Adobe (ADBE) shares are jumping premarket trading after the software maker reported higher-than-forecast results and lifted its outlook on strong demand for its artificial intelligence (AI) products; Tesla (TSLA) shares are gaining after the electric vehicle (EV) maker gave CEO Elon Musk a huge win, reapproving his $56 billion compensation package and the company's plan to reincorporate in Texas; a federal judge reportedly is unlikely to approve a proposed settlement that would lower the swipe fees merchants pay Visa (V), Mastercard (MA), and others to complete credit card transactions; Stellantis (STLA) moves some EV production out of China due to forthcoming European Union (EU) tariffs; and RH (RH) shares are sliding after the upscale furniture retailer posted a first-quarter loss that was wider than analysts’ forecasts and issued a downbeat second-quarter sales outlook. U.S. stock futures are falling after the Nasdaq and S&P 500 posted their fourth record close in a row Thursday. Here’s what investors need to know today.
1. Adobe Jumps on AI-Powered Earnings Beat, Guidance Lift
Adobe (ADBE) shares are jumping about 14% in premarket trading after the software maker posted higher-than-forecast results and raised its full-year earnings and sales guidance amid robust demand for its suite of generative artificial intelligence (AI) digital media products. Adobe said it’s seeing Creative Cloud subscribers upgrade their plans to access Firefly, the company’s generative AI model. Adobe Chief Executive Officer (CEO) Shantanu Narayen told analysts on Thursday that the company hadn’t seen any noticeable changes to the economy, in contrast to many of the Photoshop maker’s rivals that have trimmed their full-year guidance over an uncertain economic outlook and softening enterprise interest in AI development.
2. Tesla Gains After Shareholders Approve Musk's $56B Pay Package, Texas Move
Tesla (TSLA) shares are rising 1.3% in premarket trading after the EV maker’s shareholders voted to reapprove Elon Musk’s $56 billion compensation package Thursday, a huge win for the company’s CEO. The controversial pay proposal for Tesla’s longtime chief executive was approved as a resolution, which could help the board in its battle against the court order that struck down the compensation plan in 2018. Also given the green light by shareholders was a resolution to move the company's incorporation to Texas from Delaware. Norway’s $1.7 trillion sovereign wealth fund, which owns 31.57 million Tesla shares, and the California Public Employees' Retirement System (CalPERS), which holds 9.5 million shares, both came out in opposition to the compensation package.
3. Visa, Mastercard Swipe-Fees Settlement Unlikely to Be Approved
A federal judge said she was unlikely to approve a proposed settlement that would lower the interchange, or swipe, fees businesses pay Visa (V), Mastercard (MA), and others to complete credit card transactions, according to multiple reports. “The Court will issue a written decision, but informed the parties that it will likely not approve the Settlement,” a filing Thursday in federal court in Brooklyn said, according to The Wall Street Journal. U.S. merchants say the deal would have saved them at least $30 billion over five years, Bloomberg reported. The settlement would have lowered the swipe fees and capped them from being raised until 2030. Estimates put Visa, Mastercard, and Discover Financial's (DFS) swipe fees around 2% of purchase price, on average. Visa, Mastercard and Discover shares are down less than 1% in premarket trading.
4. Stellantis Drops as Jeep Owner to Move Some Chinese EV Production to Europe
Shares of Stellantis (STLA) are falling about 3% in premarket trading after the automaker said it will move production of some Chinese-made EVs to Europe on Thursday, a day after the European Union (EU) said it would impose extra tariffs of up to 38.1% on imported Chinese electric vehicles. Europe’s move comes a month after the U.S. announced plans to raise tariffs on Chinese EV imports to 100% from 25% this year. The company behind the Fiat and Jeep brands shifted its production plans for EVs made with Chinese joint-venture partner Leapmotor because of higher European import duties, Stellantis CEO Carlos Tavares said, according to a FactSet transcript of the company's investor meeting cited by The Wall Street Journal.
5. RH Slumps on Earnings Miss, Downbeat Outlook
Shares of RH (RH) are sliding 12% in premarket trading after the upscale furniture retailer posted a first-quarter loss that was wider than analysts’ forecasts and issued a downbeat second-quarter sales outlook. The company, formerly known as Restoration Hardware, reported a quarterly loss of $3.6 million after registering a profit of $41.9 million in the same period last year. “We do expect the constantly changing outlook regarding monetary policy will continue to weigh on the housing market through the second half of 2024 and possibly into 2025,” CEO Gary Friedman said.