BlackRock, the world’s largest asset manager, remains optimistic about the long-term potential of Artificial Intelligence (AI). However, the firm’s latest Investment Directions report suggests a major shift in how investors are positioning themselves for the year ahead. Instead of doubling down on Wall Street’s tech giants, market participants are increasingly targeting the physical backbone of the AI economy: energy and infrastructure.
The “Race for Megawatts” Eclipses Software
While big tech firms like Microsoft, Meta, and Alphabet dominated market returns in 2025, investors are now questioning the high costs of building the necessary infrastructure. Specifically, as these companies spend trillions on new data centers, concerns regarding capital returns and rising debt have begun to surface.
According to a BlackRock survey of 732 client firms across the EMEA region (Europe, the Middle East, and Africa), the appetite for “megacap” tech is cooling:
- 20% (One-Fifth): Only a small fraction of respondents still view major U.S. tech groups as the most compelling AI investment.
- Over 50%: More than half of investors now favor energy providers that supply the massive amounts of power required by data centers.
- 37%: Over a third of those surveyed identified infrastructure such as cooling systems and grid upgrades—as their primary AI investment choice.
Risk Management in a Concentrated Market
Ibrahim Kanan, BlackRock’s head of core U.S. equity, emphasized that the next phase of growth requires a more nuanced approach. He noted that investors must balance their exposure to massive tech firms with “differentiated upside opportunities” found in the supply chain.
Furthermore, the scale of this technological shift is unprecedented. Industry estimates suggest that AI-related capital expenditure could reach between $5 trillion and $8 trillion by 2030.
This immense spending is essentially a “front-loaded” investment, where the physical costs of electricity and hardware must be paid long before the software revenues fully materialize.
Is the AI Theme a Bubble?
Despite the pivot away from software leaders, investor conviction remains remarkably high. Only 7% of the survey respondents believe the AI theme is currently a market bubble.
This suggests that the majority of investors view the recent market volatility not as a signs of a crash, but as a healthy rotation into the essential services that make AI possible.
Consequently, 2026 is shaping up to be the year of the AI “backbone” stocks. As the demand for compute power accelerates, the companies that control the electricity grid and build the physical housing for servers are becoming the new favorites for institutional portfolios.
Armenian Dram
Ghana Cedi
Gambian Dalasi
Guinea Franc
Nigerian Naira
CFA Franc BEAC
