BlackRock, the world’s largest asset manager, has doubled down on its bullish stance for US stocks heading into 2025, citing artificial intelligence as a key “mega force” that will disproportionately benefit American companies. The firm upgraded its rating on US equities to “+2” overweight relative to neutral, up from its previous “+1” overweight position, even as the S&P 500 trades at record highs.
This aggressive positioning stands in stark contrast to Bank of America strategist Michael Hartnett, who recently recommended investors pivot toward international stocks in 2025, warning that America’s exceptionalism trade may be ending. BlackRock firmly rejects this view, arguing that US equities have consistently outperformed global peers and that this trend is likely to continue.
The cornerstone of BlackRock’s optimistic outlook is artificial intelligence. The firm’s Investment Institute explicitly stated that “the AI mega force will benefit U.S. stocks more and that’s why we stay overweight, particularly relative to international peers such as European stocks.” This reflects BlackRock’s conviction that American technology companies are uniquely positioned to capitalize on the AI revolution, giving US markets a structural advantage over international competitors.
Beyond AI, BlackRock points to additional tailwinds including potential tax cuts and an easing regulatory environment under the incoming Donald Trump administration, which the firm believes will support continued economic growth and corporate profitability.
Addressing widespread investor concerns about elevated valuations, BlackRock dismissed worries about historically high price-to-earnings ratios. The firm argues that direct comparisons to historical valuation metrics are misleading because the US economy has fundamentally transformed, with technology and services sectors now dominating at the expense of traditional manufacturing. “The equity market’s changing sectoral composition reflects the transformation taking hold. So, comparing today’s index to that of the past is like comparing apples to oranges,” BlackRock stated.
The asset manager also noted that valuation measures have historically proven to be poor timing tools for market entry and exit decisions. However, BlackRock maintains a pragmatic approach, stating “We are risk-on for now but stay nimble.” The firm identified two key factors that could force a reassessment of its bullish stance: a significant surge in long-term bond yields or an escalation in trade protectionism that could disrupt global commerce and corporate earnings.
Key Quotes
U.S. equities have persistently outpaced their global peers. We think that could continue.
BlackRock’s Investment Institute stated this in their 2025 outlook, establishing their core thesis that American stock market dominance will extend into the new year despite already trading at all-time highs.
We think the AI mega force will benefit U.S. stocks more and that’s why we stay overweight, particularly relative to international peers such as European stocks.
This quote from BlackRock directly identifies artificial intelligence as the primary justification for their bullish US stock recommendation, highlighting the firm’s belief that American companies have a structural advantage in capitalizing on AI technology.
The equity market’s changing sectoral composition reflects the transformation taking hold. So, comparing today’s index to that of the past is like comparing apples to oranges.
BlackRock used this statement to dismiss valuation concerns, arguing that the US economy’s shift toward technology and AI-driven sectors makes historical valuation comparisons misleading and potentially irrelevant.
We are risk-on for now but stay nimble.
This quote reveals BlackRock’s pragmatic approach despite their bullish stance, acknowledging that market conditions could change and require rapid repositioning if bond yields surge or trade protectionism escalates.
Our Take
BlackRock’s explicit framing of AI as a “mega force” driving investment strategy represents a watershed moment in how institutional investors view artificial intelligence—not as speculative technology but as a fundamental economic driver comparable to electrification or the internet revolution. The firm’s willingness to upgrade US stocks at all-time highs specifically because of AI demonstrates extraordinary conviction in the technology’s transformative potential. What’s particularly noteworthy is BlackRock’s argument that traditional valuation frameworks are obsolete in an AI-driven economy, which could fundamentally reshape risk assessment across financial markets. This suggests we’re witnessing a paradigm shift where AI capabilities become the primary determinant of corporate and national economic competitiveness. However, BlackRock’s caveat about staying “nimble” acknowledges significant risks, including potential AI disappointment, regulatory crackdowns, or geopolitical disruptions that could quickly reverse the AI-driven rally.
Why This Matters
This outlook from BlackRock carries enormous weight in financial markets given the firm manages over $10 trillion in assets, making its investment recommendations highly influential for institutional and retail investors alike. The explicit identification of AI as a primary driver of US stock market outperformance underscores how deeply artificial intelligence has become embedded in Wall Street’s investment thesis for the coming years.
BlackRock’s positioning reflects a broader market conviction that the AI revolution is still in its early innings, with American technology giants like Microsoft, Google, Amazon, and Nvidia positioned to capture disproportionate value from AI adoption across industries. This has significant implications for capital allocation, as institutional money continues flowing into AI-related equities and infrastructure.
The firm’s dismissal of valuation concerns based on the economy’s structural transformation toward technology and AI-driven sectors signals that traditional valuation frameworks may need recalibration in an AI-dominated economy. This could justify sustained higher valuations for tech stocks and reshape how investors assess market risk. For businesses and workers, BlackRock’s outlook reinforces that AI adoption is not optional but essential for competitiveness, as companies leveraging AI technologies are expected to drive market returns and economic growth through 2025 and beyond.
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