BlackRock favors AI stocks despite neutral US equity outlook
“While we have downgraded our investment opinion on U.S. equities overall, BlackRock’s conviction in the fundamentals of artificial intelligence remains unchanged, and we still favor AI-related stocks when selecting U.S. equities,” Wei Li, global chief investment strategist at the $15 trillion asset manager BlackRock, stated in a written interview with Chosun.com.
The world’s largest asset manager adjusted its stance on U.S. stocks from “overweight” to “neutral” on October 12, 2026, responding to market sentiment pressured by the 10-year U.S. Treasury yield surpassing 5%. Li emphasized that the downgrade reflects short-term risk management rather than a shifting outlook on artificial intelligence.
Investment Priorities and the Search for AI Winners
BlackRock kept the investment priority of AI-related enterprises and listed infrastructure firms steady despite the broader equity downgrade. Li noted that the artificial intelligence transition creates distinct winners and losers across global markets, with high interest rates widening the gap between them.
High borrowing costs create an advantageous environment for businesses boasting steady earnings, strong balance sheets, and pricing power.
Hardware suppliers supporting the technology face accelerating demand. Chosun.com reported that strong demand paired with production capacity limits creates a distinct opening for manufacturers in South Korea and Taiwan.
Shifting Capital to Asian Hardware and U.S. Treasuries
BlackRock upgraded emerging market equities, including South Korea and Taiwan, from “neutral” to “overweight” due to their centrality in the memory semiconductor and hardware supply chains. At the same time, Li cautioned that lower-cost technology from Chinese competitors could eventually pressure the profit margins and market share of existing producers.
The firm increased its holdings of U.S. short-term government debt while upgrading long-term Treasuries from “underweight” to “neutral.” Yields on the 10-year Treasury note sat below 1% when BlackRock began trimming its holdings in 2020, but now exceed 5%. Li described the current income levels as attractive and noted that the anticipated price correction has largely played out.
Treasury yields could experience temporary upward pressure as technology giants building AI infrastructure compete with the federal government for limited capital. However, Li told Chosun.com that the risk of a sharp surge from current levels remains low, adding that falling interest rates in the future would create capital gains opportunities upon selling.
Short-Term Inflation Pressures
Artificial intelligence is unlikely to resolve inflation or pull down interest rates in the immediate term. Li explained that tech companies are absorbing massive amounts of capital, electrical power, and raw materials to build out required infrastructure, keeping near-term price pressures elevated.