PwC: Confidence in Investment Returns Hits Five-Year Low

Investment returns are becoming increasingly uncertain as global leaders report declining confidence in their ability to deliver consistent financial gains, despite significant capital deployment in emerging technologies and business transformation.

PwC's newly released Global CEO Survey, presented at the World Economic Forum's Annual Meeting in Davos, reveals that CEOs are experiencing their lowest level of revenue confidence in five years.

The research, which surveyed more than 4,000 CEOs across 95 countries and territories, suggests that rising geopolitical risk, intensifying cyber threats and rapid technological change could be preventing businesses from translating substantial investment into predictable returns for shareholders.

However, the data indicates that executives are responding to these headwinds by focusing capital allocation on multi-year opportunities, prioritising innovation in new sectors and maintaining investment commitments in AI despite uncertain near-term payoffs.

Investment returns from AI deployment

PwC's research reveals a stark divide in investment performance between companies successfully deploying AI and those struggling to progress beyond pilot programmes.

Only 12% of CEOs report that AI investments have delivered both cost savings and revenue benefits over the past year, suggesting that capital deployed in this technology has yet to generate meaningful returns for the majority of organisations.

This small cohort of successful AI investors could be establishing a competitive advantage by building strong technological foundations and deploying the technology across their entire business operations.

According to PwC, these companies are two to three times more likely to have embedded AI extensively across products, services, demand generation and strategic decision-making, potentially creating significant barriers to entry for competitors.

The investment reality for most companies appears markedly different. Over half of CEOs surveyed (56%) have seen neither revenue gains nor cost benefits from AI investments, whilst 30% report increased revenue and 26% have seen costs decrease.

These figures suggest that AI investment returns remain highly variable and dependent on implementation quality rather than spending levels alone.

Mohamed Kande, PwC Global Chairman, says: "2026 is shaping up as a decisive year for AI. A small group of companies are already turning AI into measurable financial returns, whilst many others are still struggling to move beyond pilots.

"That gap is starting to show up in confidence and competitiveness, and it will widen quickly for those that don't act."

According to PwC, companies applying AI extensively to products, services and customer experiences achieved nearly four percentage points higher profit margins than those that did not, suggesting that successful deployment could translate directly into improved returns for investors.

Capital deployment in new sectors

To mitigate challenges and identify new growth opportunities, 42% of CEOs say their company has begun competing in new sectors over the past five years, representing a significant reallocation of capital away from traditional business lines.

Among those planning major acquisitions in the next three years, a similar proportion (44%) expect to pursue deals outside their existing industry, indicating that M&A investment strategies are increasingly focused on diversification rather than market consolidation.

PwC's data suggests this investment approach could be delivering results. Companies generating higher percentages of revenue from new sectors report larger profit margins and their CEOs express greater confidence in growth prospects, potentially offering more attractive risk-adjusted returns for investors.

Innovation investment practices

Half of all CEOs say innovation is central to their company's business strategy, yet the research reveals significant gaps between stated priorities and actual investment practices.

Only one in four agree that their organisation tolerates high-risk innovation projects, has disciplined processes to stop underperforming initiatives or operates a defined innovation centre.

Fewer than one in 10 CEOs (8%) say their company has implemented at least five of six innovation-friendly practices to a large extent.

However, PwC's survey data shows that companies employing these practices achieve higher percentages of sales from new products, faster overall revenue growth and higher profit margins, suggesting that innovation investment discipline could be a key differentiator in future returns.

For investors, the question of whether portfolio companies are transforming fast enough to keep pace with AI ranks as the top concern among CEOs themselves, cited by 42% of respondents.

Mohamed says: "In periods of rapid change, the instinct to slow down is understandable, but it's also risky. The value at stake across the global economy is increasing, and the window to capture it is narrowing.

"The companies that succeed will be those willing to make bold decisions and invest with conviction in the capabilities that matter most."