BlackRock Investment Institute Videos

Weekly video_20260420
Natalie Gill
Senior Portfolio Strategist
BlackRock Investment Institute

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CAPITAL AT RISK. MARKETING MATERIAL.

Opening frame: What’s driving markets? Market take

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Since we last took stock of the AI mega force in our 2026 Global Outlook, several shifts have increased our conviction that it’s even more powerful now. And some of those shifts give the U.S. a competitive edge on AI.

Title slide: A supercharged mega force

Since we last took stock of the AI mega force in our 2026 Global Outlook, several shifts have increased our conviction that it’s even more powerful now. And some of those shifts give the U.S. a competitive edge on AI.

1. AI spending accelerates

Spending for the AI buildout – already historic – is accelerating even faster than expected, especially for the 'hyperscalers' or mega cap tech companies leading the buildout. Just since October, their capital expenditure estimates out to 2030 are up 25%.

2. Energy and political constraints

In our outlook, we laid out three constraining forces on the buildout: physical, political and financial.

Firstly, physical. The spike in gas prices since the start of the Middle East conflict enhances the U.S. and China’s AI edge. Data centers in Europe and other parts of Asia rely on grids powered by Middle East gas. China relies on such grids only minimally and the U.S. is a net energy exporter.

3. Financing and market implications

The back-loaded revenue gains from the massive AI spend has seen companies take on more debt. Funding from private markets has also played a role. Some major IPOs for companies like OpenAI and Anthropic could test appetite in equity markets. But bond issuance from 'hyperscaler' tech companies has been well-absorbed. That depth of capital markets in the U.S. is another advantage in the AI theme.

Outro: Here’s our Market take

We stay overweight to U.S. and EM stocks after last week’s upgrade. We see larger-than-expected investment supercharging the AI mega force and focus on its beneficiaries.

Closing frame: Read details: blackrock.com/weekly-commentary

BlackRock Bottom Line: 2024 Global outlook

Speaker: Wei Li, Global Chief Investment Strategist, BlackRock Investment Institute

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Higher interest rates and greater volatility define the new regime we’re in. In turn, that’s creating greater dispersion of returns.

We think investors will benefit from taking a more active approach to portfolios as we head into next year. 

Here’s our three investment themes for 2024: number one, managing macro risk; number two, steering portfolio outcomes; and number three, harnessing mega forces.

BlackRock Bottom Line open

Title: BlackRock Investment Institute 2024 global outlook

Our first theme is managing macro risk. Production constraints mean central banks face tougher trade-offs between inflation and growth – they can’t respond to faltering growth like before. This leads to a wider set of outcomes and a more uncertain macro outlook.

We don’t think investors should wait for the macro environment to improve. Instead, they should look to neutralize macro exposures or be very deliberate about which risks they take.

Our second theme is steering portfolio outcomes. We believe the new regime rewards an active approach to portfolios. Greater volatility and dispersion of returns create space for investment expertise to shine – that involves being more dynamic with indexing and alpha-seeking strategies, while staying selective.

Our third theme is harnessing mega forces. We see five structural shifts reshaping markets and driving returns now and in the future. We think they have become important portfolio building blocks on their own.

The bottom line is: Going into 2024 in the new regime, we want to put money to work. We believe investors should take a more active approach to their portfolios and be deliberate in taking portfolio risk.