According to BlackRock, the new macro regime already offers many opportunities, investors simply have to be selective within asset classes and benefit from structural changes, such as the rise of AI, decarbonization and the growth of private direct lending.
New York City-based multinational investment company blackrock inc (NYSE: BLK) has joined the list artificial intelligence (AI) advocates that AI is a ‘mega-force’ that will influence major market trends in the near future. According to BlackRock Investment Institute, stocks of AI-oriented companies will drive returns for developed markets in a challenging economic environment.
According to reports Published by Blackrock More and more companies are starting to talk about AI, looking for highly skilled workers with AI expertise. AI is also playing an increasing role in their revenue reports, with AI being mentioned over 14k times in 2023 so far.
In addition, BlackRock Investment Institute highlights the increased weight of tech stocks S&P 500 Index, As Jean Bouvin, head of the BlackRock Investment Institute, put it, this environment is “here to stay”.
BlackRock Investment Institute team said:
“We think this unusual equity market shows that a big force like AI can be a huge driver of returns, even when the macro environment is not your friend.”
Notably, the institute has an overweight allocation to AI-related stocks in developed markets. BlackRock already owns more than 7% nvidia corp(NASDAQ:NVDA) stock. As of the latest transaction, BlackRock holds 183,689,801 NVDA shares, valued at $75.5 billion. Nvidia is definitely a leader in the rise and adoption of artificial intelligence, with the most powerful GPUs for AI coming from the company. Therefore, BlackRock sees great potential in Nvidia’s future and invests heavily in NVDA shares. Currently, it is the second largest institutional investor in Nvidia.
Blackrock’s AI Vision
According to BlackRock, the new macro regime already offers many opportunities, investors simply have to be selective within asset classes and benefit from structural changes, such as the rise of AI, decarbonization and the growth of private direct lending.
Wei Li, Global Chief Investment Strategist at BlackRock, commented:
“We are not advocating for AI to get involved at this time as we already have experience with these types of forces. We are only advocating staying invested because we think there is demand for semiconductor chips [is] very real. The increase in sales and revenue is very real.”
Many are comparing the AI boom in 2021 to the metaverse hype. However, BlackRock believes that investing in AI is different from investing in the metaverse.
Tony DeSpirito, CIO of Global Fundamental Equities at BlackRock, explained that “the demand is really real. I think what’s going on in AI is very unlike the metaverse or virtual reality of a year ago. The orders have arrived… The increase in earnings is just coming.’
For BlackRock, the AI strategy certainly isn’t just an investment in Nvidia. The company has created a research and development unit – AI Labs – dedicated to AI. The unit conducts research at the intersection of artificial intelligence and finance, synthesizing ideas to foster innovation in both fields. The AI Labs team applies its expertise in statistics, machine learning, optimization, stochastic control, and decision theory to a variety of corporate problems, including retirement, trading, options, and ETFs.
Daria is a crypto enthusiast who strongly believes in the future of blockchain. Being a hospitality professional, she is interested in finding ways in which blockchain can transform various industries and bring our lives to a different level.
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