Tech boom: BlackRock doubles down on AI and U.S. tech companies

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Tech boom: BlackRock doubles down on AI and U.S. tech companies

Investing.com -"We believe that the strong gains in tech stocks have been driven by the market's focus on Artificial Intelligence and investors' preference for quality given the high macroeconomic and market uncertainty."), highlighting that the sector has risen 30% this year, almost four times more than the rest of the S&P 500, according to LSEG Datastream data.

These experts echo analysts' forecasts, expecting a 20% increase in the next 12 months, well above the predictions for the rest of the market."Tech firms have so far delivered on lofty expectations: Their earnings grew 23% year over year in Q1. In a world where mega forces – big structural shifts – drive returns now and in the future, we eye the short- and long-term impacts of AI on earnings," added the firm.

"Much of the slide in European stocks came after the results of the European Union elections and news of a snap election in France," they state.What could stop the rise of tech stocks? According to BlackRock,"Markets could lose favor for the sector if hopes for AI are dampened, such as if they feel corporate spending on AI hasn’t paid off in a boost to earnings or margins."

"Bottom line: The concentration in U.S. tech stocks is a feature, not a flaw, of the AI theme. We stay overweight U.S. stocks on a six- to 12-month, tactical horizon and still prefer the AI theme. We like industrials and healthcare as stock gains broaden," they conclude.

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