Reinvention, Relevance, Growth 

Each year, we review corporate earnings reports from across regions, sectors, and sizes, distilling the learnings, strategies, guidance, and big bets into key themes for industry leaders. Giving a sense of what the last year might shape for the landscape ahead.

Which, with 331 S&P 500 companies citing “AI” during earnings calls conducted between December 15 and March 11, 2026—up from 241 in the same period last year—it’s no surprise that AI is taking up a lot of visible horizon.

Let’s get into it.

1. AI: From Building Block to Growth Engine

2025 saw unprecedented investments from those leading the AI charge. $400B+ of total AI-related capex spending from the “Magnificent 7” alone. But, with major investment comes the need to prove ROI. Questions continue to circulate across industries: How long will this take? What will make the payoff worth it? Are we doing enough?

At Davos, Uber’s CEO Dara Khosrowshahi claimed many companies are “play-acting” with AI, saying the right words without fundamentally changing how their operations function. The difference is visible between companies that added AI to existing systems versus those that rebuilt their processes around it.

First came the infrastructure. The AI data center buildout created a rising tide for anyone positioned to supply it—right place, right time, mixed with speed to market and operational efficiency. Corning’s optical segment surged 35% to $6.3B. Celestica’s Connectivity & Cloud Solutions segment grew by 64%. Caterpillar’s power generation sales jumped 44% in Q4. Vertiv surpassed $10B, a 26% increase from 2024.

Other companies have been weaving AI into the core of how they work. Duolingo used AI to launch 148 new courses in under a year. Walmart’s “Trend-to-Product” engine tracks social trends and feeds concepts directly into sourcing, while its self-healing inventory system reroutes supply before shortages appear, saving $55M+. JPMorgan Chase and Mastercard embedded AI across trading, fraud detection, and transaction scoring to transform operational tools into revenue-driving capabilities. Uber rebuilt its customer-service systems from scratch, replacing rigid rules with clear goals for AI agents.

The fatigue of talking about AI for the sake of talking about it is real. But when you look at what companies are building? The advancements are remarkable—and company leaders expect those to compound with each passing year. The challenge is extracting value and turning towards AI as a growth driver versus an efficiency play.

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2. The AI Talent Restructure

As for taking a stance on the role of AI in the workforce, some have gone all in: Duolingo’s CEO Luis von Ahn boldly declared the company “AI-first,” signaling a fundamental shift in how it hires and operates. Others have moved forward similarly, only without public statements. PepsiCo promised a “record year of productivity savings” in 2026 to fund growth without once mentioning AI in their Q4 earnings, even while Coca-Cola’s incoming CEO Henrique Braun made AI and digital a defining strategic priority.

To deliver these promises, companies have led colossal workforce restructurings. Intel, UPS, Amazon, and Verizon have all made cuts in the tens of thousands. Jack Dorsey’s Block laid off nearly half its staff, framing it as becoming a “smaller, faster, intelligence-native company,” an operating model reset.

But, for the AI powerhouses, these major talent shifts aren’t merely downsizing. Companies are paying a premium for the talent that can push them ahead. Meta, OpenAI, Google, and xAI reportedly offered $20M+ equity awards — and in some cases $100M packages — to recruit elite AI researchers. Capability-building now means smaller teams, higher talent density, and a few highly leveraged technical leaders.

Culture has proven to be a driver of uncommon growth across all industries. As AI implementation continues, organizations that communicate clearly and tie AI to employee impact and values are seeing faster, more sustainable adoption.

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3. Reinventing Toward Relevance

The ripple effects of AI and last year’s ‘Proceed with Caution’ economy pushed companies to reinvent. We noticed a few distinct flavors of reinvention in 2025: the pivot, the shed, and the path to platform.

The Pivot

Tesla halted Model S/X production to build Optimus robots. Lemonade is reinventing insurance offerings to incorporate new AI realities. Southwest made a massive bet by introducing bag fees, assigning seating, and removing its “never expire” flight credits.

The Shed

Some companies are aiming to get smaller and stronger in specific areas. Comcast spun off its cable networks and leaned on theme parks, and Peacock deals for revenue. Meta officially shifted its narrative from “Metaverse” to “Superintelligence,” no longer promoting Reality Labs for VR. Siemens is spinning off their Healthineers business. Medtronic announced the spin-off of its $2.7B Diabetes business to simplify operations and double down on procedural medtech, where its cardiac ablation solutions surged nearly 30%.

The Path to Platform

The companies that chose to keep adding were betting on becoming something else entirely. Robinhood evolved from meme-stock brokerage to financial super app—prediction markets, retirement, credit cards, banking, managed portfolios—with revenue up 52% to $4.5B and platform assets up 68% to $324B. The New York Times hit nearly 13 million subscribers by bundling news, games, cooking, and sports into a contained ecosystem. JPMorgan Chase continued rewiring itself as an integrated platform, backed by a $18B technology budget and the operational deployment of agentic AI.

For others, reinvention meant short-term loss for long-term potential. UnitedHealth absorbed a $1.6B restructuring charge against a backdrop of genuine turbulence and still grew full-year revenues 12% to $447.6B. The restructuring wasn’t a retreat, but a bet on what comes next.

Whether getting lean or integrating more capabilities, the underlying question remains the same: where and when will our investments pay off? We’ll see if that question drives continued reinvention in 2026.

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4. M&A Outlook / The R&D Arms Race

From a muted M&A environment in 2024, deal volume and deal value were both up in 2025. There were notable acquisitions—Alphabet acquired Wiz to enhance AI-powered cybersecurity across multi-cloud environments, Verizon added fiber infrastructure through its Frontier deal, Paramount won the long battle for the premium-priced Warner Bros. Discovery, Dick’s Sporting Goods acquired Foot Locker, and Pfizer’s acquisition of Metsara brought it into the GLP conversation.

But there’s more to the story. Only about 7% of total corporate cash spending went to M&A; the rest? R&D and capex. Companies that try to buy growth are still waiting for the payoff. PE firms like Carlyle and Blackrock had successful fundraising and financial performance, yet the market still struggled to deploy capital in an environment where ROI is difficult, and AI makes future earnings less predictable.

The companies that drove growth in 2025 built it themselves. Meta is moving to own the entire AI stack, reducing reliance on NVIDIA and investing heavily in AI commerce. Palantir’s U.S. commercial revenue grew 137% year-over-year, with AIP becoming a repeatable growth engine. CrowdStrike pushed R&D spending up 38% to launch Falcon AIDR, a full AI-native security platform.

In healthcare, Eli Lilly invested $55B in manufacturing to scale GLP-1 production far beyond current demand, partnering with NVIDIA on AI-driven drug discovery to compress R&D timelines. Hims & Hers invested in proprietary telehealth infrastructure to build direct-to-consumer health at scale, and AbbVie is building a neuroscience franchise intended to rival the scale of its immunology business. The M&A window may reopen as clarity returns, but 2025 made a strong case that in an AI-driven economy, growth can be driven organically.

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5. Customer Obsession: Know who You’re Serving

Despite a resilient (if but wobbly) economy in 2025, some consumers acted as if nothing stood in their way. Moody’s Analytics reported that the top 10% of households were responsible for nearly half of all consumer spending, validating Powell’s characterization of a “bifurcated economy.” The companies winning at the top are commanding premiums by delivering differentiated experiences, and those winning at the bottom are using AI to deliver more for less. The companies in the middle—the ones doing neither—are getting hollowed out.

Winning at a Higher Premium

Netflix closed 2025 with over 325 million paid subscribers, and with another premium price hike on the way, it’s proving that relentless investment in IP consumers care about makes for inelastic demand. Crocs’ Jibbitz charm revenue hit $271 million in 2024, with 3/4 buyers purchasing charms to personalize their crocs, turning a one-time shoe sale into an ongoing relationship. Colgate is pushing into premium with its Optic White Pro Series, positioning at-home whitening as a credible alternative to professional treatments.

Winning the Value

Costco raised membership fees for the first time in years, and, with a 92% renewal rate, no one flinched. Its private-label, value-driven Kirkland Signature brand continued to grow faster than the total business. DoorDash expanded well beyond food delivery into grocery, retail, and convenience, only adding value to its household name.

Stuck in the Middle

Target’s stock fell 34%. The company is investing in store remodels and trying to compete, though still not affordable enough to win the price-conscious shopper and not differentiated enough to command loyalty at the top.

Being ‘stuck’ doesn’t mean it’s over. Starbucks pivoted back to its beginnings, putting customer experience first with a $1B investment in its ‘Coffeehouse Uplift’ initiative to shift perceptions of a once dreaded destination to again being the token ‘third place.’ Even as they constantly evolve, focusing on core customers will likely be a key theme in 2026.

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