BlackRock is one of the last remaining fund managers still bullish and overweight US equities, with the wealth management giant highlighting in its latest market update that the AI mega force will continue to drive further returns.
For instance, the firm’s analysts cited Nvidia’s recent strong earnings as evidence of AI’s potential, despite broader concerns around tariffs and regulatory risk.
The AI mega force is also driving opportunities in energy, with BlackRock pointing to the rising global energy demand as a result of the evolution in AI – growth that calls for more production of all kinds of energy.
Back in April, having spent a brief few days neutral on US equities, BlackRock announced it had shifted its focus back after US President Donald Trump announced the pause on “reciprocal” tariffs.
At the time, the wealth giant said: “US equities are supported by the AI theme, resilient corporate earnings and a so far solid economy.”
AI’s growth, particularly that of generative AI, was highlighted during the recent Morningstar Investment Conference, where stakeholders predicted global revenues from generative AI would expand from US$35 billion in 2025 to around US$125 billion by 2029.
With much of the AI revolution centred in the US, American equities are expected to be the primary beneficiaries of this growth.
AMP’s Shane Oliver is also confident in the US’ AI potential, with the chief economist telling InvestorDaily recently that the US’ “AI dominance” will serve as a “powerful offset” to the declining faith in US exceptionalism as a result of President Trump’s slew of questionable domestic and foreign policies.
AI as a tool for stock selection
Besides hedging its bets on AI’s potential to keep US equities elevated, BlackRock is also leveraging AI to “discern the signal from the noise”.
Its managers, the firm noted, are tapping into AI to track patterns and sentiment shifts in their own discussions.
Late last year, BlackRock said it is exploring the use of generative AI to enhance its investment processes, having already tapped into AI-driven models within its Systematic Active Equity team to analyse vast datasets and identify subtle, data-based signals that inform stock selection and portfolio construction.
But BlackRock is not alone in turning to AI to optimise stock picking. Namely, speaking at the Stockbrokers and Investment Advisers Association conference last month, Armina Rosenberg, co-founder of Minotaur Capital, said her firm uses AI for “absolutely everything”.
Rosenberg explained that Minotaur Capital has built its own tool, called Taurient, which uses several large language models to identify quality-listed opportunities across the globe, scanning some 35,000 news articles a week to locate such companies.
After Minotaur’s software compiles and interrogates the articles, it then provides a rapid assessment of whether the fund manager should look into the company in further detail or not.
Looking at AI adoption in the investment management industry more broadly, Rosenberg compared it to the rapid use of Microsoft Excel in the 1990s.
“I think AI, people are quite scared of it, but it’s kind of like Excel in the 1990s. We used to do discount and cash flow models using pen and paper – now we use Excel. It’s going to be the same thing with AI, so we’ll do investment management using AI as part of the process,” she said.
A report from the World Economic Forum earlier this year found financial services employees worldwide are at the forefront of embracing digitisation and automation.
Namely, it revealed that while 86 per cent of employers across all industries expect AI and information processing technologies to significantly transform their business by 2030, the financial services sector leads the way, with a staggering 97 per cent of employers anticipating similar changes.
“Increased digitalisation is seen as the primary driver of transformation in the financial services and capital markets sector over the next five years, alongside adaptation to climate change and slower economic growth,” the World Economic Forum said.
