There are way more Legos on the ground ready to inflict pain on feet around the world, with the toymaker reporting yesterday that its revenue surged 21% in the first half of the year. The Danish company’s operating profit jumped 22% as sets designed for both kids and their parents continued to fly off shelves.

Lego’s sales growth outpaced the wider US toy market’s, which jumped 17% for its strongest six months in six years, Circana found. Rival toymakers Mattel and Hasbro have also reported sales growth so far this year, but Lego outpaced both.

Still, Lego is only human, and it very much intends to stay that way. Its CEO attributes its success, at least in part, to its decision to rely on human creativity in an AI age.

AI Just Doesn’t Get It, Says Lego

Just like stepping on the sharp blocks is a purely human experience, so too is designing Lego’s brick sets. And that’s intentional. Lego’s data suggests algorithms can’t emotionally or tactilely connect with kids. So the company doesn’t allow AI to help with product design, Lego CEO Niels Christiansen said:

• Lego’s human designers debuted more than 330 new sets in the first half of this year. The company lets employees use AI for less creative tasks, like admin, with the aim of freeing designers’ time to think about the next botanical set (a string-of-pearls plant maybe?).
• Competitors, meanwhile, aren’t as AI-averse. Mattel partnered with OpenAI last year to create toys using AI, but in December delayed plans to release any. Hasbro in June launched an AI studio called Sixth Wall, where it’s creating AI versions of characters including Mr. Potato Head (don’t ask him who Andy’s favorite toy is).

Lego’s No Luddite: Lego’s not ignoring the digital dimension, however. Its partnership with Fortnite-maker Epic Games brings Lego designs into the video game and Fortnite avatars and items (hello, Lego Supply Llama) into the physical world. The toymaker also launched a digitized version of its plastic blocks this year that uses sensors to react to motion with lights and sounds, like a birthday cake that plays a song when its candles are “blown out.”

Netflix stock has tumbled 40% from a peak last summer, but one analyst is arguing that Wall Street, much like the final season of Stranger Things, has officially lost the plot.

Shares of the company leapt almost 3% on Tuesday after Wolfe Research analyst Peter Supino upped his price target for the company to $95. Supino argued that investors are overreacting to lackluster engagement data sparked by an uncharacteristically soft second-quarter release schedule. And recent reports suggest that Netflix is looking to get more and more premium content on its platform.

Third-Party Down

Overall viewing hours increased a mere 2% in the first half of the year, Netflix said in its engagement report earlier this summer. That prompted fears that the Binge Watch era will not simply run on auto-play forever, a distressing turn for a streamer that sees advertising as the key to continued growth. Making matters worse, Netflix deepened Wall Street’s fears by cutting its bi-annual engagement reports down to just one a year, and reports surfaced that executives were troubled by lackluster viewership for returning shows.

According to Supino, the reaction was overblown. “After analyzing millions of data points from Netflix’s viewing history, we believe the timing of new content releases was largely to blame for soft 2Q subscriber and engagement results,” he wrote. The schedule for the rest of the year is looking bright, he argued. Meanwhile, the company continues to enjoy a massive subscriber lead over its competitors, allowing for margins that remain fatter and juicier than a prime roast of brisket from the Texas barbecue episodes of Chef’s Table.

And a recent report by The New York Times showed Netflix executives are thinking big to tackle the engagement question:

• Sources told the NYT that Netflix execs have discussed making competing streaming services, such as Peacock and Fox One, directly available on its platform. In June, Netflix essentially integrated French broadcaster TF1 directly into its service within the market.
• It all mirrors a strategy used by Amazon and Roku, which allow for add-ons to some streaming competitors within their platforms, as well as YouTube, which will soon offer Peacock within its Premium subscription tier. Roughly 33% of all new streaming subscriptions are now purchased within larger third-party platforms, market data platform Antenna told the NYT.

I Will Find YouTube: In the meantime, as Netflix turns vanquished foes into commodities, it’s still locked in eternal warfare with its true rival: YouTube. After Netflix poached some high-profile podcasters and media channels earlier this year, YouTube is offering millions of dollars to top creators in exchange for at least a certain window of exclusivity, Bloomberg reported last week. In other words, expect a “Last Dab”-level extra hot bidding war for “Hot Ones.”

You cannoli take so many holidays per year. United Airlines is banking on you picking Sicily.

The Chicago-based carrier, which already offers more international routes than its US rivals, announced three new routes and 10 new destinations on Tuesday, including Catania on Italy’s largest island. Billed as United’s biggest network expansion ever and set to take off in spring 2027, the move highlights how America’s two most profitable airlines are duking it out to attract increasingly globally minded US tourists.

What Do You Have Toulouse?

United has added more than 60 international destinations in the past decade, expanding into less-frequented places like Mongolia, Senegal and Greenland. That global network has proven valuable post-pandemic, with more Americans heading abroad to experience global culture and humblebrag about it on Instagram. National Travel and Tourism Office data shows the number of trips by US citizens abroad was 9.9 million in May, up 4.2% from a year ago. The most common destination after Mexico was Europe, accounting for 26% of departures.

No surprise, then, that United’s latest expansion targets the Old Continent. In addition to Catania, the airline is adding flights from Newark to Slovenian capital Ljubljana, Valencia and the Balearic island Ibiza in Spain, Terceira in Portugal’s Azores islands, Olbia on the Italian island Sardinia and the French seaport of Marseille. A new business route from Newark will fly to financial center (and tax haven, ahem) Luxembourg, while another will connect Washington, D.C., and Toulouse, France. Three direct flights to existing destinations are also being added: Los Angeles will connect with Osaka, Washington, D.C., with Milan, and Denver with Paris. Finally, United is adding a route from San Francisco to Okinawa, Japan. Each one marks a new frontier in a battle with United’s top rival:

• United reported $3.4 billion in profit last year, making it America’s most profitable carrier after Delta, which made $5 billion. But United’s international network, which spans 150 destinations in 75 countries, is the envy of Delta, which has over 100 in 65.
• Earlier this summer, Delta President Peter Carter told CNBC that Delta wants to overtake United’s trans-Pacific dominance at the same time that it launched new routes to Asia.

Time Travel: The business route to Toulouse, home to the headquarters of aircraft manufacturer Airbus, connects the US capital to a major global aerospace hub and a key United partner. Many of the new routes will use new Airbus A321XLR aircraft, which the airline ordered 50 of in 2019 with the expectation that they would begin flying this year.