Companies Report Firm Demand, Relentless Cost Pressure
In first-quarter 2026 filings across 168 domestic companies, cost inflation ran more than five to one negative while demand and capital spending held their ground.
Coverage: 166 of 168 companies in this theme (OPTX, TE, QUIK, GCTS, BZAI, SMTC, MU, TYGO, AXTI, MX, AVGO, MRVL, DUOT, NCNO, NTSK, PRGS, SHAZ, TBRG, ANDG, ADBE, BRZE, PATH, NNDM, ONDS, IMMR, MPTI, P, PL, SATL, OSS, BKSY, XRX, DELL, BKTI, AIRS, CNTA, FBRX, OMER, PVLA, LXEO, MGTX, AUTL, FENC, MNPR, SBC, UTMD, AIRO, KULR, PPHC, VELO, IMSR, LGN, MLKN, SPCE, EPAC, AGX, PAYX, VATE, KR, PLAY, PVH, ROST, TITN, TJX, AEO, DBI, CCL, DDS, DKS, DRI, ALTI, DGXX, GEMI, GIW, GIX, IPCX, KEEL, RILY, TONX, INV, SLNH, ABTC, FCAP, GBFH, NKSH, FBLA, FXNC, MCHB, BCML, EFSI, FCCO, FVCB, PCB, BHB, CLB, EGY, NGS, SMC, WBI, WTI, ACDC, MNR, NUAI, HPK, INR, BKV, CDZI, ARTNA, CWCO, OPAL, HNRG, MNTK, HDRN, YORW, AES, VG, CWT, EE, VENU, FBYD, NMAX, SCHL, SPIR, ATNI, STGW, ANGX, IDT, TTGT, GRPN, ACCO, CMC, EU, TMC, REX, USAR, FUL, LODE, IDR, UAMY, GORO, MUX, CTGO, NXDT, BOC, TRC, BRT, NEN, ARL, REFI, TCI, FPH, OLP, WSR, CBL, MKC, UCFI, SFD, GIS, LWAY, AVO, CVGW, FIZZ, LMNR, VFF, CPB, WEST) — a sample, not the full set.
Cost pressure, not demand, defines the quarter. Across a 168-company sample of domestic 10-K and 10-Q filings for the period ended March 31, demand commentary skewed positive by nearly two to one — 70 positive statements against 39 negative, out of 137 total — while input-cost commentary ran almost the opposite direction, with 153 of 208 statements describing costs rising and just 33 describing relief. That gap, more than five-to-one against companies on costs versus roughly two-to-one in their favor on demand, is the widest imbalance in the tally, and it shapes nearly everything else companies said this quarter.
Pricing power looks contested rather than lost. Companies split 27 positive to 25 negative on their ability to raise prices, with selective increases and improved mix cited almost as often as failures to pass costs through on fixed-price or contracted work. Hiring tells a starker story: 38 of 63 statements were negative, with restructuring and headcount reductions showing up far more often than hiring pushes. Capital spending diverges from labor entirely — 38 positive and just 12 negative out of 110 statements, with a majority (55) describing capex as a steady, ongoing commitment rather than a swing factor. Companies are cutting headcount while continuing to build.
Consumer-facing commentary is thinner and more downbeat than demand commentary broadly. Consumer-behavior statements ran 20 negative against 7 positive out of 35, and inventory mentions skewed negative too on a small base of 20, a sign that whatever end-demand strength companies see in aggregate isn't translating into confidence about the shopper specifically. Outlook statements still land net positive, 54 to 42 with 23 neutral, meaning management teams are on balance still guiding forward, just not uniformly, and with cost inflation doing most of the work to temper it.
**Semiconductors** show the clearest demand strength in the sample, with 10 of 12 statements positive. Syntec Optics Holdings (OPTX) said it expects sales to grow as customers shift toward more sophisticated systems rather than simple replacements, while stockpiling raw materials to avoid production disruptions. T1 Energy (TE) is leaning on 45X tax credits as a funding source over the next decade even as it flagged consumer-demand volatility tied to the macro backdrop. QuickLogic Corporation (QUIK) described a supply shortage driven by demand outrunning production capacity, alongside rising product and logistics costs — a sector where the bottleneck is capacity, not appetite.
**Software & Cloud** demand held up (6 positive of 11) but cost and headcount lines are more strained. nCino (NCNO) posted ACV growth tied to customers expanding use of its AI capabilities, even as it cut sales, marketing, and R&D headcount under a 2026 restructuring plan. Netskope (NTSK) attributed revenue growth to new customers and rising demand from its existing base, while Duos Technologies Group (DUOT) pointed to backlog growth and new commercial projects as reasons to expect improving revenue, even as manufacturing ramp-downs have temporarily slowed project activity.
**Hardware & Devices** carries some of the sharpest cost and labor strain in the sample: input costs ran 11 negative of 13 and hiring 7 negative of 8. Nano Dimension (NNDM) said it expects hardware sales to grow as it expands into new markets, while citing inflation-driven increases in labor, commodity, and materials costs and warning that near-term R&D investment will mute profitability. Ondas Holdings (ONDS) reported cost of goods sold rising on acquisitions and higher labor and material costs, alongside headcount-driven increases in both administrative and sales expense.
**Healthcare & Pharma** produced the most negative outlook tilt of any bucket, 9 negative against 3 positive of 15. AirSculpt Technologies (AIRS) said 2025 revenue declined on lower case volume even as rate increases partly offset it, while customer acquisition costs kept climbing, to roughly $3,114 per customer from $2,950 a year earlier. It is turning to new services such as skin tightening to expand its customer reach. Centessa Pharmaceuticals (CNTA) said it expects continued significant operating losses as it funds development and hiring.
**Industrials & Manufacturing** logged the sector's strongest demand outside semiconductors, with 9 of 15 statements positive, much of it geopolitical. AIRO Group Holdings (AIRO) said conflicts in Ukraine and the Middle East, along with NATO stockpile replenishment, have lifted interest in its products, and it expects additional orders over the next several years. At the same time, it flagged inflation-driven increases in labor and supplier costs that it cannot always offset on fixed-price contracts, and delayed aircraft funding that hurt its Training segment.
**Retail & Consumer** carried some of the heaviest cost commentary of the quarter, 12 negative of 21 on input costs, alongside a mostly negative outlook (4 of 6). Dave & Buster's Entertainment (PLAY) said it expects economic pressure to weigh on both supplier pricing and consumer spending on entertainment and dining, even as menu price increases and supply-chain optimization cut food and beverage costs. Kroger Co. (KR) absorbed a $44 million net charge tied to a labor dispute, and PVH Corp (PVH) described a complex, challenging retail environment shaped by inflation, tariffs, and elevated rates, particularly in North America.
**Financial Services** demand statements split evenly, 5 positive and 5 negative of 12, while input costs ran negative (9 of 12). AlTi Global (ALTI) cited resilient household demand and easing inventory drags supporting broader activity, while warning that a slowdown in inflows or sustained market declines could cut into management fees. Gemini Space Station (GEMI) said transaction revenue depends on crypto-asset price cycles that swing user activity in either direction, and added headcount that pushed personnel costs higher. Digi Power X (DGXX) said it expects to need further financing as it shifts from cryptocurrency mining toward AI-focused data-center infrastructure.
**Banking** input costs were lopsidedly negative, 7 of 9, mostly deposit and compensation costs. First Capital (FCAP) said its average cost of interest-bearing deposits rose to 1.61% from 1.04%, and noninterest expense climbed on higher professional fees and compensation, even as it kept pushing to grow low-cost demand deposits and loan volume. National Bankshares (NKSH) said its forecast points to stable unemployment over the next 12 months, while noting personal bankruptcy filings have risen even as business filings declined.
**Energy** demand ran strongly positive, 10 of 16, but costs and outlook skewed negative. Core Laboratories (CLB) said capital spending will continue to track client demand and that it has not yet set a 2026 investment level given uncertain industry activity. Vaalco Energy (EGY) guided to a 2026 capital program of $290 million to $360 million weighted toward free cash flow and shareholder returns, while citing supply-chain-driven inflation in labor and materials and expecting elevated inflation to persist near-term.
**Utilities** produced the most lopsided input-cost picture of any bucket, 16 negative of 18. Artesian Resources (ARTNA) said Delaware electric supply rates rose about 25% starting in May 2025 and Maryland rates rose 5.5% in November, even as it plans roughly $64.3 million in 2026 utility-plant investment to upgrade aging systems. Cadiz Inc (CDZI) said ATEC filter shipments rose to 441 units in 2025 from 286, improving margins as fixed costs spread across more volume.
**Communications & Media** skewed toward a positive outlook, 6 of 10, alongside negative input costs (12 of 16). Venu Holding (VENU) said it is expanding aggressively into Oklahoma and Texas while seeking cost-saving measures to offset inflation and borrowing costs, and does not expect operational profit until more venues open. Falcon's Beyond Global (FBYD) said operating cash flow fell as corporate overhead, compliance costs, and working-capital needs rose following its OES acquisition.
**Materials & Chemicals** leaned positive on capital spending, 6 positive of 13, even with negative input costs (10 of 14). Commercial Metals Company (CMC) directed 19% of its capital spending toward building a fourth micro mill. enCore Energy (EU) said realized uranium prices fell on ceiling prices embedded in customer contracts, even as it continues to pursue new sales agreements to support production growth. TMC the metals company (TMC) cited elevated marine fuel prices and vessel day rates pushing exploration expenses beyond initial estimates.
**Real Estate** input costs ran heavily negative, 12 of 17, largely tied to financing and property expenses. NexPoint Diversified Real Estate Trust (NXDT) said inflation has cut hospitality-segment occupancy by reducing travel demand, even as it described the broader real-estate market as resilient to inflation given nationwide rent increases. It also flagged that higher living costs for residents and rising expenses for commercial tenants could raise default rates.
**Food, Beverage & Tobacco** showed the sharpest split of any bucket: input costs ran heavily negative (15 of 19) while outlook ran entirely positive to neutral (5 positive, zero negative, of 6) and consumer-behavior comments leaned positive (4 of 5). McCormick & Company (MKC) guided to 2026 net sales growth of 13% to 17%, driven largely by its McCormick de Mexico acquisition plus 1% to 3% organic growth, while flagging labor shortages, turnover, and rising labor costs as risks to manage. CN Healthy Food Tech Group (UCFI) said bringing its own production base online in October 2025 solved supply problems for three main products and expects to keep raising the share of goods it produces in-house. Companies willing to invest through the cost cycle, rather than retreat from it, are the ones still raising guidance.