Bernstein IT Hardware: May 2026 CIO Survey Results—Perspectives on Spending Levels, AI, PCs, and Vendors
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Key Views
Cybersecurity software remains the top spending priority, with GenAI applications and storage ranking second and third. Traditional infrastructure—x86 servers, mainframes, and printers—faces the weakest outlook, while PC spending expectations softened. Only 12% of CIOs anticipate faster PC replacement cycles, and 39% are extending refresh timelines due to rising costs.
AI adoption shows encouraging signals: 75% of CIOs believe AI will significantly boost productivity, and a net 21% report AI has already changed how employees work—up meaningfully from 10% in November. However, a net 65% note AI/LLM currently represents only a small budget fraction. Model capability and hallucination rates remain the primary bottlenecks, and CIOs prefer procuring from established vendors over startups.
Recommended Securities
Bernstein maintains Outperform ratings on Seagate (STX, target $1,000), SanDisk (SNDK, $3,000), Dell (DELL, $500), and Apple (AAPL, $350). Market-Perform ratings apply to HPE ($62), HPQ ($27), IBM ($280), and SMCI ($37). Apple stands out as the sole vendor with non-negative net spending intentions across hardware and infrastructure.
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