- BlackRock is overweight on U.S. stocks since artificial intelligence expenditure boosts earnings amid higher financing costs.
- Higher artificial intelligence-related capital demand will heighten competition for finance but is favorable towards short-duration bonds and market investments.
BlackRock is taking an overweight stance on U.S. equities since AI boosts profits for corporations even amid rising borrowing costs. BlackRock stresses the lack of AI, sustainable earnings, and cross-asset plays. AI development needs an increase in the supply of computing capacity, energy, semiconductors, memory, and data center build-out. BlackRock predicts that the U.S. will need more than $7.5 trillion a year in financing by 2030 owing to AI infrastructure. Companies engaged in AI and data centers accounted for almost 14% of U.S. investment-grade bond issuance this year, versus 5% in 2025 and 1% historically.
🔔 Our Q4 2026 Global Outlook is live 🔔
— BlackRock (@BlackRock) September 22, 2026
Global government bond yields have broken higher as sovereign borrowing competes with private financing needs led by AI. Yet equities have been resilient, in part supported by AI-powered earnings growth.
We unpack what that means for… pic.twitter.com/3ySGFjZxmZ
U.S. Stocks Kept BlackRock Favour Recommendation
BlackRock maintains a bullish view on U.S. stocks, with earnings expectations staying solid. According to the firm, AI-related companies form a substantial chunk of expected earnings growth in the year ahead. Thus, rising bond yields have made this environment different from the one back in 2022 when rates were being tightened. In addition, BlackRock has moved emerging market equities into an influential position in its Q4 outlook.
According to the firm, the move is based on improving earnings, lower valuations, and AI-related opportunities. It is also neutral on China but sees selective opportunities related to physical AI. Moreover, cheaper open source AI will make adoption faster in different markets. But increased use of AI does not necessarily mean better profits for technology companies. Instead, BlackRock has stressed opportunities for limited supply, which will restrict AI infrastructure growth. These include power generation, electricity grids, memory, chips, and data centers.
Higher Yields Move BlackRock to Short-Dated Bonds
BlackRock is bullish on short and mid-term government bonds since higher yields bring more risks for longer-dated bonds. BlackRock is still underweight long-term US Treasuries but neutral on short-term bonds. The fund manager is also bullish on shorter durations in investment-grade credit due to increased refinancing costs. Companies are currently refinancing their debts at a higher cost than before. The Federal Reserve raised the targeted rate to 3.75%-4.00% on September 16 amid high inflation levels. Higher yields in Japan would decrease the demand for US Treasuries according to BlackRock. BlackRock mentioned higher yields in Treasuries following the Fed meeting on September 21.
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