Investing.com -- Despite escalating macroeconomic headwinds and U.S. tariff uncertainty, corporate IT budgets remain surprisingly stable, according to Citi’s latest quarterly CIO survey.

“Our 1Q25 CIO survey revealed a surprisingly resilient IT budget outlook despite tariff announcements,” Citi analysts wrote.

The survey, which included 103 chief information officers and was conducted after the so-called "liberation day" for tariffs, is said to have found that next-12-month (NTM) IT budget growth expectations held at 2.7% in the U.S., while Europe saw a modest dip to 2.3% from 2.6%.

Globally, average IT budget projections ticked down slightly to 2.5%, compared with 2.7% in Citi’s previous survey.

“We view the results as a slight incremental negative for the demand environment heading into Q1 results but note IT budgets still appear largely range bound within the 2.5-3% range seen over the last couple years,” the analysts said.

Tariff-related caution is said to have led to an average 3% downward revision in NTM budgets, but spending priorities are shifting, not collapsing, according to Citi.

For the first time, data modernization and generative AI (GenAI) overtook cybersecurity as the top investment priority. “Cybersecurity relinquished its top investment priority status to data analytics/GenAI,” Citi said, adding that GenAI has been “steadily winning budgetary, executive attention.”

That said, cybersecurity spending remains robust, with the bank noting that growth is expected around 5.3%, well above the total IT budget growth rate.

Citi added that vendors offering comprehensive data security for GenAI deployments are likely to be at a relative advantage.

According to the bank, Microsoft (NASDAQ: MSFT ) remains the top GenAI vendor among respondents, followed by Amazon (NASDAQ: AMZN ), which moved ahead of OpenAI and Google (NASDAQ: GOOGL ).

The firm concluded that while CIOs expect GenAI spending to rise by 9% over the next year, that’s down from 11% in December and 13% in March 2024, signaling a modest cooling in near-term enthusiasm.