IT Executives Survey Signals Budget Growth in 2026
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Source: seekingalpha
- Accelerated Software Budget Growth: Jefferies' survey indicates a projected 6.2% increase in software budgets for 2026, up from 4.8% in 2025, with 83% of respondents expecting budget increases, highlighting strong demand despite negative investor sentiment.
- Stable Cybersecurity Spending: Cybersecurity budgets are expected to grow by 6.2% year-over-year in 2026, slightly below 6.6% in 2025, with 90% of CIOs anticipating increased spending, underscoring the continued priority of security.
- Rising Cloud Expenditure: CIOs expect cloud spending to rise by 10.1% in 2026, compared to 9.6% in 2025, with 95% of respondents forecasting budget increases, reflecting robust demand for cloud services.
- AI Budget Allocation Insights: Approximately 68% of CIOs now have dedicated AI budgets, with around 11% of overall IT budgets allocated to AI, and 73% of respondents noting that API spending is tracking above initial expectations, indicating a positive trend in AI investment.
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Analyst Views on MSFT
Wall Street analysts forecast MSFT stock price to rise
34 Analyst Rating
32 Buy
2 Hold
0 Sell
Strong Buy
Current: 352.830
Low
500.00
Averages
631.36
High
678.00
Current: 352.830
Low
500.00
Averages
631.36
High
678.00
About MSFT
Microsoft Corporation is a technology company. The Company develops and supports software, services, devices, and solutions. The Company’s segments include Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. The Productivity and Business Processes segment consists of products and services in its portfolio of productivity, communication, and information services. This segment primarily comprises: Office Commercial, Office Consumer, LinkedIn, and Dynamics business solutions. The Intelligent Cloud segment consists of server products and cloud services, including Azure and other cloud services, SQL Server, Windows Server, Visual Studio, System Center, and related Client Access Licenses (CALs), and Nuance and GitHub; and Enterprise Services, including enterprise support services, industry solutions and Nuance professional services. The More Personal Computing segment primarily comprises Windows, Devices, Gaming, and search and news advertising.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Market Context: This price hike follows a previous increase of $20 to $70 for Xbox consoles in the U.S. last October, highlighting the pressures faced by the consumer electronics industry due to component shortages, particularly affecting gaming consoles that are often sold at or below manufacturing costs.
- Consumer Support Initiatives: In response to the price increases, Microsoft has introduced several programs aimed at improving affordability, including expanded buy-now-pay-later options through Microsoft Stores, interest-free financing for eligible hardware purchases via Amazon, trade-in programs for used consoles through retail partners, and discounted certified refurbished consoles to mitigate the impact of rising prices.
- Product Line Changes: Microsoft confirmed the discontinuation of its 2TB console model while maintaining the Xbox Series S as the lowest-priced console option for players, ensuring that diverse consumer needs are met even amid price increases.
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- Lockup Period Risks: SpaceX's staggered lockup period is set to end on December 8, 2026, with the first selling window opening after the Q2 2026 earnings release, which could exert downward pressure on the stock as many employees may want to sell shares to lock in gains.
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- Long-Term Returns: Analysis by Crestmont Research shows that the S&P 500 has ended every 20-year period with positive returns, indicating that investors holding the index fund through market volatility are likely to profit, enhancing its appeal as a stable investment option.
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- Accelerated Software Budget Growth: Jefferies' survey indicates a projected 6.2% increase in software budgets for 2026, up from 4.8% in 2025, with 83% of respondents expecting budget increases, highlighting strong demand despite negative investor sentiment.
- Stable Cybersecurity Spending: Cybersecurity budgets are expected to grow by 6.2% year-over-year in 2026, slightly below 6.6% in 2025, with 90% of CIOs anticipating increased spending, underscoring the continued priority of security.
- Rising Cloud Expenditure: CIOs expect cloud spending to rise by 10.1% in 2026, compared to 9.6% in 2025, with 95% of respondents forecasting budget increases, reflecting robust demand for cloud services.
- AI Budget Allocation Insights: Approximately 68% of CIOs now have dedicated AI budgets, with around 11% of overall IT budgets allocated to AI, and 73% of respondents noting that API spending is tracking above initial expectations, indicating a positive trend in AI investment.
See More
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- Pressure on S&P 500: The S&P 500 (SPY) logged 15 down days in June, suffering the most from the 'rotation' effect among the three major benchmarks, particularly as multi-day declines in mega-caps like Microsoft, Nvidia, and Apple disrupted its daily momentum.
- Volatility and Options Trading: The swift pullback in the Nasdaq has pushed QQQ's implied volatility (IV) rank above 91%, meaning options have been this expensive less than 10% of the time in the past 52 weeks, presenting significant trading opportunities for option sellers.
- Options Strategy Implementation: By selling the QQQ $690 put and buying the $670 put, investors can collect $5.50, but face a risk of $14.50 if QQQ closes below $670 on July 17, 2026, highlighting the high-risk nature of the current market environment.
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- Price Increase Details: Microsoft announced that starting August 1, prices for Xbox consoles will rise by $100 for the 512GB model and $150 for the 1TB model, reflecting a sharp increase in storage and memory component costs, which are expected to rise further by late 2027.
- Market Context: This price hike follows a previous increase of $20 to $70 for Xbox consoles in the U.S. last October, highlighting the pressures faced by the consumer electronics industry due to component shortages, particularly affecting gaming consoles that are often sold at or below manufacturing costs.
- Consumer Support Initiatives: In response to the price increases, Microsoft has introduced several programs aimed at improving affordability, including expanded buy-now-pay-later options through Microsoft Stores, interest-free financing for eligible hardware purchases via Amazon, trade-in programs for used consoles through retail partners, and discounted certified refurbished consoles to mitigate the impact of rising prices.
- Product Line Changes: Microsoft confirmed the discontinuation of its 2TB console model while maintaining the Xbox Series S as the lowest-priced console option for players, ensuring that diverse consumer needs are met even amid price increases.
See More
SpaceX IPO Sparks Market Debate Over Valuation
- IPO Fundraising Scale: SpaceX's IPO raised approximately $75 billion, making it the largest and arguably most controversial IPO in history; despite briefly surpassing Microsoft and Amazon in market cap, its profitability remains a concern.
- Valuation Issues: With a market cap exceeding $2 trillion and trading at $135, SpaceX reported a net loss of $4.9 billion in 2025 against revenues of $18.7 billion, resulting in a staggering price-to-sales ratio of 109, making it the most expensive megacap stock.
- Lockup Period Risks: SpaceX's staggered lockup period is set to end on December 8, 2026, with the first selling window opening after the Q2 2026 earnings release, which could exert downward pressure on the stock as many employees may want to sell shares to lock in gains.
- Market Outlook: While SpaceX commands an 80% share of the U.S. commercial launch market and Starlink generated $11.4 billion in revenue, the high valuation and impending lockup period suggest it may be wiser to keep it on a watch list rather than buy immediately.
See More
Market Volatility and Investment Strategy
- Market Fluctuations: Recently, the S&P 500 dropped about 2% and the Nasdaq Composite fell nearly 3.5%, indicating that while short-term fluctuations are normal, investor concerns about a potential tech bubble necessitate vigilance against volatility.
- Vanguard ETF Advantage: Launched in 2010, the Vanguard S&P 500 ETF tracks the S&P 500, boasting a nearly 715% total return over the past 26 years, demonstrating resilience through multiple market crashes and economic downturns, making it a suitable long-term investment.
- Long-Term Returns: Analysis by Crestmont Research shows that the S&P 500 has ended every 20-year period with positive returns, indicating that investors holding the index fund through market volatility are likely to profit, enhancing its appeal as a stable investment option.
- Tech Stock Risks: While tech stocks have propelled the S&P 500 upward, the
See More
Dow Jones Index Outperforms Amidst Broader Market Sell-off
- Dow Jones Gains: As of midday Friday, the Dow Jones Industrial Average rose about 0.3%, with a 1% increase for the week, demonstrating resilience amidst broader market declines and reflecting ongoing investor confidence in traditional sectors.
- Microsoft Drives Market: Microsoft shares surged 4.9% on Friday, contributing 107 points to the Dow and adding $136 billion to its market cap, highlighting the positive impact of its strong performance in the tech sector on the overall market.
- Large Cap Pullback: Caterpillar and Goldman Sachs fell 4.1% and 2.8%, respectively, dragging the Dow down by 270 and 182 points, indicating their sensitivity to macroeconomic changes, with a combined weighting of 25.1% in the index.
- Oil Price Decline Impact: The United States Oil Fund dropped 4.1% on Friday as Brent crude approached $73, signaling market expectations for Iranian oil re-entering the market, which negatively affects heavy equipment demand and contributed to Caterpillar's stock decline.
See More
IT Executives Survey Signals Budget Growth in 2026
- Accelerated Software Budget Growth: Jefferies' survey indicates a projected 6.2% increase in software budgets for 2026, up from 4.8% in 2025, with 83% of respondents expecting budget increases, highlighting strong demand despite negative investor sentiment.
- Stable Cybersecurity Spending: Cybersecurity budgets are expected to grow by 6.2% year-over-year in 2026, slightly below 6.6% in 2025, with 90% of CIOs anticipating increased spending, underscoring the continued priority of security.
- Rising Cloud Expenditure: CIOs expect cloud spending to rise by 10.1% in 2026, compared to 9.6% in 2025, with 95% of respondents forecasting budget increases, reflecting robust demand for cloud services.
- AI Budget Allocation Insights: Approximately 68% of CIOs now have dedicated AI budgets, with around 11% of overall IT budgets allocated to AI, and 73% of respondents noting that API spending is tracking above initial expectations, indicating a positive trend in AI investment.
See More
Significant Divergence in U.S. Equity Markets
- Market Performance Divergence: While the Dow Jones Industrial Average reaches all-time highs, the tech-heavy Nasdaq 100 (QQQ) has experienced significant volatility with 13 down days in June, indicating extreme instability in market sentiment.
- Pressure on S&P 500: The S&P 500 (SPY) logged 15 down days in June, suffering the most from the 'rotation' effect among the three major benchmarks, particularly as multi-day declines in mega-caps like Microsoft, Nvidia, and Apple disrupted its daily momentum.
- Volatility and Options Trading: The swift pullback in the Nasdaq has pushed QQQ's implied volatility (IV) rank above 91%, meaning options have been this expensive less than 10% of the time in the past 52 weeks, presenting significant trading opportunities for option sellers.
- Options Strategy Implementation: By selling the QQQ $690 put and buying the $670 put, investors can collect $5.50, but face a risk of $14.50 if QQQ closes below $670 on July 17, 2026, highlighting the high-risk nature of the current market environment.
See More
