Investing.com -- Bernstein's mid-year CIO survey reaffirmed expectations for strong IT budget growth in 2026, with growth similar to 2025 and rivaling the strength seen during the COVID-era rebound in 2021, according to a note from analyst Peter Weed on Wednesday.

Weed told investors that regional spend expectations "sharply diverged," with full-year 2026 U.S. budget growth expectations rising 60 basis points, offsetting sharp weakness in Europe, where expectations fell 130 basis points.

U.S.-based CIOs anticipate weaker second-half spending after a very strong first half, while European CIOs "are more optimistic into the 2nd half, after a weak H1."

Cybersecurity, GenAI applications and platform software remain the top three investment priorities for CIOs, Bernstein said, with incremental spending concentrated among hyperscalers.

Microsoft and AWS are expected to capture the largest share of budget growth, while ServiceNow and Salesforce were the only other software vendors seeing modestly positive allocation trends.

Bernstein noted that CIOs do not expect to increase spending on LLM vendors such as OpenAI and Anthropic, "reinforcing the view that enterprises prefer consuming AI through established software platforms rather than building capabilities in-house."

Cloud adoption continues to rise, with enterprise strategies becoming "more bifurcated" between deeper cloud investment and maintaining significant on-premises environments, according to Bernstein. Microsoft Azure remains the clear leader among cloud providers, while Google Cloud continues gaining share.

Bernstein said most CIOs do not expect AI to replace enterprise software, reduce long-term IT budgets, or drive a shift from software spending toward hardware investments.