KeyBanc’s new IT VAR survey is bullish for these stocks

Investing.com -- A new first-quarter IT VAR survey from KeyBanc Capital Markets points to a mixed but generally resilient spending environment, with several large-cap tech names emerging as beneficiaries.

Analyst Eric Heath said in a note that results from 36 IT and security channel partners were shaped by “elevated component pricing, geopolitical uncertainty, and AI disruption.”

Still, the overall percentage of partners meeting or beating plan improved to 88%, up from 81% in the previous quarter.

Heath says the net impact of higher component pricing “caused pull-forward of demand, particularly in server, storage, and networking,” while expectations for public-cloud spend slightly improved.

Based on the survey, KeyBanc highlights positive implications for several stocks, including Dell Technologies, Hewlett Packard Enterprise, Cisco Systems, Palo Alto Networks, CrowdStrike and Microsoft.

However, some caution flags emerged. The 2026 IT budget outlook moderated to 2.5%, down from 5.3% last quarter, with Heath noting the change may be tied to memory and CPU pricing and macro uncertainty.

U.S. federal spending trends also weakened, with 33% of partners now expecting declines in fiscal 2026 business.

Cloud-spending expectations remained a bright spot. Eighty-seven percent of respondents expect similar or faster growth in public-cloud usage, and partners see 55% of workloads eventually shifting to the cloud.

Security trends were “steady to slightly better,” with security VARs reporting 11.6% growth and an improved 2026 outlook.

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