EMXC - Thematic Mid-Year Update: What's Next For AI And Geopolitics
2024-07-20 03:10:00 ET
Summary
- Investors may want to look beyond today’s market leaders to seek diversification and resiliency in their portfolios, uncovering underappreciated assets poised to benefit from mega forces that can potentially drive long-term growth.
- Integration across industries is driving massive demand for AI’s Infrastructure: data centers, semiconductors, and raw materials.
- This buildout, thought to continue through 2030, will require significant infrastructure investment, across semiconductors, energy, and metals like copper.
- Geopolitical fragmentation requires an evaluation of overseas dependence and a focus on U.S. reshoring. Shifting supply chains and varied demographics create strategic prospects across markets.
Originally published on June 24, 2024
By Jay Jacobs
As the AI buildout propels a potentially historic capital expenditure cycle, investors could be poised to unearth opportunities across industries amid greater geopolitical fragmentation.
Jay Jacobs, U.S. Head of Thematic and Active ETFs at BlackRock
Looking for Opportunities Beyond Today’s Leaders
U.S. and international equity markets have demonstrated resilience, flirting with all-time highs, despite significantly reduced expectations in the number of Fed rate cuts in 2024 and lingering inflation worries.
This performance, however, has been narrowly concentrated at both the stock and sector levels, including in AI, tech, and emerging markets. We believe investors may want to look beyond today’s market leadership to find underappreciated areas that may be well-positioned to benefit from powerful secular tailwinds, or mega forces, that can drive long-term growth.
Thematic Mid-Year Update: What's Next For AI And GeopoliticsIn a market characterized by greater dispersion, equity investors can look beyond recent market leaders to pinpoint beneficiaries both within and beyond mega-cap tech and AI.