Waves of transformation

We think the world could be undergoing a transformation on par with past technological revolutions.

It’s being driven by mega forces like the rise of artificial intelligence, the low-carbon transition and the rewiring of supply chains. Those three in particular could unleash a potentially massive wave of investment, reshaping economies and markets. The size, speed and impact of that investment is highly uncertain. So several starkly different outcomes are all feasible, in our view. We think this transformation presents exciting investment opportunities.

The three themes for the BlackRock Investment Institute’s 2024 midyear outlook are: getting real, leaning into risk and spotting the next wave.

Our first theme: Getting real. We see the biggest opportunities in the real economy as investment flows into infrastructure, energy systems and technology – and the people driving them. We think companies will need to evolve their business models. Company fundamentals will matter even more.

Next, leaning into risk. Investors may be tempted to wait for clarity on how the transformation will pan out. But we see potentially large rewards for leaning into risk. We look for investments that can do well across outcomes and lean into the current most likely one.

The third theme is spotting the next wave. The path of the transformation could shift over time – and potentially suddenly. This theme is about looking for the next wave of investment opportunity and being ready to overhaul portfolio allocations to capture it.

The bottom line is: we see a possible investment boom ahead that could transform economies and markets. We are taking risk by leaning into the transformation and are ready to pivot as the outlook changes.