US Tech Spending Outlook Rises as Europe's Weakens, Bernstein Survey Finds

A mid-year survey of chief information officers (CIOs) by Bernstein indicates that overall IT budget growth for 2026 is projected to remain robust, but reveals a stark divergence between spending outlooks in the United States and Europe. US-based CIOs have raised their spending forecasts, while their European counterparts have scaled back expectations.

Diverging Outlooks Across the Atlantic

According to the Bernstein report, US CIOs increased their full-year 2026 IT spending outlook by 60 basis points, driven by a strong performance in the first half of the year. In contrast, European CIOs trimmed their spending expectations by a significant 130 basis points following a weak start to the year.

Despite the regional split, the survey suggests overall 2026 IT budget growth is on track to match 2025 levels, approaching the strength seen during 2021. The report noted that while US expectations for the second half of 2026 have declined, European CIOs are more optimistic about a recovery in the latter half of the year.

AI and Security Dominate Priorities

CIOs identified their top three investment priorities, signaling key areas of focus for corporate technology spending:

• Cybersecurity
• Generative AI applications
• Platform software

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Artificial intelligence remains the primary strategic priority and is increasingly affecting work processes. The survey found that funding pressures for AI have eased as overall technology budgets expand and business units outside of IT contribute to AI-related spending. Enterprises show a clear preference for accessing AI through established software platforms rather than spending directly on large language model vendors like OpenAI and Anthropic.

Key Vendors and Market Implications

The concentration of new spending is expected to benefit a select group of major technology firms. Microsoft (MSFT) and Amazon Web Services (AMZN) are positioned to capture the largest share of the anticipated budget growth, according to the survey.

Other software vendors showing modestly positive allocation trends include ServiceNow (NOW) and Salesforce (CRM). In the cloud market, Microsoft Azure leads among providers, while AWS maintains broad adoption and Google Cloud (GOOGL) continues to gain market share.

A key takeaway for investors is that most CIOs do not expect AI to replace existing enterprise software or reduce long-term IT budgets. Instead, AI is viewed as a cloud-based workload best delivered through packaged solutions from incumbent vendors.