Happy Friday afternoon to everyone on The Street. Here's a snapshot of where markets ended the trading session, plus tomorrow's trade idea delivered to you today.

• 🟨 | US stocks were mixed on Friday. The Dow made a small 0.1% gain, marking a weekly rally following the Fed’s first major interest rate easing in four years, while the S&P 500 and Nasdaq fell slightly, losing 0.2% and 0.4%, respectively.

• 📈 | One Notable Gainer: Constellation Energy shares jumped 22% after announcing plans to restart the Three Mile Island nuclear plant and sell power to Microsoft under a 20-year agreement to supply its data centers.

• 📉 | One Notable Decliner: FedEx shares fell 15% after a sharp earnings drop, with the company lowering its full-year revenue forecast due to weaker-than-expected industrial demand.

• 🎨 | Tomorrow's Trade: A ‘Creative’ AI Play. Scroll down for more.

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MARKET MOVERS

Nike, Novo Nordisk, Vistra

NKE (+7%) Nike stock pops after retailer names former executive Elliott Hill as CEO (Yahoo Finance)

NVO (-5%) Novo Nordisk Stock Declines After Headline Results From Mid-Stage Study Of Monlunabant In Obese Patients (Benzinga)

VST (+17%) Vistra to Acquire Full Equity Interests of Vistra Vision: Time to Buy? (Zacks)

DJT (-8%) Trump Media slides to new low as lock-up expires (Reuters)

ASML (-4%) ASML: share price falls, Morgan Stanley sees end of cycle (Market Screener)

OVERHEARD ON THE STREET

WSJ: Warner Music increases layoffs to 13% of its workforce, cutting 750 jobs as part of a restructuring plan to boost its recorded-music business.

Bloomberg: Coca-Cola plans to invest $1 billion in Nigeria over five years, boosting businesses in its value chain amid reforms by President Tinubu's government.

Reuters: GM is recalling 449,671 trucks and SUVs, including 2023 Chevrolet Silverado and GMC Sierra, due to a brake fluid warning light issue.

TechCrunch: The iPhone 16 launched today, missing its promised AI features, marking a significant turning point for Apple in the competitive landscape.

The Verge: Microsoft has launched a Windows app for iPhones, Macs, and Android, serving as a hub to stream Windows from multiple sources.

TOMORROW’S TRADE IDEA, TODAY

A ‘Creative’ AI Play

Creative-Cloud-y Outlook

There have been many beneficiaries of the AI boom. But Adobe (ADBE) isn’t one of them — at least not lately.

The stock is down nearly 7% over the past month following disappointing guidance from its leadership. But according to Barron’s, that has created a potential buying opportunity, making the one-time AI leader an under-the-radar AI play.

More Than Meets the Eye

Adobe beat expectations for both earnings and sales when it handed in its Q3 report card. But the stock still dropped when the company unveiled that Q4 net new annual recurring revenue growth is expected to come in lower than usual.

That said, historically, Adobe has kept its guidance fairly conservative. This keeps analyst estimates at reasonable levels, and is likely a big part of why the company has missed sales expectations just once over the past twenty quarters. 

Additionally, a few deals that were expected to close in Q4 ended up closing in Q3 instead. For that reason, the company stated that, while the numbers for the second half of the year are skewed toward Q3, it is still on track to meet its overall goals.

Trading at a Discount

Q3 revenue was up 10.6% year-over-year after Adobe raised prices to account for its Creative Cloud product’s new AI capabilities. Profit and operating margins were up as well, despite marketing and R&D spending. 

The stock is trading at around 25.5x 12-month forward earnings estimates, well below its five-year average of 33. It is also lower than the average multiple for companies held in the iShares Expanded Tech-Software Sector ETF. 

In other words, the stock is cheaper than its peers — but, according to Barron’s, the reason for the discount just doesn’t hold water.

TOGETHER WITH INVESTORS ALLEY

This new income loophole could pay your bills every month

There's a new way to collect huge monthly income in retirement called Big-Tech's secret dividend. But thanks to a brand new loophole... Tech titans like Apple, Microsoft, and Nvidia can now pay you huge dividend yields up to 12%! It's the best income opportunity I've ever seen, and yet NOBODY seems to know about it. That changes today with my brand new special report.

Grab your FREE copy here.

ON OUR RADAR

AP: The U.S. awards over $3 billion for EV battery production in 14 states, aiming to reduce China's dominance in the global battery market.

Axios: Retail's holiday season begins in October, featuring Walmart's sales starting Oct. 8, Amazon's Prime Day on Oct. 8-9, and early promotions as online shopping rises.

QZ: Elon Musk urged the FAA to focus on Boeing's Starliner issues instead of penalizing SpaceX after the Starliner's risky crewless return.

Axios: Bonobos founder Andy Dunn, who sold his company for over $300 million, is tackling adult loneliness with his friendship app, Pie.

QZ: Walmart will launch a pay-by-bank system in 2025, allowing online shoppers to pay directly from their bank accounts to reduce fees.

YESTERDAY’S POLL RESULTS

Are you bullish or bearish on debt securities over the next 12 months?

🟨🟨🟨🟨🟨⬜️ 🐂 Bullish

🟩🟩🟩🟩🟩🟩 🐻 Bearish