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Investing.com -- Global IT spending growth expectations have moderated, with cybersecurity regaining the top spot among CIO investment priorities, according to Citi’s latest CIO Survey.
Based on responses from 101 executives, the outlook for global IT budgets over the next 12 months (NTM) dipped to 2.1%, down from 2.5% in the March survey.
The slowdown was largely driven by a weaker European outlook, where expected growth dropped sharply to 0.6% from 2.3%, while U.S. budgets remained more resilient, inching up to 2.8%.
“We note that on average, respondents have revised down NTM IT budgets by 2% due to tariff impacts,” Citi analysts led by Tyler Radke noted.
Despite the slight deceleration in overall IT budgets, cybersecurity spend is re-accelerating.
“Cyber quickly reclaimed top rank among CIO investment priorities,” Citi noted, with next-twelve-month (NTM) cyber budgets rising to approximately 6.1% from 5.3% last quarter.
The report points out that although fewer respondents expect tariffs to hurt IT budgets overall, a larger share of those who do see a negative impact identified cybersecurity as a key area affected by tariffs.
These trends, coupled with broader GenAI-driven IT investments, continue to support cybersecurity spending.
Analysts say that “while cyber dollars are resilient with potential growth catalysts, spend will likely be further allocated towards platform vendors, players with a clear ‘security for AI’ strategy, and those that can offer tariff insulation.”
In the GenAI space, CIOs continue to favor Microsoft (NASDAQ:MSFT), followed by OpenAI, Amazon (NASDAQ:AMZN), and Google (NASDAQ:GOOGL).
Spending on GenAI projects is expected to rise by 12% over the coming year. However, most use cases remain in early stages, with 37% in testing and only 18% in production, reflecting a cautious ramp-up.
While cybersecurity gained ground, data analytics and GenAI dropped to the second position in the list of CIO priorities, followed by digital transformation and customer-facing application development.
Concerning sub-segments, Endpoint and cloud security remain top priorities, with network security notably rising to the highest-ranked top priority among CIOs.
Identity security also saw increased prioritization, reflecting growing awareness of GenAI-related risks and new identity threat vectors.
Meanwhile, spending in areas like security analytics and data security softened as CIOs delayed modernization initiatives amid vendor overlap and implementation complexity.