Morgan Stanley: 1Q26 CIO Survey on Networking Equipment

Morgan Stanley's first-quarter 2026 CIO survey reveals stable communications spending growth expectations of 2.2%, a 7-basis-point acceleration from the fourth quarter of 2025. Networking equipment improved its priority ranking to sixth overall and climbed to third in defensiveness, while security software remained the most defensive category. The replacement cycle for networking equipment has shortened across the board. Data center and campus switch replacement cycles reached their shortest levels since October 2016, with data center switches declining from 4.8 to 4.6 years and campus switches from 5.2 to 4.7 years. Spending intentions for Cisco improved significantly, with a net 57% of CIOs anticipating increased spending over the next three years, up notably from 25% previously. Arista Networks saw spending intentions normalize to a net 29%, though this still exceeds historical survey levels, supported by robust data center switch momentum. F5 maintained positive but more mixed momentum, as cloud migration preferences among traditional vendors weakened. Macro pressures appear to be easing, with the percentage of CIOs delaying or cancelling projects due to macro factors dropping from 41% to 27%. However, 24% of CIOs are now front-loading orders. Pricing remains a focal point, as 85% of CIOs reported network equipment price increases, and a further hike could prompt 37% to delay purchases.