BlackRock Turns to Overweight Emerging Market Stocks, Betting on AI Resources and Earnings Advantage

Odaily News: BlackRock is once again recommending an overweight position in emerging market stocks, betting that access to scarce resources needed for the AI boom and strong earnings will drive outperformance. Strategists in the firm's research division, including Wei Li, wrote in a report on Monday that South Korea and Taiwan are "at the core" of the semiconductor and memory chip supply chain, while Latin American markets offer investment exposure to the commodities and infrastructure needed for AI buildout. BlackRock expects that growing investment in the technology sector will drive up the value of these constrained resources and support corporate profits. The move marks a reversal from BlackRock's stance in June, when the world's largest asset manager downgraded emerging market stocks from overweight to neutral, warning that AI concentration and leverage issues (particularly in South Korea) had weakened the risk-reward ratio.

BlackRock said that deleveraging in the South Korean stock market after a sharp sell-off in July provided support for returning to an overweight position. (Jinshi)