Network security budget continues to increase steadily! Jefferies Financial Group Inc. mentioned beneficiaries such as Palo Alto Networks (PANW.US) and CrowdStrike (CRWD.US).

Investment bank Jefferies Financial Group Inc. conducted a cybersecurity spending survey of 40 corporate executives, showing that Palo Alto Networks (PANW.US), CrowdStrike (CRWD.US), Zscaler (ZS.US), Okta (OKTA.US), and SailPoint (SAIL.US) have all received some positive signals. Led by analyst Joseph Gallo, the team stated, "Our survey data shows: 1) There does not appear to be a significant turning point in cybersecurity budgets in 2026 (expected growth rate of about 6%, consistent with IT/software budget growth); 2) AI/machine learning (AI/ML) spending has become a focal point, which we believe will be a long-term positive catalyst for the cybersecurity industry, with cybersecurity expected to be a beneficiary in the next phase; 3) Threat intelligence, cloud security, and identity management will be the biggest winners in the age of generative AI. Survey results support our view that identity management will be the first and biggest beneficiary in the cybersecurity sector, with beneficiaries including Palo Alto Networks, Okta, and SailPoint." Analysts surveyed Chief Information Officers (CIOs) in enterprises to understand whether they expect to increase or decrease spending on products and services from Palo Alto Networks, CrowdStrike, and Zscaler. Analysts stated that Palo Alto Networks appears to be the biggest winner of enterprise spending in 2026, with 56% of respondents expecting to increase related spending, although lower than the 66% in the survey in December 2025. For CrowdStrike, spending expectations are still somewhat positive, but have become more neutral compared to last December, with 44% of respondents expecting an increase in spending (compared to 60% in December 2025). Additionally, Zscaler's spending expectations for 2026 have improved further, with 43% of respondents expecting an increase in spending, compared to 38% in December 2025. Analysts pointed out that cybersecurity budget growth is expected to continue to align with software and IT budgets. Interviewed CIOs expect cybersecurity budgets to grow by 6.2% year-on-year in 2026, slightly lower than the 6.6% in 2025. At the same time, software and IT budgets are expected to grow by 6.2% and 6.2% year-on-year, respectively, staying in line with cybersecurity budget growth. Analysts stated that while this result is somewhat disappointing indicating that there will not be a significant acceleration in cybersecurity budgets in the short term it is worth noting that in 2026, cybersecurity still ranks second in software areas where CIOs are most likely to increase spending, second only to AI. When asked which type of technology supplier will be the biggest beneficiary as AI applications become more widespread, survey results showed that cloud service providers received 38% of the votes, while cybersecurity suppliers only received 13% of the votes. Analysts believe that until companies have developed more specific internal AI application and spending plans, clearly identified which cybersecurity areas are most important, and defined future pricing models, companies are unlikely to fully optimize AI architecture security measures. Analysts stated, "We believe that the survey results show a continuous increase in the importance of AI tools and functionalities, which is a positive signal for the cybersecurity industry (as new tools and functionalities will eventually require security measures). However, despite the noticeable increase in customer demand after the Mythos release (evidenced by accelerated consulting and trial growth), which leads us to believe that future security spending must increase, we believe as the survey results also confirm this trend will be gradual and the true large-scale impact is expected to gradually materialize starting from the 2027 calendar year and beyond." Furthermore, analysts pointed out that within the field of cybersecurity, threat intelligence, cloud security, and identity and access management are expected to be the most Generation AI-driven product directions in 2026, while hardware products are expected to be the least benefited area. On the other hand, secure access service edge has become the most notable subsector, with the percentage of respondents voting it as one of the top three beneficiary areas almost doubling from 13% to 23%. Analysts concluded by stating, "Security remains the most important consideration for businesses when choosing cloud service providers, which bodes well for manufacturers such as CrowdStrike, Palo Alto Networks, and Zscaler. It is expected that the growth rate of cloud computing spending will increase slightly from an average year-on-year growth of 9.6% in 2025 to 10.1% in 2026, continuing to support cloud security demand in the short term."