BlackRock, Inc (NYSE: BLK) capitalizes on artificial intelligence following a spectacular AI-driven surge that marked the Nasdaq 100 index's best first-half-year performance ever.
BlackRock highlighted semiconductor manufacturers, firms with extensive data collections, and a high potential for automation as likely beneficiaries, Bloomberg reports.
In its mid-year report, BlackRock declared an overweight position on AI as a significant driver. BlackRock is selectively investing in tech to keep pace with the nearly 40% rally in the Nasdaq 100.
BlackRock already owns more than 7% of Nvidia Corp's (NASDAQ: NVDA) stock.
The S&P 500 (NYSE: SPY) rally has become increasingly focused on a select few tech stocks, highlighting the importance of AI driving returns amid unfavorable macroeconomic conditions.
BlackRock prefers U.S. bonds with short maturities as a source of income, as high-interest rates are likely to persist. It expects the Federal Reserve to increase rates to 5.75% and maintain them at this level until the latter half of 2024.
Long-term, the firm foresees the central bank sustaining tight policy to manage ongoing inflation pressures, influencing it to hold a strategic "maximum overweight" position on inflation-linked bonds.
BlackRock believes that the new macroeconomic regime offers ample opportunities, provided investors capitalize on structural changes like the rise of AI, the move towards decarbonization, and the expansion of private direct lending.
In May, reports suggested JP Morgan Chase & Co (NYSE: JPM) developing a ChatGPT-like software service that leverages disruptive artificial intelligence to select customer investments.
Banks, including Goldman Sachs Group, Inc (NYSE: GS) and Morgan Stanley (NYSE: MS), have already begun testing it for internal use.
Price Action: BLK shares traded lower by 0.39% at $682.00 on the last check Wednesday.