The quarterly earnings report for Adobe (ADBE) was released on Thursday and showed a strong first quarter for the company.

Adobe’s CEO Shantanu Narayen said that the company has done very well recently with its Experience Cloud, Document Cloud, and Creative Cloud software. By using generative AI programs, the company has managed to innovate in most of its products and make them more compelling and functional.

The company released its quarterly earnings report as well and showed that it earned $5.18 billion for the first fiscal quarter of 2024. That shows an 11% growth from last year at this time.

However, the company had a softer outlook for the current fiscal quarter. They projected $5.28 billion in earnings for the current quarter, which is an adjustment from what they had previously anticipated- $5.31 billion.

Traders took the adjustment hard and started selling Adobe stock, bringing the price down by 12% by the end of trading on Thursday. This stock that has been trading around $560 per share for the last month is now down to $501 per share.

It will be very difficult for Adobe to recover from this drop during the current fiscal quarter. The company may be facing stiff competition from other AI-focused companies, like OpenAI’s Sora program. Even though the stock market loves AI stocks right now, there are so many companies competing for the market niche that some of them will inevitably suffer damage from this tech war.

Market Recap

The Dow Jones fell 0.35% yesterday before trading closed off, followed by the Nasdaq Composite, which was down 0.30%. The S&P 500 rounds out the top three indices with a 0.29% drop.

One of the biggest losers for the markets on Thursday was C3is, a ship transport company. They announced on Friday that they would be  paying off massive debt incurred in the purchase of an Aframax tanker, on which they still owe $38.7 million. Last year, the company was given notice by Nasdaq that they were in violation of keeping their stock price at a minimum of $1 per share.