Adobe Becomes Latest Stock to Enjoy AI Boost

Major U.S. equities indexes were mixed and little changed to close out an eventful week for the markets.

The most recent Michigan Consumer Sentiment Index (MCSI) report showed perceptions of the economy dropped to a seven-month low in June, even as inflation shows signs of abating, pressuring stocks in Friday’s session.

The S&P 500 ticked less than 0.1% lower, closing in negative territory for the first time this week following a four-day streak of record closing highs, while the Dow was down 0.2%. The Nasdaq edged 0.1% higher, extending its record-setting streak to five sessions as artificial intelligence (AI) enthusiasm once again lifted the tech sector.

Shares of cruise lines sank after Bank of America analysts reported a slight decline in pricing for ocean cruises. Norwegian Cruise Line Holdings (NCLH) shares suffered the steepest losses of any S&P 500 component, dropping 7.5%. Shares of fellow cruise operator Carnival Corp. (CCL) fell 7.1%, while shares of rival Royal Caribbean Cruises (RCL) lost 4.4%.

Shares of First Solar (FSLR) slipped 6.2%. Although analysts at Zacks recently boosted their quarterly earnings estimates for the solar cell manufacturer, the Fed’s more muted rate-cut forecasts released earlier this week could be weighing on the stock, as solar projects tend to accelerate when borrowing costs move lower. First Solar also faces challenges related to high operating costs.

Align Technologies (ALGN) shares declined 5.6% after the manufacturer of orthodontic treatment devices reported its second-quarter financial results. Although the company reported revenue and earnings growth, Align issued underwhelming guidance, reflecting an uncertain outlook for China’s consumer market.

Adobe (ADBE) shares skyrocketed 14.5%, notching the strongest gains of any stock in the S&P 500, after the software maker posted better-than-expected quarterly sales and profits and boosted its full-year guidance. The maker of Photoshop and other media software noted robust demand for its suite of generative artificial intelligence (AI) products helped drive the strong performance. Adobe’s beat-and-raise report appeared to ease concerns that generative AI technology could infringe on its sales.

Shares of toymaker Hasbro (HAS) jumped 6.0% after Bank of America upgraded the stock to “buy” and boosted its price target. The analysts cited several reasons for bullishness on Hasbro, including the strength of Monopoly Go! and its digital gaming strategy as well as a positive outlook for its Magic: The Gathering card business.

Broadcom (AVGO) shares were up 3.3% on Friday, adding to the massive gains posted in the previous session after the chipmaker beat quarterly revenue estimates, lifted its sales forecasts, and announced a 10-for-1 stock split effective on July 15. The company highlighted that revenue from AI products reached a record level of $3.1 billion during the quarter. Including Friday’s gains, Broadcom stock popped nearly 23% this week.