A recent survey of 40 corporate executives on cybersecurity spending by investment bank Jefferies reveals positive indicators for Palo Alto Networks (PANW.US), CrowdStrike Holdings, Inc. (CRWD.US), Zscaler (ZS.US), Okta (OKTA.US), and SailPoint (SAIL.US).
A team led by analyst Joseph Gallo stated, "Our survey data indicates: 1) Cybersecurity budgets are not expected to see a significant inflection point in 2026 (growth projected around 6%, roughly in line with IT/software budget growth); 2) AI/machine learning (AI/ML) spending is an absolute focal point, which we believe will be a long-term positive catalyst for the cybersecurity industry, with security expected to be a beneficiary in the next phase; 3) Threat intelligence, cloud security, and identity management are poised to be the biggest winners in the generative AI era."
The findings support their view that identity management will be the first and largest beneficiary within cybersecurity, with corresponding beneficiaries including Palo Alto Networks, Okta, and SailPoint.
The analysts surveyed Chief Information Officers (CIOs) on whether they anticipate increasing or decreasing spending on products and services from Palo Alto Networks, CrowdStrike Holdings, Inc., and Zscaler.
They noted that Palo Alto Networks appears set to be the biggest winner in corporate spending for 2026, with 56% of respondents expecting to increase spending, though this is down from 66% in a December 2025 survey.
For CrowdStrike Holdings, Inc., spending expectations remain positive but have become more neutral compared to last December, with 44% of respondents expecting to increase spending (down from 60% in December 2025).
Furthermore, Zscaler's 2026 spending outlook improved further, with 43% of respondents expecting to increase spending, up from 38% in December 2025.
The analysts pointed out that cybersecurity budget growth is expected to continue aligning with software and IT budgets.
Surveyed CIOs anticipate cybersecurity budgets to grow 6.2% year-over-year in 2026, slightly below the 6.6% growth in 2025.
Concurrently, software and IT budgets are also projected to grow 6.2% year-over-year each, matching the cybersecurity growth rate.
While this outcome is slightly disappointing as it suggests no near-term acceleration in security budgets, the analysts noted that cybersecurity remains the second-highest priority for increased software spending in 2026, second only to AI.
When asked which type of technology vendor would benefit most from the proliferation of AI applications, cloud service providers received 38% of the vote, while cybersecurity vendors received only 13%.
The analysts believe that until companies develop more concrete internal AI application and spending plans, identify which security areas are most critical, and finalize future pricing models, they are unlikely to fully secure their AI architectures.
"We view the survey's continued highlighting of the importance of AI tools and features as a positive for cybersecurity (as new tools/features ultimately require security)," the analysts said. "However, while the clear uptick in customer interest post-Mythos (evidenced by accelerated inquiries and trials) reinforces our belief that security spending must increase, we believe—and the survey supports this—that this will be a gradual trend, with its full-scale manifestation not expected until calendar 2027 and beyond."
Additionally, the analysts noted that within cybersecurity, threat intelligence, cloud security, and identity & access management are expected to be the product areas most driven by generative AI in 2026, while hardware products are projected to benefit the least.
Meanwhile, Secure Access Service Edge (SASE) saw the most significant change, with the percentage of respondents ranking it among the top three beneficiary areas nearly doubling from 13% to 23%.
The analysts concluded, "Security remains the most important factor for enterprises when choosing a cloud service provider, which is a positive for vendors like CrowdStrike Holdings, Inc., Palo Alto Networks, and Zscaler. Cloud computing spending growth is expected to increase modestly from an average year-over-year growth of 9.6% in 2025 to 10.1% in 2026, which should continue to support cloud security demand in the near term."
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