CDW (CDW) Citi’s 2026 Global TMT Conference summary

AI-driven market opportunities and strategy

• AI is reshaping demand, expanding from hyperscalers to enterprises and mid-market, with strong growth seen in verticals like healthcare, federal, education, and state/local government.

• End-to-end technology partnerships are increasingly vital as complexity grows, with a focus on advisory, integration, implementation, and managed services.

• Recent acquisition of Lovelytics enhances data and AI implementation capabilities, adding 500 engineers and data scientists to address data readiness challenges.

• Repeatable, scalable solutions in healthcare and municipalities drive productivity and efficiency, such as reducing 911 call times and improving clinical outcomes.

• Deployment-agnostic approach (cloud, on-prem, hybrid) allows flexibility and positions the company to benefit regardless of customer infrastructure choices.

Financial performance and outlook

• Demand has been broader and stronger than expected, with robust engagement, backlog, and written business, especially in hardware infrastructure.

• Geared for Growth is a multi-year initiative focused on efficiency, automation, and AI productivity, with benefits expected to accrue in the second half and beyond.

• Outlook for the U.S. IT market is mid-single-digit growth, with expectations to outperform by 200–300 basis points, though some prudence is maintained due to macro and supply chain risks.

• Gross margin fluctuations are attributed to mix shifts, with strong enterprise hardware demand offset by lighter services growth, but long-term margins are expected to improve as services and SaaS pick up.

• Capital allocation remains opportunistic, with buybacks supporting double-digit EPS growth.

Services, partnerships, and competitive positioning

• Services growth is expected in professional and managed services, especially as AI adoption accelerates in the mid-market.

• Partner ecosystem has expanded to include AI labs, data fabric, and chip providers, with a focus on driving AI relevance and mid-market reach.

• End-to-end provider status and ability to manage complexity are driving share gains across mid-market, verticals, and small business, with security and cost optimization as key themes.

• IT budgets are increasingly absorbing labor costs related to AI, with functional budgets shifting toward IT spend.

• No signs of double ordering or cancellations; backlog remains elevated, supporting confidence in durable demand.