Gartner Sees Double-Digit Growth Ahead with AI Demand and Tariff Adaptations

Gartner's CEO Eugene Hall emphasized two main themes: AI as a growth opportunity and adaptations for double-digit growth. Hall highlighted AI's potential across several dimensions and outlined a clear path to achieve double-digit growth in 2026.

Gartner Inc. has recently forecasted that IT spending in the Middle East and North Africa (MENA) region is expected to reach $169 billion in 2026, marking an 8.9% increase from 2025 [1]. This growth is driven by strategic investments in AI, intelligent automation, and multi-cloud strategies, while also bolstering cyber defenses and talent upskilling.

The report highlights that data center systems spending is projected to increase by 37.3% in 2026, making it the highest-growing IT segment [1]. This surge is primarily due to the pent-up demand for generative AI (GenAI) and advanced machine learning, which require robust computing power for large-scale data processing.

Software spending is also expected to grow significantly, with a projected increase of 13.9% in 2026, reaching $20.4 billion [1]. This growth is attributed to the accelerating adoption of GenAI capabilities. Gartner predicts that by 2028, 75% of global software spend will be on solutions with GenAI functionality.

IT services spending is projected to grow by 8.3% in 2026, reflecting the increasing integration of AI into these services [1]. The report emphasizes that CIOs must embed AI into the core of their business strategies to achieve competitive advantages.

Kyndryl Holdings, a global IT services provider, reported its Q1 2026 earnings, showcasing a 2.6% decline in revenue but a 39% increase in adjusted pretax income [2]. The company's focus accounts initiative halved revenue from eight clients, boosting gross margins by 50% YoY through margin optimization. Hyperscaler-related revenue nearly doubled to $400 million, on track to deliver $1.8 billion by fiscal 2026.

Sysco Corporation, a leading foodservice distribution company, expects sales growth of approximately 3% to 5% for 2026 [3]. The company plans to reward shareholders with approximately $1 billion in dividends and $1 billion in share repurchases for FY26.

References:
[1] https://www.gartner.com/en/newsroom/press-releases/2025-08-04-gartner-forecasts-mena-it-spending-to-reach-169-billion-us-dollars-in-2026
[2] https://www.ainvest.com/news/kyndryl-2026-q1-earnings-call-unraveling-contradictions-revenue-growth-ai-strategies-macro-impacts-2508/
[3] https://www.ainvest.com/news/sysco-expects-3-5-sales-growth-2026-unveils-ai-loyalty-pricing-initiatives-restaurant-traffic-recovery-2507/