CIO survey shows 2026 IT spending remains resilient, AI adoption is improving, and traditional hardware remains under pressure

Overview

This report summarizes Bernstein’s May 2026 survey of 100 U.S. and European Global 1000 CIOs, covering IT spending levels, AI/LLM adoption, the PC market, cloud adoption, traditional infrastructure, and CIO perceptions of key IT and cloud vendors. The overall conclusion is that 2026 IT spending remains resilient, AI adoption signals have improved, but enterprises still remain cautious on on-prem AI servers, PC purchases, and traditional infrastructure spending.

Core views

Key views include: first, CIOs remain constructive on 2026 IT spending, with the U.S. more optimistic than Europe; second, cybersecurity software, generative AI applications, and storage are the top-priority spending areas, while x86 servers, mainframes, and printers are among traditional categories with weaker spending intent; third, AI/LLM has moved beyond pure exploration and is starting to show real productivity and workflow impact, but the current budget share remains small and may crowd out some traditional IT projects in the near to medium term; fourth, the PC market may be pressured on unit shipments, with ASPs potentially supported by memory and component pass-through and higher configurations; fifth, public cloud remains important, and AI has not clearly driven workloads to return to enterprise-owned infrastructure.

Analysis framework

The report uses a mix of CIO questionnaire research, historical survey comparisons, macroeconomic indicator linkage, and vendor spending-intent analysis. The sample consists of 100 CIOs from U.S. and European Global 1000 companies with average company revenue of about $6.5 billion; the report compares May 2026 results with Nov 2025 and May 2025 historical surveys and combines this with GDP, corporate earnings, historical IT hardware cycles, and vendor rating tables to derive investment implications.

Methodology notes

• Survey researchCIO Survey

  Measuring IT demand direction through enterprise CIO spending intent

  The report assesses IT budgets, AI adoption, cloud migration, PC refresh cycles, and vendor preference via CIO respondents from large U.S. and European enterprises, emphasizing that CIO surveys are useful for directional shifts in demand, but have limited ability to predict absolute spending levels.

• Macroeconomic linkageGDP and corporate earnings correlation analysis

  IT spending is linked to the health of the economy

  The report compares global IT spending with real GDP and S&P 500 earnings growth and argues that stable GDP and improving corporate earnings expectations support 2026 IT spending growth, while economic slowdowns would pressure IT budgets.

• Vendor comparisonNet spending intent and vendor perception

  Using CIO net spending intent to compare hardware, cloud, and software vendors

  The report compares the perceived position of suppliers such as Apple, Dell, IBM, HPQ, HPE, Microsoft, Amazon, and ServiceNow in hardware, cloud, software, and AI platforms to infer likely beneficiaries and pressured participants.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• SERVICENOW INC / NOW.US

  Mentioned as one of the better-ranked companies among cloud and software suppliers.

  Strengths

  Ranks near the top in cloud and software vendor perception, benefiting from demand for software, automation, and AI workflow use within enterprise IT budgets.

  Weaknesses

  The report does not disclose NOW’s rating, target price, or financial forecasts; the report’s core coverage is more focused on IT hardware and CIO spending themes.

  Comparison

  Alongside Microsoft and Amazon as part of the top tier of CIO-recognized cloud and software vendors.

  Risks

  If enterprise AI budgets remain small or consulting and digital transformation projects slow, software procurement pace may underperform expectations.

• Microsoft / OpenAI

  Seen as a long-term leader in AI platforms.

  Strengths

  CIOs view Microsoft and OpenAI as leading long-duration AI platforms; stronger appetite for cloud deployment of AI workloads supports their ecosystems.

  Weaknesses

  The report is mainly an IT hardware survey and does not provide standalone financial valuation.

  Comparison

  Perception of AI platform leadership is stronger than that of most traditional hardware suppliers.

  Risks

  Model capability, hallucination rates, and enterprise implementation speed remain adoption bottlenecks.

• Amazon

  Ranked highly in CIO perception among cloud and software suppliers.

  Strengths

  Public cloud remains meaningful, and multi-cloud as well as cloud-based AI workloads support demand for cloud vendors.

  Weaknesses

  CIO agreement that cloud delivers cost savings has weakened, and the growth pace of cloud adoption shows noise.

  Comparison

  Along with Microsoft and ServiceNow, Amazon is among CIOs’ stronger perceived cloud and software suppliers.

  Risks

  A slowdown in cloud spending growth or rising cost sensitivity could weaken top-line expectations.

• Apple / AAPL

  Listed by Bernstein as a preferred IT hardware name with an Outperform rating.

  Strengths

  The only vendor with non-negative net spending intent in five-year hardware and infrastructure intent, and it may benefit from the trend toward higher-configured PCs.

  Weaknesses

  Unit PC demand is expected to weaken, and component costs may pressure terminal demand.

  Comparison

  Compared with traditional hardware names such as HPQ, HPE, and IBM, Apple has stronger CIO spending intent.

  Risks

  Longer PC refresh cycles and AI PC demand below expectations.

• Dell / DELL

  Listed by Bernstein as a preferred IT hardware name with an Outperform rating.

  Strengths

  Performs better than many infrastructure peers, with improved spending intent versus prior surveys and potential upside from AI infrastructure buildout.

  Weaknesses

  Enterprise spending on on-prem AI servers remains cautious, and spending intent for traditional server categories is weak.

  Comparison

  Compared with infrastructure peers such as HPE, IBM, and HPQ, Dell appears stronger.

  Risks

  If AI infrastructure enters a post-overbuild digestion phase, incremental investment could be pressured.

• Seagate / STX and SanDisk / SNDK

  Listed by Bernstein as preferred IT hardware names with Outperform ratings.

  Strengths

  Storage is the third-highest CIO hardware spending priority, and AI plus data growth could support storage demand.

  Weaknesses

  Hardware cycles and component price volatility can still cause earnings fluctuations.

  Comparison

  They are in the same preference set as Apple and Dell.

  Risks

  If IT spending or cloud CapEx slows, storage demand could underperform expectations.

• IBM / HPQ / HPE / SMCI

  Market-Perform names or traditional hardware-related names with pressured spending intent in the report.

  Strengths

  Some supplier intent improved versus prior surveys; SMCI and HPE may still have links to AI server demand.

  Weaknesses

  IBM’s net spending intent is deeply negative and deteriorating; HPQ and HPE remain negative; spending intent for mainframes, printers, and x86 servers is weak.

  Comparison

  Overall weaker than preferred names such as Apple, Dell, and storage names.

  Risks

  Structural decline in traditional infrastructure, weakening PC demand, prolonged pressure on print volumes, and volatility in AI server demand.

Key data

• Survey sample100 CIOsThe sample comes from U.S. and European Global 1000 companies, with average revenue of about $6.5 billion.
• 2026 CIO IT spending growth expectation3.3%Similar to the Nov 2025 survey expectation for 2026; about 4% in the U.S. and about 1.8% in Europe.
• Bernstein 2026 global IT spending forecast12% YoY, in constant currencyRaised from 9% in January, supported by stable GDP and improved corporate earnings expectations.
• 2026 S&P 500 earnings growth expectation24.4%A significant improvement from the prior Nov 2025 analysis of 15.3%.
• AI productivity expectation75% of CIOs agreeCIOs believe AI will significantly improve productivity over the long term.
• Net share of AI changing ways of working+21%Higher than Nov 2025’s 10% and May 2025’s 1%, indicating adoption effects are starting to become visible.
• AI/LLM budget shareNet 65% think still very smallShows AI importance is rising, but it is not yet a major driver of most enterprises’ IT budgets.
• AI workload cloud preference75% agree, 3% disagreeCIOs broadly believe AI/LLM workloads are likely to be hosted in the cloud or outside the enterprise.
• PC refresh-cycle pressure39% of CIOs extending PC refresh cyclesMainly due to higher component costs such as memory; 30% disagree with this view.
• PC configuration upgrade expectation53% of CIOs agreeAlthough unit demand is under pressure, richer configurations may support ASPs.
• Importance of public cloud usage64% of CIOs agree cloud is used materiallyLargely flat versus the prior survey round.
• Cloud-first or SaaS-first policy74% of CIOs agreeBelow the Nov 2025 peak of 78%, but still at a high level.
• Perception of cloud cost savings34% of CIOs agreeHas declined from 48% in 2019, but 81% still see cloud as attractive beyond pure cost considerations.

Impact & implications

From an investment perspective, the report supports a constructive stance toward long-term AI infrastructure buildout, cloud platforms, and highly perceived enterprise software suppliers, while cautioning on structural or cyclical pressure in traditional hardware, printers, mainframes, x86 servers, and PC unit demand. Within hardware, preference is skewed toward names benefiting from AI infrastructure demand, storage cycles, or higher-end configuration upgrades. In enterprise software and cloud, Microsoft, Amazon, and ServiceNow have strong CIO perception rankings, but the report does not provide a separate valuation conclusion for NOW.

Risks

• Economic deceleration would impact IT spending; historically, IT spending has correlated with GDP and corporate earnings.
• AI/LLM still accounts for a small share of budgets, and in the near to medium term it may displace some traditional IT projects rather than fully add to budgets.
• Model capability and hallucination rates remain barriers to enterprise AI adoption.
• If AI infrastructure becomes overbuilt, the market may move into a digestion period.
• Rising PC component costs may lengthen refresh cycles and suppress unit demand.
• Perceived cloud cost savings have weakened, which may affect cloud adoption pace.
• European CIOs are more cautious than U.S. CIOs, and regional divergence may dampen aggregate demand.

What to watch

• Whether 2026 second-half IT spending expectations continue to trail full-year expectations.
• The pace of AI/LLM moving from exploration to production deployment, and whether AI truly expands total IT budgets.
• How model capability, hallucination rates, and enterprise preference for off-the-shelf AI solutions are evolving.
• Whether PC memory costs, ASP pass-through, and AI PC configuration upgrades can offset unit demand declines.
• Whether cloud workloads continue to stay in public cloud or see a material shift back to on-premise infrastructure.
• Order, inventory, and margin trends for preferred names such as Apple, Dell, Seagate, and SanDisk.
• Whether net spending intent improves for traditional or AI-server-related names such as IBM, HPQ, HPE, and SMCI.