On Tuesday, Oppenheimer shared insights from its tenth annual fourth-quarter IT spending strength survey, which included interviews with 301 buyers. The survey results indicate a constructive outlook for IT budget growth through the end of the year and into 2025. The majority of respondents anticipate normal spending seasonality in the fourth quarter and similar IT budget growth for the next year. This trend suggests a reduction in macroeconomic uncertainty and underscores the growing significance of IT and AI in driving growth and efficiencies within enterprises.
According to Oppenheimer, the survey results do not forecast a cyclical increase in IT spending but point to a more normalized spending environment. Respondents conveyed that IT budgets, which were not utilized earlier in the year, are expected to be deployed in the fourth quarter with little room for deferral into 2025.
The findings from the survey have led to positive adjustments for certain stocks. Agilysys , Inc. (NASDAQ:AGYS) and ServiceNow, Inc. (NYSE:NYSE:NOW) both saw their price targets raised by Oppenheimer. These updates reflect a favorable outlook for these companies based on the survey's feedback, which is seen as a reliable indicator of future spending patterns in the IT sector.
On the other hand, the survey results were less optimistic for other stocks, such as Sprout Social, Inc. (NASDAQ:SPT), which experienced a lower price target and estimates. Similarly, companies like CXM and PATH were also perceived less positively, aligning with the survey's consensus that not all IT firms would benefit equally from the current spending trends.
The survey's consensus feedback highlighted that while IT budgets have been delayed, they have not been canceled for the year, with a low tolerance for further delay into 2025. This suggests that companies are likely to proceed with their IT investments promptly, aiming to capitalize on the benefits of technological advancements in the near term.
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