How AI and Capex Strategies Shape L3Harris Growth in 2026

What Waste Management’s Q1 2026 results indicate about AI spending

Waste Management describes AI as already embedded in multiple parts of its operations, and it frames additional AI investment as ongoing, not a one-off initiative.

• AI-supported safety and coaching is already in place. Management says its “best Q1 safety numbers ever” are helped by using AI for coaching with 20,000-plus drivers. ¹
• AI is being used to improve recycling quality and pricing. WM states it uses AI-enabled cameras on trucks to identify nonrecyclable materials, contact customers to correct recycle streams, and that this has been “a positive on the price line and on the quality of material coming into the recycling plants.” ²
• AI is part of a broader automation/data system that already operates at scale. WM says trucks capture 300 million+ images per year, and WM “process[es] about 95%…without human touch,” using the data for safety, contamination, pricing opportunities, and routing/service right-sizing. ³
• AI spending still shows up as a headwind in near-term margins, implying continued investment. WM reports that Q1 operating EBITDA margin expansion included 40 basis points of increased spending on technology initiatives (with Q1 also citing tech/automation cost actions in collection and disposal). ⁴ This indicates that even while AI/tech benefits are showing up, WM is still investing enough to create an incremental drag in the quarter. ⁴
• Management explicitly ties future AI benefit to “runway” for acceleration. WM says it has seen as much benefit as shows up in OpEx and margins, but “still see[s] a lot of runway to continue to accelerate those investments.” ¹
• WM is intentionally still “early” in technology embedding. Management characterizes its technology-embedding effort as being in the “early innings,” specifically aiming to make roles “less labor dependent.” ¹

Bottom line on AI spending (from Q1 2026): WM is not retreating from AI/technology; it’s portraying AI as operationally deployed today (safety + recycling quality + data capture) while also signaling continued incremental spending because benefits are still ramping and WM believes there is “runway” to accelerate further investment. ¹⁴²³

---

What Waste Management’s Q1 2026 results indicate about capital expenditure (capex) plans

WM’s Q1 2026 discussion separates capital spending themes into (a) sustainability capex already in motion and (b) ongoing technology/operations support, with explicit commentary that some sustainability projects are completing.

1) Near-term total capex and sustainability-directed capex

• WM reports total capital expenditures of $650 million in Q1 and $61 million directed to sustainability growth investments. ⁴
• WM says capital spending was approximately 22% lower year-over-year, reflecting “normalized spend on collection vehicles and lower sustainability capital as several projects reached completion during 2025.” ⁴

Implication: Q1 shows a moderation in capex vs. last year, consistent with a portfolio where parts of the sustainability build are moving toward completion (though not finished). ⁴

2) Longer-run sustainability capex program nearing completion

• WM states: “In 2026, we are on track to substantially complete the sustainability capital expenditure program we laid out in 2023.” ⁵

Implication: WM is projecting that sustainability capex intensity should decline as the 2023 program reaches the “substantially complete” phase in 2026. ⁵

3) Capex is also supporting segments that WM highlights as benefiting from investments

• WM ties performance partly to sustainability investments: it says renewable energy operating EBITDA “more than doubled” in the quarter, driven by completion of seven new renewable natural gas facilities since 2025. ⁵
• WM also links recycling performance to “sustainability investments” and specifically cites automation benefits (automation and AI in plants) and processed volume increases. ⁵³

Implication: even as total capex is down vs. last year, WM’s capital allocation appears targeted toward renewable natural gas facilities and automation/AI-driven plant and truck systems, which are producing operational results. ⁵⁴³

---

AI vs. capex: how WM connects them (and what Q1 reveals about pacing)

WM’s Q1 commentary suggests two interacting investment tracks:

1. Sustainability/build capex that is in a late-stage completion cycle (substantially complete in 2026), with Q1 sustainability capex at $61 million and total capex at $650 million. ⁵⁴
2. Technology initiatives (including AI) that continue to require spending even while yielding benefits; WM reports 40 basis points of increased spending on technology initiatives impacting margins in Q1. ⁴

So, Q1 reveals that WM is balancing:

• Capex harvesting / completion for sustainability projects already planned (program laid out in 2023, substantially complete in 2026). ⁵
• Ongoing AI/technology acceleration even if some near-term margin impact occurs (tech spending headwind) because WM believes benefits and automation/routing potential are not fully realized yet (“early innings” and “runway”). ¹⁴

---

Practical takeaway (directly answering the question)

• AI spending: WM indicates continued AI investment rather than winding down—AI is already contributing to safety coaching ¹, recycling contamination detection and pricing/quality ², and large-scale data processing/routing decisions ³, while Q1 shows a technology spending headwind and management signals runway to accelerate investments. ¹⁴
• Capex plans: WM shows moderation in total capex (Q1 capex $650 million, 22% lower YoY) ⁴, with sustainability capex still active but smaller in the quarter ($61 million). ⁴ Importantly, WM expects in 2026 to substantially complete the 2023 sustainability capex program, implying a transition from heavy buildout toward later-stage economics/harvest. ⁵

Overall: Q1 2026 portrays AI as a continuing, scaling investment with benefits ramping over time, while capex is more phased—particularly for sustainability—moving toward substantial completion during 2026. ¹⁵⁴