Finance
Making a business case for AI
Good morning. If you’re a CFO, you’ve been in a board meeting—or will be very soon—communicating your plan to invest in AI. For some insight into that process, I sat down with veteran tech CFO Mark Hawkins. His first piece of advice? “Clearly and unambiguously define the use case.”
“The less difficult it is to understand, the more credible the opportunity,” he explained. “When people can’t explain it, as a seasoned executive, it creates a yellow flag for me.”
Hawkins spent more than 40 years in corporate finance, most recently as president and CFO of Salesforce, which then appointed him president and CFO Emeritus, a position he held through November 2021. He’s also been CFO at Autodesk and Logitech, and he held various positions at Dell and Hewlett-Packard (HP).
Bringing it back to AI, it’s important for CFOs to share with board members “the math, the ROI, the metrics of success” to help build credibility but also be transparent about any risks, and work on building trust, Hawkins said. “It would be wise to really articulate the governance framework for technology,” he added.
It’s also important to make clear the opportunities and potential outcomes—and how those align with the company’s overarching goals and principles.
“When you’re presenting to a super-sophisticated group of technologically advanced people, and most of them could have deep engineering and science backgrounds, it’s a different level of dialogue,” Hawkins continued. Use cases often require additional details, for example.
By 2027, spending on AI software likely will grow to $297.9 billion, with a compound annual growth rate of 19.1%, according to Gartner. The firm’s research also found that boards are asking about AI more than three times as often as considerations tied to cloud computing.
During our conversation, I asked him his personal thoughts on AI, which he compared to electricity, also “a big paradigm.” Artificial intelligence, he said, is going down the path of augmenting people’s abilities and productivity, a journey that potentially includes significant value creation and a chance to create business models that don’t yet exist.
Hawkins also took a moment to reflect a bit on his own journey, including when, at age 21, he joined HP—at the time, a $3.1 billion company. In 2023, its annual revenue was $53.7 billion.
“It was the beginning of my journey into technology,” Hawkins said, “and I’ve been there ever since.”
Sheryl Estrada
sheryl.estrada@fortune.com
Leaderboard
Matt Lesmeister was promoted to CFO at flyExclusive, Inc. (NYSE American: FLYX), a private charter jet company, effective June 25. He will succeed interim CFO Billy Barnard. Lesmeister joined the company on May 30 as EVP and chief of staff and has 14 years of public company experience across various finance roles. Most recently, he served as VP of transformation and strategy at Fox Factory Holding Corp., Before that, Lesmeister served in various roles of increasing responsibility at United Technologies Corporation.
Kevin Nihill was named CFO at Rhinebeck Bancorp and Rhinebeck Bank (Nasdaq: RBKB). Nihill replaced former CFO, Michael McDermott, who retired from the bank after 23 years. Nihill most recently served as EVP and CFO at St. Mary’s Bank. He also served as SVP and treasurer at Berkshire Bank.
Big Deal
Mercer recently published new research about the impact of AI on productivity. The findings, created in partnership with Oxford Analytica, suggest that AI may boost developed markets’ GDP growth up 0.5%, with emerging markets potentially seeing a 0.2% boost in GDP growth.
Another key finding is sectors will experience different AI-enabled productivity boosts: finance and insurance (14%), information and technology (13.4%), manufacturing (6.9%), health care and social assistance (6.3%), transportation and warehousing (5.7%), and hospitality and food service (3.1%, according to Mercer.
Going deeper
“Federal Reserve governor says AI is ‘not going to replace’ central bankers—at least not yet,” is a new Fortune report by Michael del Castillo. He writes: “Lisa Cook, a Federal Reserve governor, isn’t afraid of losing her job to robots anytime soon. Speaking at an Economic Club of New York event on Tuesday, Cook said that when you’re a central bank governor every word counts in a way that not only caught her off guard at first but that likely will catch AI off guard for quite some time.”
Overheard
“By taking a human-first approach and developing AI tools that solve problems everyday people experience, businesses can reach a global audience with broad demographics.”
—Matthieu Rouif, CEO and cofounder of Photoroom, an AI-powered photo-editing app, writes in a new Fortune opinion piece.
Harley-Davidson’s new CEO wants to transform how people think about the iconic motorcycle brand, so the company is trying something different.
This week, Harley announced a new strategy that focuses on lower-priced bikes, rather than relying on older, more affluent customers to buy its higher-margin touring models.
“Back to the Bricks builds on our core strengths and competitive advantages, harnessing the passion of our riders to deliver profitable growth for the Company and both our dealers and shareholders,” Harley CEO Artie Starrs said this week. “As we drive towards this new phase of growth, we remain committed to the craftsmanship and dedication that define our brand.”
Entry-level Harley-Davidsons cost about $13,000, while the higher-end Adventure Touring models average about $23,250, and the Premium Range &CVO models cost about $38,500, according to Reuters.
Harley’s new strategy targets a core profit of over $350 million from its motorcycle business by 2027 and over $150 million in cost reductions.
To kick off the new strategy, Harley is introducing Sprint, a new entry-level model powered by a smaller 440cc engine, later in the year.
What is Harley-Davidson’s “Back to the Bricks” strategy?
Harley’s new strategy relies on more than just pushing buyers toward cheaper vehicles to increase volume. The 123-year-old company has a set of five pillars on which it is building its future.
Harley-Davidson “Back to the Bricks” 5-point plan
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Deep appreciation of Harley-Davidson’s competitive advantages and legacy: The Company’s iconic brand, diversified and powerful revenue channels, and best-in-class dealer network provide a powerful foundation for growth.
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Renewed commitment to exclusive dealer network to drive enterprise profitability: Harley-Davidson’s dealers are a competitive advantage. The Company is planning actions to enable dealers to double profitability in 2026 and then double it again by 2029.
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Immediate actions to recapture share in areas where Harley-Davidson has right to win: Harley-Davidson has strong legacy equity in existing markets including new motorcycles, used motorcycles, Parts & Accessories, and Apparel & Licensing. The Company’s new strategy is focused on positioning the Company to regain share and drive meaningful volume growth in categories where it benefits from credibility, scale, and deep rider connection.
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Strong financial position with a path to stronger free cash flow and EBITDA margin: Cost and restructuring actions already underway support a path to stronger free cash flow and EBITDA margin over time.
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Bolstered management team with balance of fresh perspectives and institutional knowledge: Harley-Davidson has made a number of leadership appointments that support the Company as it leverages its innate strengths.
Written by Jitendra Parashar at The Motley Fool Canada
Dividend investing can be one of the simplest ways to build long-term wealth while creating a steady stream of passive income. But in my opinion, a good dividend stock is about much more than just a high yield. Beyond dividend yield, investors should also look for companies with durable businesses, reliable cash flows, and a history of rewarding shareholders consistently over time.
That’s exactly why many investors turn to financial stocks. Banks and asset managers often generate recurring earnings through lending, investing, and wealth management activities, allowing them to support stable dividend payments even during uncertain market conditions.
Two Canadian financial stocks that stand out right now are AGF Management (TSX:AGF.B) and Toronto-Dominion Bank (TSX:TD). Both companies offer attractive dividends backed by solid financial performance and long-term growth strategies. In this article, I’ll explain why these two financial stocks could be worth considering for income-focused investors right now.
AGF Management stock continues to reward shareholders
AGF Management is a Toronto-based asset manager with businesses across investments, private markets, and wealth management. Through these divisions, the company offers equity, fixed income, alternative, and multi-asset investment strategies to retail, institutional, and private wealth clients.
Following a 59% rally over the last 12 months, AGF stock currently trades at $16.67 per share with a market cap of roughly $1.1 billion. At current levels, the stock offers a quarterly dividend yield of 3.3%.
One reason behind AGF’s strong recent performance is its increasingly diversified business model. The company has expanded its investment capabilities and broadened its geographic reach, helping it perform well across varying market environments.
In the first quarter of its fiscal 2026 (ended in February), AGF posted free cash flow of $36 million, up 14% year over year (YoY), driven mainly by higher management, advisory, and administration fees. These fees climbed to $92.5 million as demand for the company’s investment offerings strengthened.
AGF has also been focusing on expanding its alternative investment business and introducing new investment products. With strong cash generation and growing demand for alternative investments, AGF Management looks well-positioned to continue rewarding investors over the long term.
TD Bank stock remains a dependable dividend giant
Toronto-Dominion Bank, or TD Bank, is one of North America’s largest banks, serving millions of customers through its Canadian banking, U.S. retail banking, wealth management and insurance, and wholesale banking operations.
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