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Adobe CEO Shantanu Narayen speaks during an interview with CNBC on the floor at the New York Stock Exchange in New York City, Feb. 20, 2024.

Brendan Mcdermid | Reuters

Adobe shares fell 13% on Friday morning after the company reported first-quarter results that beat estimates but delivered a light quarterly revenue forecast.

The design software company posted adjusted earnings per share of $4.48, above the $4.38 analysts were expecting, according to LSEG, formerly known as Refinitiv. Its revenue of $5.18 billion exceeded the $5.14 billion analysts estimated.

For the current quarter, Adobe expects adjusted earnings per share of $4.35 to $4.40, while analysts were expecting $4.38. It said revenue will total $5.25 billion to $5.30 billion, slightly below the $5.31 billion estimated. The company also announced a $25 billion share buyback.

Adobe also recently launched an artificial intelligence assistant for its Reader and Acrobat applications that can help users digest information from long PDF documents.

Bank of America analysts lowered their price target for Adobe shares to $640 from $700 and reiterated their buy rating of the stock, expressing optimism about Firefly, the company’s generative AI image creation tool.

“No change to our view that Adobe is a major AI beneficiary,” the analysts wrote in an investor note Thursday. “While the monetization ramp is slower than anticipated, Firefly is one of the [most] widely used generative AI offerings, with potential for multiple paths to monetization.”

Barclays dropped its price target for shares of Adobe to $630 from $700 while maintaining an overweight rating for the stock. Its analysts wrote Friday that they expect the stock to recover and “would be buying this dip because pricing is masking the underlying strength in Creative Cloud.”

Analysts at Morgan Stanley kept their overweight rating and $660 price target on Adobe stock, writing Friday that “more patience is likely warranted.”

“A smaller than expected beat in Digital Media Net New ARR likely increases investor concerns around competitive pressures,” the analysts wrote. “However a growing number of vectors for monetizing GenAI and new monetizable solutions coming online in 2H24 should help improve the narrative going forward.”

— CNBC’s Jordan Novet contributed to this report.

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Microsoft enters portable gaming with new ROG Xbox Ally devices

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Microsoft enters portable gaming with new ROG Xbox Ally devices

Microsoft ROG Xbox Ally and Ally X Handheld devices

Source: Xbox

Microsoft Xbox players will soon be able to take their favorite games anywhere with the launch of the new ROG Xbox Ally handhelds.

This is a first for Xbox, which has never released a handheld before.

The devices, developed in collaboration with ASUS, offer a full-screen Xbox experience meant for portable play.

Players will be able to access Xbox games, stream content, and play on the go with built-in support for cloud gaming.

“Players can look forward to an approachable gaming experience that travels with you wherever you go, featuring several new and first-of-their kind features on both devices,” Microsoft said in a press release.

The announcement follows last week’s debut of Nintendo‘s flagship Switch 2 and sets the stage for a new chapter in portable gaming.

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Vantage raises $820 million in a first-of-its-kind cloud and AI data center deal in Europe

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Vantage raises 0 million in a first-of-its-kind cloud and AI data center deal in Europe

U.S. data center operator Vantage has raised 720 million euros ($821.4 million) — the first of its kind deal in Europe.

The asset-backed securitization (ABS) deal, the first ever euro-denominated with data center assets on the continent, involves four data centers in Germany.

The company said it will be paying on average a 4.3% coupon on the bonds issued through the process.

In an ABS, Vantage raises money by using its data center infrastructure and future revenues from the facilities as collateral.

Vantage said it will use the funds primarily to pay off existing construction loans previously secured for the facilities.

“We believe the ABS market in particular is kind of best suited for our type of asset, which is real estate centric, high credit quality tenants, long term leases, something that is almost perfect for the ABS investor,” Sharif Metwalli, chief financial officer of Vantage Data Centers, told CNBC.

Vantage added that despite the large sum borrowed, the demand from investors exceeded the amount raised.

“So this transaction was actually pretty highly levered, frankly,” Rich Cosgray, senior vice president of global capital markets at Vantage Data Centers told CNBC. “It was higher leverage than our prior transaction and we had some investors that just weren’t comfortable at that leverage level.”

“Yet, despite that, we were basically two and four times oversubscribed on the respective financings, and we were able to tighten pricing pretty meaningfully through the marketing process,” Cosgray added.

The four facilities — two in Berlin and two in Frankfurt — have access to around 55 megawatts of power and “are fully leased to hyperscale customers,” the company said in a statement. The four facilities were valued at more than $1 billion earlier this year.

Last year, Vantage also raised £600 million through the first-ever securitization of a data center in Europe, the Middle East and Asia (EMEA). The deal involved two units from the company’s Cardiff campus with 148 megawatts of electricity power. Across the region, the company has 2,500 megawatts of data center capacity either operational or under development.

The transaction was led by Barclays Bank and Deutsche Bank as joint lead managers and Vantage was represented by the British law firm Clifford Chance.

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IonQ buys UK quantum startup Oxford Ionics for more than $1 billion

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IonQ buys UK quantum startup Oxford Ionics for more than  billion

Cheng Xin | Getty Images

IonQ is buying United Kingdom-based quantum computing startup Oxford Ionics in a deal valued at nearly $1.1 billion.

Shares gained about 4%.

The companies said in a release that the deal will combine IonQ’s quantum computing hardware and software knowledge with Oxford Ionics’ semiconductor chip technologies. The company aims to deliver breakthroughs in the field and capitalize on growing revenue opportunities.

“We believe the advantages of our combined technologies will set a new standard within quantum computing and deliver superior value for our customers through market-leading enterprise applications,” said IonQ CEO Niccolo De Masi in a release.

The deal, which is expected to close this year, includes $1.065 billion worth of IonQ shares and about $10 million in cash. The merged company expects to build systems with 256 qubits by 2026, over 10,000 by 2027 and 2 million by 2030.

Interest in quantum computing has skyrocketed in recent months after technology giants Microsoft and Alphabet announced new chip breakthroughs. Experts tout the technology’s ability to solve intricate computing tasks unachievable by other computers.

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IonQ’s CEO previously told CNBC that he wants the company to become the “800-pound gorilla” in the quantum world.

Shares of Maryland-based company, which went public through a special purpose acquisition company in late 2021, are down about 6% year to date. The stock has soared more than 400% from a year ago.

WATCH: IonQ CEO on earnings: Leading the world in ‘the quantum internet’

IonQ CEO on earnings: Leading the world in 'the quantum internet'

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