Hey Income Traders,

Adobe (ADBE) lost 25 percent of its value in 2024.

The S&P 500 gained roughly the same amount.

That is a 50 percentage point gap between a supposed blue chip and the broader market!

Meanwhile, everyone still treats these legacy software names like safe havens.

They are not.

The AI revolution is not lifting all boats. It is sinking the ones that cannot row fast enough.

Adobe now sits in the bottom 10 percent of its sector with a trailing 12 month return of negative 36 percent.

Microsoft (MSFT) returned just nine percent over the past year while Alphabet (GOOGL) returned 75 percent.

Both invested billions in AI.

Both had the resources and talent.

But one executed and one stumbled.

When the CEO Admits the Product Does Not Work

The difference shows up in the products.

Microsoft CEO Satya Nadella recently told internal managers that Copilot integrations do not really work.

When the CEO admits the flagship AI product is underperforming, investors should pay attention.

IT buyers at Microsoft’s own Ignite conference reported customers wanting to reduce Copilot licenses from 300 to zero.

At 30 dollars per user per month, the value proposition is not landing.

This pattern is not new.

Kodak dominated photography.

Blockbuster dominated video rental.

Nokia dominated mobile phones.

Each company had resources, brand recognition, and market share.

None of it mattered when the disruption arrived.

The disrupted always look safe until they are not.

What the Smart Money Watches

Stop assuming legacy tech names are automatically safe. Watch execution, not reputation.

Track Copilot adoption numbers.

Monitor Adobe’s AI revenue contribution.

Compare competitive positioning quarter over quarter.

The clock is ticking louder than most investors realize. The disrupted always have time until they do not.

Tick. Tok.

May the income be with you,

Hans