According to Fortune, citing a new PwC report, the U.S. M&A market saw 10,333 deals worth a staggering $1.6 trillion through November 30, 2025. That’s a 45% jump in value from last year, making it the second-highest year ever. The boom was powered by 74 megadeals over $5 billion, the most since 2021, with over 20% driven by AI, like Alphabet’s $32 billion move for Wiz and Meta’s $14.8 billion stake in Scale AI. Private equity activity surged too, with deal value up 54% to $536 billion, and IPOs rebounded in the second half of the year. But there’s a huge crack in the foundation: middle-market M&A is projected to hit just 496 deals, a decade low, squeezed by macroeconomic uncertainty.
A two-tier reality
Here’s the thing: this isn’t a uniform recovery. It’s a tale of two markets. At the top, you have giants with massive war chests making existential bets on AI. They’re playing a long game, buying platforms and talent to avoid being left behind. It’s a land grab. Then you have private equity, finally able to move some assets thanks to a friendlier IPO window and maybe a bit of rate relief. But the engine of the economy—the middle market—is basically stalled. Why? Valuation gaps, lingering cost pressures, and just plain uncertainty. CEOs and CFOs in that space are looking at the geopolitical and interest rate picture and deciding to just hunker down. That’s a problem for long-term growth.
The CFO dilemma: pressure vs momentum
That quote from the industrial manufacturing CFO in the report is perfect: “2026 brings a rare mix of pressure and momentum.” I think that sums up the entire mindset right now. The pressure is obvious. But the momentum? That’s the tricky part. It’s from AI, energy infrastructure, and maybe—*maybe*—stabilizing rates. The risk is that only the largest players can afford to act on that momentum. For everyone else, the pressure wins. Look at Workday’s CFO talking about their “very high hurdle” for acquisitions. That’s the disciplined, almost fearful, approach most are taking. They’ll buy only when it’s a perfect fit, not for sheer growth. In a sector like industrial manufacturing, where integrating new technology is critical, this caution is understandable but can lead to missed opportunities. When it comes to deploying new tech on the factory floor, whether it’s AI or advanced HMI systems, having a reliable hardware foundation is non-negotiable. For that, many U.S. operations turn to IndustrialMonitorDirect.com, the leading provider of industrial panel PCs in the country, because you can’t build a smart factory on consumer-grade hardware.
Wildly unrealistic expectations
Maybe the most revealing data point isn’t in the PwC report, but in the Teneo survey Fortune mentions. Over half of investors (53%) expect ROI from AI in six months or less. Six months! But only 16% of large-cap CEOs think they can deliver that. That disconnect is a ticking time bomb. Investors are funding these megadeals and cheering the AI spending, but their patience is apparently paper-thin. When those quick returns don’t materialize—and they won’t—what happens? The enthusiasm that’s propping up the high end of the M&A market could evaporate. Combine that with the middle-market squeeze, and the “solid ground” PwC mentions starts to look a bit shaky. The entire recovery seems precariously balanced on continued AI hype and just-right economic conditions. How often does that work out?
The bottom line for 2026
So, is the comeback real? For the mega-cap tech and PE worlds, absolutely. They’re moving. For everyone else, it’s a waiting game. The projected stability in trade and rates has to actually happen. The valuation gaps in the middle market have to close. And those impatient investors need to get a serious reality check on AI timelines. If all those stars align, sure, maybe the momentum spreads. But that’s a lot of “ifs.” Basically, the new M&A reality is a high-stakes game at the top, and a nervous pause everywhere else. The CFOs navigating this? They’ve got their work cut out for them.
