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2026 INVESTMENT OUTLOOK

Pushing limits

Dec 2 | AI’s buildout is dominated by a handful of companies that are spending on a scale so large, it has macro impact. The challenge for investors is reconciling whether AI will generate revenues of the same order of magnitude as the huge capital spending plans.
Read our 2026 outlook (PDF) Read our 2026 outlook (PDF)

Investment themes

  • 01

    Micro is macro

    The capital spending ambitions tied to the AI buildout are so large that the micro is macro. The overall revenues could justify the spend – yet it’s unclear how much will accrue to the tech companies building AI. We stay pro-risk and overweight U.S. stocks on the AI theme. We also see this as a great time for active investing.

  • 02

    Leveraging up

    The AI buildout’s investment needs are front-loaded and while revenue gains are back loaded. That creates a financing “hump” requiring leverage. Yet a levered financial system can create vulnerabilities. We see opportunities for AI exposure in in both public and private credit markets. We turn tactically underweight long-term Treasuries.

  • 03

    Diversification mirage

    In markets driven by only a few forces, “diversifying” away from these is a bigger active call than before. We think portfolios need a clear plan B and readiness to pivot quickly. Traditional diversifiers like long-dated bonds offer less cushion against risk asset selloffs. We prefer idiosyncratic return sources in private markets.

BlackRock Bottom Line: BlackRock Investment Institute 2025 Global Outlook

Speaker: Wei Li, Global Chief Investment Strategist, BlackRock

Mega forces, like the rise of artificial intelligence (AI) and geopolitical fragmentation, are transforming economies. That means investors can no longer view the world in terms of business cycles or temporary deviations around stable long-term trends. Understanding the forces reshaping global economies can help investors identify unique opportunities. 

Our three investment themes as we head into 2025 are: financing the future, rethinking investing and staying pro-risk.

BlackRock Investment Institute 2025 Global Outlook

Our first theme is financing the future. Sizable capital will be needed as the rise of AI, the low-carbon transition and other mega forces drive a broad infrastructure buildout. With governments constrained by high public debt, capital markets will play a pivotal role in providing the funding needed. Private markets can offer exposure to broader sources of credit as well as to early-stage growth companies driving AI adoption.

Our second theme is rethinking investing. An ever-changing outlook calls for an ever-evolving portfolio. It calls into question many long-held investing principles, including the idea of a neutral “benchmark” portfolio like the traditional 60/40 portfolio mix of stocks and bonds. As mega forces reshape whole economies, we think investors should focus more on themes and less on broad asset classes. And with a wide range of possible outcomes, investors may wish to reassess portfolios more often.

Our third theme is staying pro-risk. We see the U.S. still standing out versus other developed markets thanks to stronger economic growth and its ability to capitalize on mega forces. We recognize some U.S. equity valuations look expensive but don’t think historical averages are necessarily a good guide amid a transformation.

The bottom line is: Moving into 2025, we think investors could benefit from viewing the world through the lens of transformation. We think being more dynamic with portfolios and getting granular with views will both be essential.

BlackRock Bottom Line

Entering the new year, the BlackRock Investment Institute outlines areas of opportunity as economies are undergoing a transformation. Wei Li, BlackRock’s Global Chief Investment Strategist, shares the three themes of the 2025 Global Outlook.

Global Investment Outlook

Take a deep dive into our latest views on the Global Outlook

Dec 4, 2024
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BlackRock Investment Institute

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