to Adobe Inc. in October 2018. Adobe Inc. was founded in 1982 and is headquartered in San Jose, California.

Adobe Inc. демонстрирует сильные финансовые показатели, что видно из высоких значений ROE, ROA и маржи прибыли, которые значительно превышают медиану отрасли. Тем не менее, некоторые мультипликаторы, такие как P/E, P/B и P/S, показывают переоцененность компании по сравнению с аналогами, что вызывает опасения. Долговая нагрузка также выше медианы, что может увеличивать риски в условиях нестабильности. Производственные показатели, такие как выручка и чистая прибыль, продолжают расти, что поддерживает положительный взгляд на компанию. Однако низкий текущий и быстрый коэффициенты свидетельствуют о проблемах с ликвидностью. Таким образом, несмотря на сильные маржинальные показатели и рост прибыли, высокая оценка и долговая нагрузка создают риски, что следует учитывать при оценке целевой цены акций Adobe.

Adobe Inc.

Stock markets rallied in the U.S. following the ceasefire at the end of March.
*Stock prices used were the afternoon prices of April 30, 2026. The video was published on May 2, 2026.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Should you buy stock in Microsoft right now?
Before you buy stock in Microsoft, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Microsoft wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $496,473!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,216,605!*
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*Stock Advisor returns as of May 2, 2026.
Parkev Tatevosian, CFA has positions in Amazon, Lululemon Athletica Inc., Meta Platforms, Microsoft, Netflix, Pinterest, The Trade Desk, Uber Technologies, and Visa. The Motley Fool has positions in and recommends Adobe, Amazon, Broadcom, Lululemon Athletica Inc., Meta Platforms, Micron Technology, Microsoft, Netflix, Pinterest, Qualcomm, The Trade Desk, Uber Technologies, and Visa. The Motley Fool recommends the following options: long January 2028 $320 calls on McDonald's, long January 2028 $330 calls on Adobe, short January 2028 $340 calls on Adobe, and short January 2028 $340 calls on McDonald's. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

My 15 Top-Ranked Stocks to Buy Right Now in May (2026)

The S&P 500 Index ($SPX) (SPY) on Friday closed up +0.29%, the Dow Jones Industrial Average ($DOWI) (DIA) closed down -0.31%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.94%. June E-mini S&P futures (ESM26) rose +0.19%, and June E-mini Nasdaq futures (NQM26) rose +0.85%.
Stock indexes settled mostly higher on Friday, with the S&P 500 and Nasdaq 100 posting new all-time highs. The broader market found support on Friday from Apple, which rose more than +3% after forecasting stronger-than-expected revenue for Q2. Also, Atlassian closed up more than +29% to lead software stocks higher after reporting stronger-than-expected Q3 revenue. Stocks added to their gains on Friday after crude oil prices plunged, temporarily easing inflation concerns.
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Stocks fell from their best levels on a slightly negative Apr ISM report. The Apr ISM manufacturing index was unchanged at 52.7, weaker than expectations of an increase to 53.2. Also, the Apr ISM prices paid sub-index rose +6.3 to a 4-year high of 84.6, above expectations of 80.3.
Stocks were also pressured on Friday as trade tensions resurfaced, with President Trump threatening to raise tariffs on European automobile imports to as high as 25%, claiming the EU had failed to fully comply with a trade agreement negotiated with the US.
WTI crude oil prices (CLM26) gave up an early advance on Friday and closed down sharply by more than -3% on hopes that negotiations to end the US-Iran war will resume. Iranian Foreign Minister Abbas Araghchi said Iran is ready to continue diplomatic efforts with the US if the Americans change their approach and avoid "excessive demand, threatening rhetoric, and provocative actions." Crude prices initially moved higher on Friday after President Trump said he was sticking with a naval blockade of Iran, and Iran’s Supreme Leader, Mojtaba Khamenei, vowed not to give up Iran’s nuclear or missile technologies and said Iran would keep control of the Strait of Hormuz.
The Strait of Hormuz remains essentially closed, as about a fifth of the world’s oil and liquefied natural gas transits through the strait. Goldman Sachs estimates that the current disruption has drawn down nearly 500 million bbl from global crude stockpiles, with the drawdown potentially reaching 1 billion bbl by June.
The markets are discounting an 8% chance of a -25 bp FOMC rate cut at the next FOMC meeting on June 16-17.
Earnings results thus far this reporting season have been supportive of stocks. As of Friday, 82% of the 317 S&P 500 companies that reported Q1 earnings have beaten estimates. Q1 S&P 500 earnings are projected to climb +12% y/y, according to Bloomberg Intelligence. Stripping out the technology sector, Q1 earnings are projected to increase around +3%, the weakest in two years.
Overseas stock markets settled higher on Friday. The Euro Stoxx 50 and China's Shanghai Composite did not trade, with markets in Europe and China closed for the Labor Day holiday. Japan's Nikkei Stock Average closed up +0.38%.
Interest Rates
June 10-year T-notes (ZNM6) on Friday closed up by +1.5 ticks. The 10-year T-note yield rose +0.5 bp to 4.376%. T-notes settled little changed on Friday and found support on the -3% plunge in crude oil prices, which eased inflation expectations. Also, Friday’s weaker-than-expected Apr ISM manufacturing report was bullish for T-notes.
Gains in T-notes were limited on Friday after the Apr ISM prices paid sub-index rose more than expected to a 4-year high, signaling mounting price pressures, a hawkish factor for Fed policy. Also, rising inflation expectations are negative for T-notes, as the 10-year breakeven inflation rate rose to a 14.5-month high of 2.50% on Friday. In addition, Friday’s rally in the S&P 500 to a new record high reduced safe-haven demand for T-notes.
European government bond yields were mixed on Friday. The 10-year German Bund yield did not trade as European markets were closed for the Labor Day holiday. The 10-year UK gilt yield fell -4.8 bp to 4.964%.
ECB Governing Council member and Bundesbank President Joachim Nagel said the ECB will need to increase interest rates in June if "the inflation outlook does not improve markedly."
Swaps are discounting an 89% chance of a +25 bp ECB rate hike at its next policy meeting on June 11.
US Stock Movers
Apple (AAPL) closed up more than +3% after reporting Q2 revenue of $111.18 billion, better than the consensus of $109.66 billion, and forecasting Q3 revenue up +14% to +17%, well above the consensus of +9.1%.
Atlassian (TEAM) closed up more than +29% to lead software stocks higher after reporting Q3 revenue of $1.79 billion, stronger than the consensus of $1.69 billion. Also, Oracle (ORCL) and Datadog (DDOG) closed up more than +6%, and Salesforce (CRM) closed up more than +4% to lead gainers in the Dow Jones Industrials. In addition, Autodesk (ADSK), ServiceNow (NOW), and Workday (WDAY) closed up more than +3%, and Microsoft (MSFT), Intuit (INTU), and Adobe Systems (ADBE) closed up more than +1%.
SanDisk (SNDK) closed up more than +8% to lead gainers in the Nasdaq 100 and AI-infrastructure stocks higher after reporting Q3 revenue of $5.95 billion, well above the consensus of $4.72 billion. Also, Seagate Technology Holdings Plc (STX) closed up more than +7%, and Intel (INTC) closed up more than +5%. In addition, Micron Technology (MU) closed up more than +4%, and Advanced Micro Devices (AMD) and Microchip Technology (MCHP) closed up more than +1%.
Cryptocurrency-exposed stocks moved higher on Friday as Bitcoin (^BTCUSD) rose more than +2%. Strategy (MSTR) closed up more than +7%, and Riot Platforms (RIOT) closed up more than +6%. Also, Galaxy Digital Holdings (GLXY) closed up more than +2%, and Coinbase Global (COIN) closed up more than +1%.
Twilio (TWLO) closed up more than +23% after reporting Q1 revenue of $1.41 billion, above the consensus of $1.34 billion, and raising its full-year organic revenue forecast to up +9.5% to +10.5% from a previous estimate of +8% to +9%, stronger than the consensus of +8.7%.
Reddit (RDDT) closed up more than +12% after reporting Q2 adjusted Ebitda of $266.0 million, above the consensus of $221.3 million.
Veeva Systems (VEEV) closed up more than +9% after S&P Dow Jones Indices said the company will replace Coterra Energy in the S&P 500, beginning with the start of trading on Thursday, May 7.
Paramount Skydance Corp (PSKY) closed up more than +8% to lead gainers in the S&P 500 after Morgan Stanley double-upgraded the stock to overweight from underweight with a price target of $14.
Estee Lauder (EL) closed up more than +3% after reporting Q3 net sales of $3.71 billion, better than the consensus of $3.69 billion, and raising its full-year organic net sales forecast to +3% from a prior view of +1% to +3%, stronger than the consensus of +2.84%.
Roblox (RBLX) closed down by more than -18% after reporting Q1 daily active users of 132 million, below the consensus of 143.8 million.
Clorox (CLX) closed down more than -9% to lead losers in the S&P 500 after cutting its full-year adjusted EPS forecast to $5.45 to $5.65 from a previous forecast of $5.95 to $6.30, weaker than the consensus of $5.92.
Stryker (SYK) closed down more than -6% after reporting Q1 net sales of $6.02 billion, weaker than the consensus of $6.33 billion.
Amgen (AMGN) closed down more than -4% to lead losers in the Dow Jones Industrials and Nasdaq 100 after reporting Q1 product sales of $8.22 billion, below the consensus of $8.23 billion.
ResMed (RMD) closed down more than -4% after reporting Q3 constant currency growth of +7.9% y/y, below the consensus of +8.3% y/y.
Alaska Air Group (ALK) closed down more than -1% after Citigroup double-downgraded the stock to sell from buy with a price target of $32, citing exposure to soaring fuel costs.
Earnings Reports(5/4/2026)
Allison Transmission Holdings (ALSN), BioMarin Pharmaceutical Inc (BMRN), BWX Technologies Inc (BWXT), CNA Financial Corp (CNA), Corebridge Financial Inc (CRBG), Diamondback Energy Inc (FANG), Duolingo Inc (DUOL), Equitable Holdings Inc (EQH), IAC Inc (IAC), Inspire Medical Systems Inc (INSP), Lattice Semiconductor Corp (LSCC), Loews Corp (L), MSA Safety Inc (MSA), Norwegian Cruise Line Holdings (NCLH), ON Semiconductor Corp (ON), Palantir Technologies Inc (PLTR), Paramount Skydance Corp (PSKY), Pinnacle West Capital Corp (PNW), Pinterest Inc (PINS), RB Global Inc (RBA), Tyson Foods Inc (TSN), Vertex Pharmaceuticals Inc (VRTX), Viper Energy Inc (VNOM), Vornado Realty Trust (VNO), Williams Cos Inc/The (WMB).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

S&P 500 and Nasdaq 100 Post Record Highs on Solid Earnings

Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in SoundHound AI Inc (Symbol: SOUN), where a total volume of 233,254 contracts has been traded thus far today, a contract volume which is representative of approximately 23.3 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 91% of SOUN's average daily trading volume over the past month, of 25.6 million shares. Particularly high volume was seen for the $9 strike call option expiring May 01, 2026, with 24,142 contracts trading so far today, representing approximately 2.4 million underlying shares of SOUN. Below is a chart showing SOUN's trailing twelve month trading history, with the $9 strike highlighted in orange:
Adobe Inc (Symbol: ADBE) saw options trading volume of 46,378 contracts, representing approximately 4.6 million underlying shares or approximately 86.9% of ADBE's average daily trading volume over the past month, of 5.3 million shares. Especially high volume was seen for the $250 strike call option expiring May 01, 2026, with 3,150 contracts trading so far today, representing approximately 315,000 underlying shares of ADBE. Below is a chart showing ADBE's trailing twelve month trading history, with the $250 strike highlighted in orange:
And Rivian Automotive Inc (Symbol: RIVN) saw options trading volume of 202,988 contracts, representing approximately 20.3 million underlying shares or approximately 85.5% of RIVN's average daily trading volume over the past month, of 23.7 million shares. Especially high volume was seen for the $16 strike call option expiring May 01, 2026, with 16,267 contracts trading so far today, representing approximately 1.6 million underlying shares of RIVN. Below is a chart showing RIVN's trailing twelve month trading history, with the $16 strike highlighted in orange:
For the various different available expirations for SOUN options, ADBE options, or RIVN options, visit StockOptionsChannel.com.
Also see:
Energy Stock Dividends
WHR Insider Buying
Earnings History
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Noteworthy Friday Option Activity: SOUN, ADBE, RIVN

Key Points
Salesforce currently generates a larger amount of total revenue than Adobe across recent tracking periods.
Over the last eight quarters, the two companies have largely maintained continuous quarter-over-quarter revenue growth, though Salesforce experienced one slight sequential decline in the middle of this time frame.
Investors should monitor whether the absolute revenue gap between the two companies continues to slowly widen or if the growth trajectories begin to converge in upcoming quarters.
Adobe: Consistent Growth in Revenue
Adobe (NASDAQ:ADBE) primarily generates revenue through software subscriptions across its digital media and digital experience divisions, enabling creators and enterprise marketers to design, manage, and optimize digital content.
It announced the acquisition of Semrush and the upcoming transition of its chief executive officer, while reporting an approximately 30% net income margin for the quarter ended Feb. 27, 2026.
Salesforce: Larger Scale in Revenue
Salesforce (NYSE:CRM) primarily earns revenue by offering cloud-based customer relationship management software, enterprise analytics tools, and workplace communication platforms that connect businesses with their end customers.
It executed an organizational restructuring that included workforce reductions and leadership changes, and it posted a net income margin of about 17% for the quarter ended Jan. 31, 2026.
Why Revenue Matters for Retail Investors
Revenue here refers to the data provider's standardized income statement revenue line item and serves as the foundational indicator of how much total money a business brings in from its core operations before any expenses, taxes, or operating costs are deducted.
Quarterly Revenue for Adobe and Salesforce
Quarter (Period End)
Adobe Revenue
Salesforce Revenue
Q2 2024
$5.3 billion (period ended May 2024)
$9.1 billion (period ended April 2024)
Q3 2024
$5.4 billion (period ended Aug. 2024)
$9.3 billion (period ended July 2024)
Q4 2024
$5.6 billion (period ended Nov. 2024)
$9.4 billion (period ended Oct. 2024)
Q1 2025
$5.7 billion (period ended Feb. 2025)
$10.0 billion (period ended Jan. 2025)
Q2 2025
$5.9 billion (period ended May 2025)
$9.8 billion (period ended April 2025)
Q3 2025
$6.0 billion (period ended Aug. 2025)
$10.2 billion (period ended July 2025)
Q4 2025
$6.2 billion (period ended Nov. 2025)
$10.3 billion (period ended Oct. 2025)
Q1 2026
$6.4 billion (period ended Feb. 2026)
$11.2 billion (period ended Jan. 2026)
Data source: Company filings.
Foolish Take
Adobe and Salesforce are two very well-known software stocks. Therefore, it should come as no real surprise that these two stocks have suffered over the last year, as the market has turned bearish on the software-as-a-service (SaaS) model. Both stocks have declined by about 34% over the last year.
That’s a tremendous departure for these two stocks, which have consistently delivered solid returns. Indeed, Adobe’s 20-year compound annual growth rate (CAGR) is 9.6%, while Salesforce’s is 16.2%.
Zooming in on each stock’s valuation, there does appear to be an opportunity. Adobe’s price-to-sales (P/S) ratio now stands at 4.2x — its lowest ratio in more than a decade. Similarly, Salesforce now sports a P/S ratio of 4.1x — its lowest value since the 2008/2009 financial crash.
Granted, there are concerns about the strength of SaaS business models amid rapidly advancing artificial intelligence (AI) capabilities. However, Adobe and Salesforce continue to deliver solid revenue growth, and both companies are aggressively integrating AI-powered features into their software offerings.
Growth-oriented investors with an eye for value may want to take a closer look at these two stocks.
Should you buy stock in Adobe right now?
Before you buy stock in Adobe, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Adobe wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $504,832!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,223,471!*
Now, it’s worth noting Stock Advisor’s total average return is 971% — a market-crushing outperformance compared to 202% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of May 1, 2026.
Jake Lerch has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Adobe and Salesforce. The Motley Fool recommends the following options: long January 2028 $330 calls on Adobe and short January 2028 $340 calls on Adobe. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Adobe and Salesforce: Consistent Growth vs. Larger Scale in Revenue

Key Points
Adobe's board has authorized a $25 billion stock buyback plan.
The company has been a laggard over the last five years.
It faces several challenges ahead.
As artificial intelligence (AI) technology has propelled some companies to staggering heights over the last five years, it's left others behind. One of those companies that hasn't found its footing is Adobe (NASDAQ: ADBE). Adobe has been caught in a wave of worry, as investors fear AI will render some software stocks redundant.
In a sign of confidence and reassurance, Adobe recently announced a new stock buyback plan. But for whether investors should have that same confidence, we'll look at what to consider.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
The Adobe buyback details
On April 21, Adobe announced that its board had approved a stock buyback plan of up to $25 billion. That plan will run through April 30, 2030, roughly ending four years after the announcement.
If we judge the excitement around the announcement by the stock price, there wasn't much at all. Shares closed at around $247 on the day of the announcement and finished the week on April 24 at a little over $245. In other words, not only did the announcement not move the stock price, but it actually finished the week lower.
Given Adobe's stock price struggles, you would think the business is faring poorly. Surprisingly, revenue has steadily climbed over the last several years. It went from $21.5 billion in 2024 to $23.7 billion in 2025, and its net income increased from $5.5 billion in 2024 to $7.1 billion in 2025. Adobe also just reported record revenue of $6.4 billion in Q1 2026.
The challenges ahead
The $25 billion stock buyback announcement didn't move the needle because there are still plenty of challenges ahead for Adobe, which is why investors shouldn't buy the stock on that news alone.
The company is currently dealing with a leadership transition that it did not seem prepared for. After leading the company for 18 years, CEO Shantanu Narayen will step down when a successor has been found.
Anyone taking over is walking into a difficult situation. The new CEO will have to offer a strong vision that spotlights how the company will navigate and integrate AI more effectively. Whether that means offering a new playbook or slightly tweaking the game plan going forward remains to be seen.
For a software company, Adobe's forward price-to-earnings ratio of 10.4 looks attractive, but looking underneath the hood at all the challenges, it's easy to see why it's so cheap. A turnaround won't happen overnight, so for anyone betting on a turnaround, you're going to have to still give it some time.
Should you buy stock in Adobe right now?
Before you buy stock in Adobe, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Adobe wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $497,606!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,306,846!*
Now, it’s worth noting Stock Advisor’s total average return is 985% — a market-crushing outperformance compared to 200% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of April 30, 2026.
Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Adobe. The Motley Fool recommends the following options: long January 2028 $330 calls on Adobe and short January 2028 $340 calls on Adobe. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Should You Buy Adobe Stock After the Company's $25 Billion Share Repurchase Announcement?

Apple's CEOs, Intel & AI, and Another SaaSpocalype

The S&P 500 Index ($SPX) (SPY) on Monday closed up +0.12%, the Dow Jones Industrial Average ($DOWI) (DIA) closed down -0.13%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.01%. June E-mini S&P futures (ESM26) rose +0.14%, and June E-mini Nasdaq futures (NQM26) fell -0.02%.
Stock indexes settled mostly higher on Monday, with the S&P 500 and Nasdaq 100 posting new all-time highs. Optimism that demand for AI-infrastructure will remain strong and continue to power technology earnings boosted stocks on Monday. The megacap technology stocks of Alphabet, Apple, Amazon.com, Microsoft, and Meta Platforms all report quarterly earnings this week.
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The broader market saw some downward pressure from Monday’s +2% rally in WTI crude oil prices, which raised inflation expectations. Crude oil prices jumped after President Trump on Saturday canceled planned negotiations with Iran in Pakistan, saying Iran "offered a lot, but not enough" to continue negotiations. Iranian President Pezeshkian said Iran won't enter "imposed negotiations under threats or blockade." Secretary of State Rubio said Iran still wants to retain control of the Strait of Hormuz, and that was "unacceptable" to the US.
However, AI-infrastructure stocks found support on Monday after TF International Securities said that Qualcomm is working with OpenAI and Taiwan’s MediaTek to develop smartphone processors. Also, Micron Technology and SanDisk both received buy ratings from Melius Research. In addition, strength in health insurers was a positive factor for the market.
Stock indexes found support from the Axios report that Iran has given the US a new proposal to reopen the Strait of Hormuz and end the war, which includes postponing nuclear negotiations. The plan calls for extending the ceasefire so the parties can work toward a permanent end to the war, and nuclear talks would come later, only after a US blockade of the strait is lifted. The White House said Monday afternoon that President Trump is discussing the proposal with national security and foreign policy officials.
The US and Iran are locked in a battle for control of the Strait of Hormuz, with both sides blocking the waterway to gain leverage during an extended ceasefire. The US increased pressure on Iran with its naval blockade as it seeks to get Iran to agree to talks, while Israel and Lebanon are set to extend a ceasefire for three weeks.
WTI crude oil prices (CLM26) rose by more than +2% on Monday after President Trump canceled a planned weekend trip by US envoys to Pakistan and Iran said it won’t negotiate while the US naval blockade of Iran remains in force. The Strait of Hormuz remains essentially closed, threatening to deepen the global energy crisis. The ongoing blockade could exacerbate global oil and fuel shortages, as about a fifth of the world’s oil and liquefied natural gas transits through the strait. Goldman Sachs estimates that crude output in the Persian Gulf has been curtailed by about 14.5 million bpd, or more than 50%, so far in April, and that the current disruption has drawn down nearly 500 million bbl from global crude stockpiles, which could hit a billion bbl by June.
Kevin Warsh now appears to be on a glide path toward Senate approval as the new Fed Chair after Senator Thom Tillis said on Sunday that he dropped his opposition to the nomination. Mr. Tillis dropped his opposition after the US Justice Department dropped its criminal investigation into the Fed’s overspending on the renovation of its building, in line with Mr. Tillis’ demand. Mr. Tillis views the investigation into Fed Chair Powell as an attempt to force the Fed to cut interest rates. The Senate Banking Committee is due to vote on Mr. Warsh’s appointment this Wednesday and then send the nomination to the full Senate for a vote.
The markets are discounting a 0% chance for a +25 bp FOMC rate hike at the Tue-Wed policy meeting. The markets are expecting the FOMC to leave policy unchanged this week as it awaits further developments in oil prices and inflation.
Earnings season ramps up this week with several Magnificent Seven technology stocks reporting. Earnings results thus far have been supportive of stocks. As of Monday, 80% of the 139 S&P 500 companies that reported Q1 earnings have beaten estimates. Q1 S&P 500 earnings are projected to climb +12% y/y, according to Bloomberg Intelligence. Stripping out the technology sector, Q1 earnings are projected to increase around +3%, the weakest in two years.
Overseas stock markets settled mixed on Monday. The Euro Stoxx 50 closed down -0.39%. China's Shanghai Composite closed up +0.16%. Japan's Nikkei Stock 225 rallied to a new record high and closed up +1.38%.
Interest Rates
June 10-year T-notes (ZNM6) on Monday closed down -6 ticks. The 10-year T-note yield rose +3.6 bp to 4.337%. June T-notes retreated on Monday due to the +2% increase in the price of WTI crude oil, which boosts inflation expectations. The 10-year breakeven inflation rate rose to a 14-month high of 2.457% on Monday. Supply pressures also weighed on T-note prices, as the Treasury auctioned $69 billion of 2-year T-notes and $70 billion of 5-year T-notes.
Demand for Monday’s Treasury auctions was mixed. The 2-year T-note auction saw decent demand, with a bid-to-cover ratio of 2.65, above the 10-auction average of 2.60, while demand for the 5-year T-note auction was tepid, with a bid-to-cover ratio of 2.33, below the 10-auction average of 2.35.
European government bond yields moved higher on Monday. The 10-year German bund yield rose +3.9 bp to 3.033%. The 10-year UK gilt yield rose +6.0 bp to 4.972%.
The German May GfK consumer confidence index fell -5.2 to a 3.25-year low of -33.3, weaker than expectations of -30.0.
Swaps are discounting a 6% chance of a +25 bp ECB rate hike at its next policy meeting on Thursday.
US Stock Movers
Health insurance stocks rallied on Monday to provide support to the overall market. Centene (CNC) closed up more than +4%, and Elevance Health (ELV) and Humana (HUM) closed up more than +3%. Also, UnitedHealth Group (UNH) and the Cigna Group (CI) closed up more than +2%, and Cardinal Health (CAH) and Molina Healthcare (MOH) closed up more than +1%.
Airline stocks and cruise line operators fell on Monday after WTI crude oil rose more than +2%, which raises fuel costs and weighs on corporate profits. American Airlines Group (AAL) closed down more than -3%, and Alaska Air Group (ALK), Royal Caribbean Cruises Ltd (RCL), and Southwest Airlines (LUV) closed down more than -2%. Also, United Airlines Holdings (UAL), Carnival (CCL), and Norwegian Cruise Line Holdings Ltd (NCLH) closed down more than -1%, and Delta Air Lines (DAL) closed down -0.37%.
Chipmakers moved lower on Monday, weighing on the broader market. ARM Holdings Plc (ARM) closed down more than -8% to lead losers in the Nasdaq 100. Also, Advanced Micro Devices (AMD), Marvell Technology (MRVL), and Lam Research (LRCX) closed down more than -3%. In addition, Applied Materials (AMAT), Microchip Technology (MCHP), NXP Semiconductors NV (NXPI), KLA Corp (KLAC), and Texas Instruments (TXN) closed down more than -2%, and Analog Devices (ADI) and ASML Holding NV (ASML) closed down more than -1%.
Sandisk (SNDK) closed up more than +8% to lead gainers in the S&P 500 and Nasdaq 100, and Micron Technology (MU) closed up more than +5% after Melius Research LLC initiated coverage on the stocks with buy recommendations.
Stanley Black & Decker (SWK) closed up more than +4% after its board authorized a $500 million stock buyback program.
Verizon Communications (VZ) closed up more than +1% to lead gainers in the Dow Jones Industrials after boosting its full-year adjusted EPS forecast to $4.95-$4.99 from a previous forecast of $4.90-$4.95, stronger than the consensus of $4.90.
Fortinet (FTNT) closed up more than +1% after Arete double-upgraded the stock to buy from sell with a price target of $104.
Crowdstrike Holdings (CRWD) closed up more than +1% after Mizuho Securities upgraded the stock to outperform from neutral with a price target of $520.
VeraDermics (MANE) closed up more than +46% after reporting that its oral extended-release minoxidil formulation VDPHL01 met all primary and key secondary endpoints with high statistical significance in a Phase 2/3 clinical trial for male pattern baldness.
Organon & Co. (OGN) closed up more than +16% after Sun Pharmaceutical Industries Ltd. had lined up a short-term loan to finance its $12 billion acquisition of the company.
Oruka Therapeutics (ORKA) closed up more than +10% after giving positive results from a mid-stage trial of its therapy to treat plaque psoriasis.
Domino’s Pizza (DPZ) closed down more than -8% to lead losers in the S&P 500 after reporting Q1 revenue of $1.15 billion, below the consensus of $1.16 billion.
GE Vernova (GEV) closed down more than -2% after BNP Paribas downgraded the stock to neutral from buy.
Adobe (ADBE) closed down more than -2% after Mizuho Securities downgraded the stock to neutral from outperform.
Earnings Reports(4/28/2026)
Allegion plc (ALLE), American Tower Corp (AMT), Arch Capital Group Ltd (ACGL), Avery Dennison Corp (AVY), Booking Holdings Inc (BKNG), BXP Inc (BXP), Centene Corp (CNC), CMS Energy Corp (CMS), Coca-Cola Co/The (KO), Corning Inc (GLW), CoStar Group Inc (CSGP), Ecolab Inc (ECL), Edison International (EIX), Equity Residential (EQR), Essex Property Trust Inc (ESS), Expand Energy Corp (EXE), Extra Space Storage Inc (EXR), F5 Inc (FFIV), Fair Isaac Corp (FICO), FirstEnergy Corp (FE), Franklin Resources Inc (BEN), General Motors Co (GM), Hilton Worldwide Holdings Inc (HLT), Incyte Corp (INCY), Ingersoll Rand Inc (IR), Invesco Ltd (IVZ), Kimberly-Clark Corp (KMB), Mondelez International Inc (MDLZ), NXP Semiconductors NV (NXPI), Omnicom Group Inc (OMC), ONEOK Inc (OKE), PACCAR Inc (PCAR), Pentair PLC (PNR), PPG Industries Inc (PPG), Robinhood Markets Inc (HOOD), S&P Global Inc (SPGI), Seagate Technology Holdings PL (STX), Sherwin-Williams Co/The (SHW), Starbucks Corp (SBUX), Sysco Corp (SYY), Teradyne Inc (TER), T-Mobile US Inc (TMUS), United Parcel Service Inc (UPS), Veralto Corp (VLTO), Visa Inc (V), Waste Management Inc (WM), Welltower Inc (WELL), Xylem Inc/NY (XYL), Zimmer Biomet Holdings Inc (ZBH).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Tech Earnings Optimism Powers Stocks Higher

The S&P 500 Index ($SPX) (SPY) today is down -0.12%, the Dow Jones Industrial Average ($DOWI) (DIA) is down -0.14%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.30%. June E-mini S&P futures (ESM26) are down -0.14%, and June E-mini Nasdaq futures (NQM26) are down -0.33%.
Stock indexes are seeing some downward pressure today from today’s +2% rally in WTI crude oil prices. Crude oil prices jumped after President Trump on Saturday canceled planned negotiations with Iran in Pakistan, saying Iran "offered a lot, but not enough" to continue negotiations. Iranian President Pezeshkian said Iran won't enter "imposed negotiations under threats or blockade."
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However, chip stocks and AI-infrastructure stocks are seeing support after TF International Securities said that Qualcomm is working with OpenAI and Taiwan’s MediaTek to develop smartphone processors. Also, Micron Technology and SanDisk both received buy ratings from Melius Research.
Stock indexes are seeing some support from the Axios report that Iran has given the US a new proposal to reopen the Strait of Hormuz and end the war, which includes postponing nuclear negotiations. The plan calls for extending the ceasefire so the parties can work toward a permanent end to the war, and nuclear talks would come later, only after a US blockade of the strait is lifted. President Trump plans to meet today with national security and foreign policy officials to discuss the proposal.
The US and Iran are locked in a battle for control of the Strait of Hormuz, with both sides blocking the waterway to gain leverage during an extended ceasefire. The US increased pressure on Iran with its naval blockade as it seeks to get Iran to agree to talks, while Israel and Lebanon are set to extend a ceasefire for three weeks.
WTI crude oil prices (CLM26) are up by more than +2% today after President Trump canceled a planned weekend trip by US envoys to Pakistan and Iran said it won’t negotiate while the US naval blockade of Iran remains in force. The Strait of Hormuz remains essentially closed, threatening to deepen the global energy crisis. The ongoing blockade could exacerbate global oil and fuel shortages, as about a fifth of the world’s oil and liquefied natural gas transits through the strait. Goldman Sachs estimates that crude output in the Persian Gulf has been curtailed by about 14.5 million bpd, or more than 50%, so far in April, and that the current disruption has drawn down nearly 500 million bbl from global crude stockpiles, which could hit a billion bbl by June.
Kevin Warsh now appears to be on a glide path toward Senate approval as the new Fed Chair after Senator Thom Tillis said on Sunday that he dropped his opposition to the nomination. Mr. Tillis dropped his opposition after the US Justice Department dropped its criminal investigation into the Fed’s overspending on the renovation of its building, in line with Mr. Tillis’ demand. Mr. Tillis views the investigation into Fed Chair Powell as an attempt to force the Fed to cut interest rates. The Senate Banking Committee is due to vote on Mr. Warsh’s appointment this Wednesday and then send the nomination to the full Senate for a vote.
The markets are discounting a 0% chance for a +25 bp FOMC rate hike at the Tue-Wed policy meeting. The markets are expecting the FOMC to leave policy unchanged this week as it awaits further developments in oil prices and inflation.
Earnings season ramps up this week with several Magnificent Seven technology stocks reporting. Earnings results thus far have been supportive of stocks. As of today, 80% of the 139 S&P 500 companies that reported Q1 earnings have beaten estimates. Q1 S&P 500 earnings are projected to climb +12% y/y, according to Bloomberg Intelligence. Stripping out the technology sector, Q1 earnings are projected to increase around +3%, the weakest in two years.
Overseas stock markets are mixed today. The Euro Stoxx 50 is down -0.18%. China's Shanghai Composite closed up +0.16%. Japan's Nikkei Stock 225 rallied to a new record high and closed up +1.38%.
Interest Rates
June 10-year T-notes (ZNM6) today are down -4 ticks. The 10-year T-note yield is up +2.9 bp to 4.330%. June T-notes are moving lower today due to the +2% increase in the price of WTI crude oil, which boosts inflation expectations. The 10-year breakeven inflation rate rose to a 14-month high of 2.457% today. Supply pressures are also weighing on T-note prices, as the Treasury will auction $213 billion of T-notes and floating-rate notes this week, beginning with today’s auction of $69 billion of 2-year T-notes and $70 billion of 5-year T-notes.
European government bond yields are moving higher today. The 10-year German bund yield is up +2.7 bp to 3.020%. The 10-year UK gilt yield is up +4.1 bp to 4.953%.
The German May GfK consumer confidence index fell -5.2 to a 3.25-year low of -33.3, weaker than expectations of -30.0.
Swaps are discounting a 5% chance of a +25 bp ECB rate hike at its next policy meeting on Thursday.
US Stock Movers
Airline stocks and cruise line operators are falling today as WTI crude oil is up more than +2%, which raises fuel costs and weighs on corporate profits. Southwest Airlines (LUV), Royal Caribbean Cruises Ltd (RCL), and Carnival (CCL) are down more than -2%, and American Airlines Group (AAL), United Airlines Holdings (UAL), Norwegian Cruise Line Holdings Ltd (NCLH), and Alaska Air Group (ALK) are down more than -1%. Also, Delta Air Lines (DAL) is down -0.26%.
Chipmakers are sliding today, weighing on the broader market. Applied Materials (AMAT) and Lam Research (LRCX) are down more than -4%, and Advanced Micro Devices (AMD), Microchip Technology (MCHP), and NXP Semiconductors NV (NXPI) are down more than -3%. Also, KLA Corp (KLAC), Analog Devices (ADI), and Texas Instruments (TXN) are down more than -2%.
Domino’s Pizza (DPZ) is down more than -9% to lead losers in the S&P 500 after reporting Q1 revenue of $1.15 billion, below the consensus of $1.16 billion.
GE Vernova (GEV) is down more than -3% after BNP Paribas downgraded the stock to neutral from buy.
Adobe (ADBE) is down more than -1% after Mizuho Securities downgraded the stock to neutral from outperform.
Sandisk (SNDK) is up more than +5% to lead gainers in the S&P 500 and Nasdaq 100 and Micron Technology (MU) is up more than +4% after Melius Research LLC initiated coverage on the stocks with buy recommendations.
Verizon Communications (VZ) is up more than +3% to lead gainers in the Dow Jones Industrials after boosting its full-year adjusted EPS forecast to $4.95-$4.99 from a previous forecast of $4.90-$4.95, stronger than the consensus of $4.90.
Fortinet (FTNT) is up more than +2% after Arete double-upgraded the stock to buy from sell with a price target of $104.
Crowdstrike Holdings (CRWD) is up more than +1% after Mizuho Securities upgraded the stock to outperform from neutral with a price target of $520.
VeraDermics (MANE) is up more than +36% after reporting that its oral extended-release minoxidil formulation VDPHL01 met all primary and key secondary endpoints with high statistical significance in a Phase 2/3 clinical trial for male pattern baldness.
Oruka Therapeutics (ORKA) is up more than +19% after giving positive results from a mid-stage trial of its therapy to treat plaque psoriasis.
Organon & Co. (OGN) is up more than +16% after Sun Pharmaceutical Industries Ltd has lined up a short-term loan to finance its $12 billion acquisition of the company.
Earnings Reports(4/27/2026)
Alexandria Real Estate Equities (ARE), Amkor Technology Inc (AMKR), AvalonBay Communities Inc (AVB), Brixmor Property Group Inc (BRX), Brown & Brown Inc (BRO), Cadence Design Systems Inc (CDNS), Cincinnati Financial Corp (CINF), Crane Co (CR), Crown Holdings Inc (CCK), Domino's Pizza Inc (DPZ), Kilroy Realty Corp (KRC), NOV Inc (NOV), Nucor Corp (NUE), Public Storage (PSA), Simpson Manufacturing Co Inc (SSD), Sun Communities Inc (SUI), Universal Health Services Inc (UHS), Ventas Inc (VTR), Verizon Communications Inc (VZ).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Stocks Slip as Higher Oil Prices Spur Inflation Concerns

The S&P 500 Index ($SPX) (SPY) today is unchanged, the Dow Jones Industrial Average ($DOWI) (DIA) is up +0.09%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.10%. June E-mini S&P futures (ESM26) are down -0.02%, and June E-mini Nasdaq futures (NQM26) are down -0.25%.
Stock indexes are seeing some downward pressure today from today’s +2% rally in WTI crude oil prices. However, chip stocks are seeing support after Qualcomm rallied more than +3% on a report by TF International Securities that Qualcomm is working with OpenAI and Taiwan’s MediaTek to develop smartphone processors.
Join 200K+ Subscribers: Find out why the midday Barchart Brief newsletter is a must-read for thousands daily.
Stocks are under some pressure today as crude oil prices jumped after President Trump on Saturday canceled planned negotiations with Iran in Pakistan, saying Iran "offered a lot, but not enough" to continue negotiations. Iranian President Pezeshkian said Iran won't enter "imposed negotiations under threats or blockade."
However, stock indexes are seeing support from the Axios report that Iran has given the US a new proposal to reopen the Strait of Hormuz and end the war, which includes postponing nuclear negotiations. The plan calls for extending the ceasefire so the parties can work toward a permanent end to the war, and nuclear talks would come later, only after a US blockade of the strait is lifted. President Trump plans to hold a meeting today with national security and foreign policy officials to discuss the proposal.
The US and Iran are locked in a battle for control of the Strait of Hormuz, with both sides blocking the waterway to gain leverage during an extended ceasefire. The US increased pressure on Iran with its naval blockade as it seeks to get Iran to agree to talks, while Israel and Lebanon are set to extend a ceasefire for three weeks.
WTI crude oil prices (CLM26) are up by more than +2% today after President Trump canceled a planned weekend trip by US envoys to Pakistan and Iran said it won’t negotiate while the US naval blockade of Iran remains in force. The Strait of Hormuz remains essentially closed, threatening to deepen the global energy crisis. The ongoing blockade could exacerbate global oil and fuel shortages, as about a fifth of the world’s oil and liquefied natural gas transits through the strait. Goldman Sachs estimates that crude output in the Persian Gulf has been curtailed by about 14.5 million bpd, or more than 50%, so far in April, and that the current disruption has drawn down nearly 500 million bbl from global crude stockpiles, which could hit a billion bbl by June.
Kevin Warsh now appears to be on a glide path toward Senate approval as the new Fed Chair after Senator Thom Tillis said on Sunday that he dropped his opposition to the nomination. Mr. Tillis dropped his opposition after the US Justice Department dropped its criminal investigation into the Fed’s overspending on the renovation of its building, in line with Mr. Tillis’ demand. Mr. Tillis views the investigation into Fed Chair Powell as an attempt to force the Fed to cut interest rates. The Senate Banking Committee is due to vote on Mr. Warsh’s appointment this Wednesday and then send the nomination to the full Senate for a vote.
The markets are discounting a 0% chance for a +25 bp FOMC rate hike at the Tue-Wed policy meeting. The markets are expecting the FOMC to leave policy unchanged this week as it awaits further developments in oil prices and inflation.
Earnings season ramps up this week with several Magnificent Seven technology stocks reporting. Earnings results thus far have been supportive of stocks. As of today, 80% of the 139 S&P 500 companies that reported Q1 earnings have beaten estimates. Q1 S&P 500 earnings are projected to climb +12% y/y, according to Bloomberg Intelligence. Stripping out the technology sector, Q1 earnings are projected to increase around +3%, the weakest in two years.
Overseas stock markets are higher today. The Euro Stoxx 50 is up +0.53%. China's Shanghai Composite closed up +0.16%. Japan's Nikkei Stock 225 rallied to a new record high and closed up +1.38%.
Interest Rates
June 10-year T-notes (ZNM6) today are down -3 ticks. The 10-year T-note yield is up +2.0 bp to 4.321%. June T-notes are slightly lower today due to the +2% increase in the price of WTI crude oil, which boosts inflation expectations. Supply pressures are also weighing on T-note prices, as the Treasury will auction $213 billion of T-notes and floating-rate notes this week, beginning with today’s auction of $69 billion of 2-year T-notes and $70 billion of 5-year T-notes.
European government bond yields are moving higher today. The 10-year German bund yield is up +0.9 bp to 3.003%. The 10-year UK gilt yield is up +1.1 bp to 4.923%.
The German May GfK consumer confidence index fell -5.2 to a 3.25-year low of -33.3, weaker than expectations of -30.0.
Swaps are discounting a 5% chance of a +25 bp ECB rate hike at its next policy meeting on Thursday.
US Stock Movers
The Magnificent Seven stocks are mixed today, with key movers posting losses of more than -1%, including Apple (AAPL), Microsoft (MSFT), and Tesla (TSLA).
Microsoft said today that it will stop paying revenue to OpenAI and that its partnership with OpenAI will no longer be its exclusive AI partnership. Microsoft holds a 27% ownership stake in OpenAI.
Qualcomm (QCOM) is up more than +3% to boost chip stocks after TF International Securities said OpenAI is working with the company and Taiwan’s MediaTek to develop smartphone processors.
Micron Technology (MU) is up more than +5% Melius Research LLC initiated coverage on the stock with a buy recommendation.
Crowdstrike Holdings (CRWD) is up more than +1% after Mizuho Securities upgraded the stock to outperform from neutral with a price target of $520.
Verizon Communications (VZ) is up more than +3% after boosting its full-year adjusted EPS forecast to $4.95-$4.99 from a previous forecast of $4.90-$4.95, stronger than the consensus of $4.90.
Domino’s Pizza (DPZ) is down more than -10% after reporting Q1 revenue of $1.15 billion, below the consensus of $1.16 billion.
The Campbell’s Company (CPB) is trading slightly higher, despite Bernstein’s downgrade of the stock to market perform from outperform.
GE Vernova (GEV) is down more than -5% after BNP Paribas downgraded the stock to neutral from buy.
Adobe (ADBE) is down more than -1% after Mizuho Securities downgraded the stock to neutral from outperform.
Oruka Therapeutics (ORKA) is up more than +20% after giving positive results from a mid-stage trial of its therapy to treat plaque psoriasis.
Organon & Co. (OGN) is up more than +16% after Sun Pharmaceutical Industries Ltd has lined up a short-term loan to finance its $12 billion acquisition of the company.
VeraDermics (MANE) is up more than +20% after reporting that its oral extended-release minoxidil formulation VDPHL01 met all primary and key secondary endpoints with high statistical significance in a Phase 2/3 clinical trial for male pattern baldness.
Earnings Reports(4/27/2026)
Alexandria Real Estate Equities (ARE), Amkor Technology Inc (AMKR), AvalonBay Communities Inc (AVB), Brixmor Property Group Inc (BRX), Brown & Brown Inc (BRO), Cadence Design Systems Inc (CDNS), Cincinnati Financial Corp (CINF), Crane Co (CR), Crown Holdings Inc (CCK), Domino's Pizza Inc (DPZ), Kilroy Realty Corp (KRC), NOV Inc (NOV), Nucor Corp (NUE), Public Storage (PSA), Simpson Manufacturing Co Inc (SSD), Sun Communities Inc (SUI), Universal Health Services Inc (UHS), Ventas Inc (VTR), Verizon Communications Inc (VZ).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Stocks Pressured by Higher Oil Prices

Key Points
The software firm is fighting to remain relevant in the artificial intelligence (AI) era.
Adobe is also searching for a new CEO to lead it forward in the new environment.
Adobe (NASDAQ: ADBE) is fighting tooth and nail to remain relevant in the era of artificial intelligence (AI). Adobe makes digital design software products and systems and has been a celebrated Silicon Valley success since it was founded in San Jose, California, in 1982.
But the stock has been tumbling for more than two years on concerns that new AI applications will render the company's software obsolete or unnecessary. It's down 60% since January 2024 and 27% in 2026.
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Adobe is now in the middle of a leadership transition, looking for a new CEO to help defend the company against a wave of AI-based competitors. Shantanu Narayen has served as the company's CEO for 18 years and has led major product development initiatives, including Photoshop, Illustrator, Premiere Pro, and InDesign.
The company has also pursued partnerships to develop its own AI-based products, including a critical one with AI chipmaking giant Nvidia.
This week, Adobe announced a $25 billion stock repurchase program, under which it can buy back shares up to that amount through April 2030. Companies often buy back shares in order to signal confidence to shareholders and halt a stock's downward trajectory.
And that's part of management's strategy here. In the buyback press release, management wrote, "Our new $25 billion share repurchase authorization is a direct expression of confidence in our robust cash flow and the long-term value we are delivering to investors."
By reducing the number of outstanding shares, a buyback can also raise the stock price and increase earnings per share.
Shares rose on the buyback announcement
Will it work? Shares of Adobe rose 3.4% on Wednesday, April 22, the day after the buyback was announced. That's a positive. Yet this is the company's second stock buyback in two years. In March 2024, the company announced a $25 billion buyback that is now nearly complete. Today, the share price is significantly lower.
The next event to watch for with Adobe is its second-quarter financial results release, scheduled for June 11. While Adobe's revenue and profits have continued to grow at the same pace for a decade, the company will have to convince investors that it isn't as vulnerable to AI replacement as some believe. It will also need to show that it is actively developing a strategy (with new management in place) that makes it value-additive in an increasingly AI-centric software environment.
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Matthew Benjamin has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Adobe and Nvidia. The Motley Fool recommends the following options: long January 2028 $330 calls on Adobe and short January 2028 $340 calls on Adobe. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.