BlackRockInvestment Institute

BlackRock Bottom Line: 2026 Midyear outlook Wei Li, Global Chief Investment Strategist, BlackRock Investment Institute We believe we’re in a world of scarcity. Strengthening mega forces are putting increasing pressure on supply-side constraints—labor, energy, infrastructure and capital. That in turn is shaping growth, inflation and market pricing. AI offers the promise of a permanent growth breakout through accelerating innovation, but the investment needed to build that future is reinforcing scarcity. That backdrop shapes the three investment themes we're focused on in our 2026 Midyear Outlook. First, AI scarcity. The AI buildout is accelerating and we’re focused on opportunities where bottlenecks are appearing: power, grids, chips and data centers. We see physical AI, including robotics and autonomous manufacturing, as the next frontier. Second, durable income. Higher yields have made income attractive again, but where that income comes from matters. We favor short-duration maturities, particularly euro area government bonds, along with public and private credit backed by resilient cash flows. Third, beyond labels. Traditional asset-class buckets are becoming less useful – and infrastructure highlights this. We think investors should start with the themes and risks they want exposure to—and then choose the best way to access them. The bottom line: AI may reshape the long-term growth outlook, but the route to such abundance runs through scarcity. We think investors should regularly reassess their exposures and get more granular with views as this economic transformation evolves. Disclosures FOR PUBLIC DISTRIBUTION IN THE U.S., CANADA, LATIN AMERICA, AUSTRIA, BELGIUM, DENMARK, FINLAND, FRANCE, GERMANY, IRELAND, ISRAEL, ITALY, LIECHENSTEIN, LUXEMBOURG, NETHERLANDS, NORWAY, PORTUGAL, SOUTH AFRICA, SPAIN, SWEDEN, SWITZERLAND, THE UNITED KINGDOM, HONG KONG, SINGAPORE AND AUSTRALIA. 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