A Letter To Our Clients – 2026

Over the past several years, AI has moved from Silicon Valley high-tech computer science to more mainstream access and a front-page board topic. In 2026, it will continue the shift from narrative to accountability. Investors are already rewarding companies that connect AI to near-term productivity and margin durability, but those that communicate with quantification on capital spend and discipline and linkage to revenue generation will benefit more. Indeed, investors will be increasingly skeptical of broad claims that aren’t paired with a clear strategic framework and KPIs.

As always, investors are looking for progress, not perfection. They’re looking for repeatability: a playbook, measurement system, and clear view of where AI is being deployed and driving true business impact. That is the case for AI as an internal productivity lever and for companies exposed to the AI capex cycle.

We’re also seeing a new dynamic emerge: “FOBO” (fear of becoming obsolete). When investors feel they may be missing an inflection, they gravitate toward the companies that can narrate AI with confidence and show enough proof to justify leaning in. That puts pressure on management teams to avoid two traps: 1) overselling AI with vague, hyped-up language; and 2) underselling AI by treating it as “just another initiative.” Best-in-class communicators apply rigor and discipline: they establish a baseline, highlight what has changed since last quarter, and provide conservative scenarios for advancing efforts and next steps.

In 2025, companies across sectors have positioned AI as a transformative driver of productivity and competitive advantage. References to AI on earnings calls surged from 1,933 in 2020 to 32,570 in 2025 – nearly a 17x increase (Source: Corbin Advisors). In fact, 2025 mentions alone exceeded the combined total from 2020 through 2023! The acceleration began in 2023 alongside the mainstream adoption of generative AI and large language models, and it continued through 2024 and 2025 as companies embedded AI more deeply into both operations and strategy.

Furthermore, AI references in our Voice of Investor® Perception Studies surged. In these long term-oriented, primary research studies conducted on behalf of our clients, the number of references to AI in 2025 increased 68% from 2023 and more than 1500% since 2022.

In a preliminary reading of our Q4’25 Earnings Primer® investor survey results, AI questions center around three themes: 1) specific use cases and adoption milestones; 2) magnitude and timing of productivity gains; and 3) cost, both in dollars and organizational disruption.

Selected investor commentary includes:

• “What is the AI plan – and how are you actually implementing it?”
• “How are you using AI most effectively, and where is it still early?”
• “What productivity gains are you assuming – and how will we see them show up in the P&L?”
• “What does AI adoption mean for costs, jobs, and the operating model?”
• “Are we in an AI bubble, or is demand for AI infrastructure sustainable?”

In an analysis of recent commentary from chief strategists and recent Voice of Investor® Perception Study interviews, industry experts preview what is to come:

• “This is an AI-led bull market. It is less about shareholder returns…than whether they can develop AI and monetize the opportunity.” Ohsung Kwon, Chief Equity Strategist, Wells Fargo
• “AI is a big opportunity. There’s still uncertainty around how it’s going to be best deployed. The challenge is identifying which opportunities create value versus being money pits.” Portfolio Manager 
• “Trying to get AI right, figuring out where the value is, and how they are going to best differentiate themselves…is going to be a big challenge.” Security Analyst
• “Our view is more positive, but it’s not over. AI is well appreciated by the market already. It’s a little more selective now versus before, when you could buy anything in the AI supply chain.” Security Analyst

If 2025 taught us anything, it’s that policy can – and will – change much faster than corporate planning cycles. For companies, that means two things. First: there is a need for faster scenario work, since the market will ask you to quantify impacts before the dust settles. Second: clearer communication guardrails are required, because ad-hoc updates can create as much or more uncertainty than the headline itself.

We also expect the market to keep revisiting the knock-on effects of policy, particularly when the timing and magnitude are uncertain. For example, tax and industrial policy can create real tailwinds, but investors will discount them until they see proof in orders, conversion, and cash.

A useful corporate framing that resonates is: (i) what we know, (ii) what we don’t know yet, and (iii) what we will do either way. This structure offers transparency without looking unprepared and avoids the whiplash of reacting to every new headline or painting yourself into a corner by providing too much detail too early on.

Investors will be especially focused on companies that can translate this mitigation playbook into tangible actions like supplier diversification and contractual pass-throughs. On each of these fronts, it is important to manage expectations on timing (when the impact hits, and when / under what circumstances mitigation shows up). Always err on the side of conservatism and build in more hedge to account for variability and curve balls.

In 2026, we expect a continued “Policy-by-Post” dynamic – where an announcement can move markets before details or timelines are fully understood. And whether the topic is tariffs, tax policy, industrial policy, or enforcement priorities, the market’s first reaction will be to stress-test the most exposed business models.

The solution is not to predict every outcome. It is to be ready with ranges and decision rules (i.e., what you would do if X outcome materializes) so that when investors ask, your answers are intentional, consistent, credible, and grounded in how you run the business.

When headlines move fast, companies whose responses are thoughtful, authentic, and reality-based stand out and build credibility. Investors appreciate the dynamics and understand situations are fluid – they recognize companies do not have all the answers. That said, they reward pragmatic, prepared, and “in control” leaders with the ability to simplify complexity versus those that come off as haphazard and answer questions off the cuff. Throughout 2025, we reiterated our maxims of “don’t own the macro” and “control the controllable” and will continue to do so in 2026. In today’s market, which is devoid of psychological safety for investors, building a resilient and durable business that is recognized and appreciated by investors is critical to outperforming the markets; indeed, superior execution plus effective investor communication is the formula for success.

Companies and capital markets experts are adapting in turn:

• “Figure out what you need surgically by product based on cost components…don’t do a broad brush on [tariff impacts].” Q3’25 Earnings Call, Daniel Florness, CEO, Fastenal
• “Most of us are in a period of waiting for a bit more clarity.” Analyst Call, Doug Ostermann, CFO, Stellantis
• “Employers across many industries delayed hiring because of uncertainty related to tariffs. Manufacturing sales were up slightly on average from the previous quarter. The expected weakness stemmed mostly from tariff-related concerns. Policy uncertainty held back greater activity, causing many businesses to delay major decisions.” Federal Reserve Beige Book, Federal Reserve Bank of Boston
• “Much of it thus far has been wrong and misreported. As we said before, it’s impossible to know what will happen. Where will tariffs finally settle? What happens when we deplete the inventory we forward bought or that our selling partners who were deployed in advance of the tariffs going into effect. If costs end up being higher, who will absorb them? What we can share is what we’ve seen thus far, which is that through the first half of the year, we haven’t yet seen diminishing demand nor price is meaningfully appreciating.” Q2’25 Earnings Call, Dave Fildes, CFO, Amazon