CIO survey a massive boon for Microsoft – JP Morgan

JP Morgan’s latest CIO survey showed that Microsoft (NASDAQ:) is very well-positioned as tech budgets move more toward AI, a category dominated by the tech giant.

The survey, highlighting the views of 166 CIOs responsible for $123B in annual enterprise IT spending, showed that Microsoft had the top position in every major category:

• #1 in spending intentions
• #1 most critical IT mega-vendor
• #1 in Cloud Computing plans
• #1 future IaaS market share
• #1 platform for GenAI activity

“Impressively, expected future share of cloud-based GenAI activity for Microsoft and OpenAI rises y/y from 66% to 68% despite strong investment from other hyperscalers,” analysts highlighted.

Further, CIOs praised Microsoft for its “Domination in AI” and as “the underpinning of our tech stack.”

Analysts at the firm highlighted that while AI spending surges, other tech efforts are being defunded.

“CIOs indicate they currently spend 5% of their IT budgets on AI-accelerated compute hardware, and see this rising at a mid40s CAGR to 14.5% of their IT budgets in the next 3 years,” analysts stated. “As organizations work to formulate their GenAI roadmaps, 33% of CIOs are Defunding other projects, with legacy systems/upgrades and infrastructure taking the biggest hit. Still, 62% of CIOs are Not Defunding other projects, which suggests a majority of AI investments will be fueled by incremental funding.”

In addition to Microsoft, the best-performing companies in the firm’s survey across multiple categories included Amazon AWS (NASDAQ:), Google (NASDAQ:), CrowdStrike (NASDAQ:), ServiceNow (NYSE:), and Salesforce (NYSE:). SAP (SAP) and Zscaler received “honorable mentions”. Meanwhile, Confluent (CFLT), Zoom Video (NASDAQ:), Oracle (NYSE:), and IBM (NYSE:) were “underperforming vendors.”