Despite a dip in broader CEO sentiment, nine in ten CEOs surveyed anticipate revenue growth and improved profitability in 2026. According to the latest EY-Parthenon CEO Outlook Survey, which polled 1,200 global CEOs across 21 countries, leaders remain more confident in their own companies’ prospects than in the global economic outlook.
The CEO Confidence Index—a measure of sentiment across multiple business dimensions—fell from 83.0 in Q3 2025 to 78.5 in Q4 2025, reflecting uncertainty caused by geopolitical tensions, supply-chain disruptions, rising costs, and slowing activity in key markets.
Still, CEOs are optimistic about strengthening internal performance. Even though 61% expect higher operating costs, 90% anticipate revenue growth and productivity gains. This confidence is fueled by ongoing investments in talent, technology, and continuous transformation initiatives. Forty percent of CEOs are prioritizing enhanced customer engagement and retention, while 37% are focusing on innovating products and processes.
CEOs are increasingly proactive, with 40% accelerating investments in response to geopolitical or trade developments, compared with 31% who delay and 10% who pause investments. Operational optimization, productivity improvement, AI, and digitalization top their strategic priorities for the year ahead.
AI and Talent as Engines of Growth
2026 is poised to be a turning point for AI adoption, as CEOs move from pilot projects to enterprise-scale deployment. Fifty-eight percent view AI as a major growth engine over the next two years, and 32% believe it will fundamentally reshape operations. Over 90% of CEOs have started or plan major transformation initiatives this year, leveraging AI to drive productivity, revenue, and customer experience. However, only 20% report that AI has significantly exceeded expectations so far.
Talent remains central to AI-driven transformation. Seventy-nine percent of CEOs feel confident in attracting and retaining critical skills, and 69% expect AI investments to maintain or expand employment levels—down from 46% predicting headcount reductions in January 2025. This reflects a pragmatic approach to combining AI with human oversight in key business functions.
M&A and Strategic Alliances Fuel Transformation
Mergers and acquisitions remain a critical lever for transformation, digitalization, and growth in 2026. CEOs are increasingly pursuing deals domestically and regionally, targeting technology, talent, and capabilities that accelerate strategic priorities. Joint ventures and strategic alliances are rising, with 79% planning such initiatives compared to 62% in 2025, providing faster, more flexible access to capabilities.
Proactive capital allocation is evident: 83% of CEOs adjusted strategic investments in the past year due to geopolitical and trade developments, while 40% accelerated investments in response. Over the next 12 months, 53% plan acquisitions aligned with digitalization, operational efficiency, and growth—up 5% from Q3 2025.
The US remains the top investment destination, followed by Canada, Germany, the UK, and India, as CEOs balance opportunities with geopolitical risks and regulatory scrutiny.
Andrea Guerzoni, Global Vice Chair of EY-Parthenon, notes: “2026 will be a year of uncertainty. Success will go to CEOs who actively rewire capital allocation, navigate geopolitical complexity, and leverage technology-led M&A to build resilient, flexible portfolios capable of seizing opportunities amid volatility.”
