Blackrock’s official weekly report explicitly stated that it has revised its position on U.S. equities as well as stocks in South Korea and Taiwan, China, and the broader emerging markets equities allocation back to overweight. Recently, top Wall Street institutions including Blackrock, Goldman Sachs, and Morgan Stanley have become marginally more optimistic about their outlook for the future stock market.
According to Zhitong Finance APP, equity strategists from BlackRock, the largest asset management giant on Wall Street, have once again turned to an “overweight” position in U.S. and emerging market equities, primarily because they believe that the substantial damage caused by a new round of Middle East geopolitical conflicts to global economic growth is “likely to be very controllable.”
The reason BlackRock upgraded its allocation view on U.S. and emerging market equities from neutral to overweight is due to the partial emergence of two crucial risk appetite “indicators” it had been waiting for: signs of the resumption of Hormuz shipping, and evidence that the impact of the war on economic growth is manageable. Meanwhile, the S&P 500 Index has rebounded nearly 8% from its March low, almost recovering all losses since the outbreak of the Iran war. The Nasdaq Composite Index, which includes some of the hottest AI semiconductor stocks globally such as NVIDIA, AMD, and Micron Technology, has fully recovered all declines since the Iran war erupted at the end of February.
BlackRock’s strategists have shifted their stance on South Korea’s stock market, centered around semiconductor stocks, and Taiwan’s stock market from a previously cautious position to the most aggressive bullish stance of “overweight.” Regarding core investment themes/trends, BlackRock’s strategists are particularly optimistic about semiconductor stocks closely related to AI computing power infrastructure, such as leaders in the AI computing power supply chain in the U.S., South Korean, and **** markets.
In their latest weekly investment report, BlackRock’s top strategy team wrote that the damage to global growth from a new round of Middle East geopolitical conflict is manageable, and U.S. equities and emerging market equities (especially those in South Korea and Taiwan) are once again worthy of long-term “overweight” positions for investors. At the core investment theme/trend level, BlackRock emphasized that technology stocks, after experiencing corrections, present significant investment appeal, especially as earnings expectations for semiconductor sectors closely tied to AI computing continue to be revised upward. Additionally, geopolitical fragmentation and the global trend toward AI development, combined with policies emphasizing supply chain resilience, will further drive global demand for energy independence, core infrastructure, and power equipment.
BlackRock’s official weekly report explicitly stated that it has readjusted its allocation stance on U.S. equities, South Korean and **** equities, and the broader emerging market equities back to overweight. It highlighted that the expected earnings growth for the technology sector in 2026 has risen to 43%, with overall semiconductor sector profits projected to surge approximately 80% this year. Geopolitical dynamics and the exponential growth in global AI computing power demands will jointly drive core infrastructure and power needs.
Major Wall Street firms express optimism about the stock market as the U.S. earnings season begins.
As the U.S. earnings season officially kicks off this week, robust profit expectations for AI computing power infrastructure underpin the market. Moreover, there is growing belief that Israel and Iran, along with Lebanon, will soon reach a long-term stable ceasefire agreement amid domestic livelihood pressures. As a result, top Wall Street investment institutions, including BlackRock, Goldman Sachs, and Morgan Stanley, have become more optimistic about the future outlook of the stock market. Michael Wilson, a renowned equity market strategist at Morgan Stanley, stated on Monday that strong earnings performance and ongoing economic recovery suggest that the stock market is in the “final stage” of downward adjustments triggered by geopolitical conflicts. Risks stemming from private credit and artificial intelligence (AI) shocks have already been priced in by the market.
Almost simultaneously, a research report released by Goldman Sachs’ macro trading team indicated that recent signals of ceasefire intentions and willingness to negotiate between the U.S. and Iran have reduced extreme downside tail risks, leading the market into a “new phase of crisis,” where the worst-case scenario is no longer the baseline pricing. The report emphasized that if this shock resembles an “inflation shock” rather than a “growth shock,” then there is still room for the stock market to reprice double-digit earnings growth. Goldman Sachs’ latest client fund flow notes revealed that hedge funds turned net long last week for the first time in eight weeks, evidently betting early on a ceasefire and resilient earnings.
Goldman Sachs noted that the temporary ceasefire agreement has reduced the necessity for major central banks to urgently pivot but has not entirely eliminated residual pressure for “higher-for-longer” interest rates. Goldman Sachs tends to believe that the likelihood of the Federal Reserve raising rates is the lowest among major central banks, and the tail risk of a large-scale re-hiking cycle has significantly diminished, suggesting that interest rate volatility may continue to decline. However, energy-driven inflationary pressures remain unresolved, and unless oil prices stabilize further, front-end rates will still struggle to ease quickly. In other words, Goldman Sachs believes the most dangerous extreme trading scenarios are receding, and the market will increasingly focus on oil price paths, inflation stickiness, and earnings realization, entering a relatively optimistic yet high-volatility phase without disorder.
In a research report released on Monday, BlackRock strategists led by Jean Boivin, head of the BlackRock Investment Institute, wrote that weeks ago, the Middle East geopolitical conflict caused a sharp decline in global financial markets’ risk appetite, prompting the asset management giant to downgrade its equity market allocation stance to “neutral.” Since then, they have been observing “two key indicators to increase risk-taking.” The core signals and signs they monitored include the tendency of geopolitical forces to restart shipping through the Strait of Hormuz and data indicating limited economic impacts of the war. They stated, “We have seen positive developments in both aspects.” They described the recent two-week ceasefire agreement as “very significant” and noted that the threshold for returning to a state of geopolitical warfare is “high.”
As BlackRock has completely shifted to a bullish stance on U.S. and emerging market equities, the S&P 500 Index has nearly recouped all of its losses triggered by the outbreak of the Iran war in late February. Previously, U.S. President Donald Trump signaled his willingness to end the conflict and last week agreed to a fragile temporary ceasefire agreement. The latest surge occurred on Monday when he directly tweeted that Iran had contacted his administration regarding peace talks, despite the U.S. having begun implementing a naval blockade in certain areas of the Strait of Hormuz.
As shown in the chart above, the U.S. stock market has nearly recovered all of its losses from March—the S&P 500 Index has experienced significant volatility recently due to news developments related to the Iran war. Note: The chart shows the performance of the S&P 500 Index since the escalation of the U.S.-Iran conflict.
In addition, BlackRock highlighted the upcoming U.S. earnings season, emphasizing that the growth engine of corporate profits could sustain the main theme of the U.S. equity bull market. Strategists wrote: “Even during geopolitical conflicts, corporate earnings expectations have continued to rise, largely driven by strong demand for AI-related investments.” The Wall Street banking earnings season has already begun and will enter a more intensive disclosure phase starting Tuesday, with financial giants such as JPMorgan set to announce their results.
Semiconductors, energy independence, and power infrastructure emerge as super investment themes.
According to the latest data from Bloomberg Intelligence, after years of downward revisions to baseline earnings forecasts at quarter-end, Wall Street analysts are now significantly raising their earnings expectations, primarily driven by oil and AI semiconductor companies. Strategists noted that U.S. and emerging market equities—where BlackRock has upgraded its ratings and allocation stance to overweight—are showcasing “profit highlights” strongly propelled by leaders in the AI supply chain.
Regarding U.S. and emerging market equities, BlackRock strategists stated, “The damage to global growth caused by Middle East geopolitical conflicts is manageable, and robust earnings expectations—especially in the technology sector—lead us to anticipate a full return of risk appetite.” They pointed out, “Earnings in the semiconductor sector are expected to grow by 80% this year,” which is driving analysts to continuously revise upward earnings expectations for tech stocks and the broader stock market, while core AI hardware manufacturers in South Korea and Taiwan are “driving up earnings expectations for emerging markets.”
Moreover, BlackRock strategists, including Boivin, collectively wrote, “The valuation premium of technology stocks has eroded, and the 12-month forward valuation of the U.S. information technology sector relative to other sectors has fallen to its lowest level since mid-2020.” Previously, Torsten Slok, chief economist at Apollo Asset Management, stated that global technology stock valuations have “significantly declined,” with some tech stocks even reverting to levels seen before the global AI investment boom began.
BlackRock strategists also believe that “geopolitical fragmentation is supporting defense and aerospace construction, pushing governments to pursue energy independence systems more aggressively and encouraging companies to invest more in supply chain resilience.” These factors, combined with the inevitable AI megatrend, “will jointly drive increasingly strong demand for core public infrastructure and power infrastructure.”
Over the weekend, a research team led by Michael Hartnett, a Bank of America strategist known as the “most accurate strategist on Wall Street,” released a report stating that commodities represent the structural backbone of the broader “post-war trade” trend, while Chinese tech stocks and the global semiconductor sector are tactical core offensive directions. Global consumer stocks are expected to fully benefit from potential “policy panic relief packages” as the U.S. government strives to prevent the U.S. economy from falling into recession—a logic that also applies to global consumer sectors.
In the view of Bank of America’s strategist team led by Hartnett, semiconductors, consumer stocks, and Chinese technology shares, along with a steepening long-term yield curve, will be among the more actionable and alpha-generating tactical offensive trading themes in the post-war quarters.
Chinese tech stocks correspond to “Made in China” continuing to lead global manufacturing, accelerated frontier AI development in China, ongoing easing of U.S.-China trade tensions, and a potential important summit window; semiconductors correspond to AI hyperscalers (such as Google, Microsoft, and Amazon) continuing their capital expenditure arms race, as long as they “prefer taking on debt and layoffs rather than retreating from the AI capex race (the so-called ‘AI arms race’),” the entire semiconductor supply chain remains investable; consumer stocks represent what Hartnett repeatedly emphasizes as the “best post-war trading theme,” primarily because he expects fiscal and monetary policy to focus more on alleviating living cost pressures for the public and avoiding simultaneous deterioration in economic and public opinion trends.
This Wall Street financial giant cites the logic of oversold rebounds driven by ‘earnings certainty plus high beta attributes’ and continuously expanding global artificial intelligence spending as the core rationale for its long-term optimism on semiconductor stocks. The latest forecast data from Bank of America strategists show that, driven by accelerated growth in the world’s most critical AI compute supply chains (led by NVIDIA, Broadcom, Taiwan Semiconductor, and Marvell Technology, with forward valuations between 15x-20x), as well as in memory/logic chips, 2.5D/3D advanced packaging, and data center power chains, the global semiconductor market will reach a total scale of $2 trillion by 2030, with an annual compound growth rate of 20%. By comparison, the global semiconductor market size will remain below $1 trillion at least until 2025.
As model sizes, reasoning chains, and multimodal/agent-based Agentic AI workloads drive exponential increases in compute resource consumption, tech giants’ capital expenditure priorities increasingly concentrate on AI compute infrastructure under surging AI compute demand. Global investors continue to anchor the ‘semiconductor stock bull market narrative’ around expectations for new product iterations and AI compute cluster deliveries from NVIDIA, Google TPU clusters, and AMD. This narrative remains one of the most certain cyclical investment themes in global equity markets. It also implies that investment themes closely related to AI training and inference—such as power, liquid cooling systems, and optical interconnect supply chains—will continue to rank among the hottest investment sectors in the stock market, following AI compute leaders like NVIDIA, AMD, Broadcom, Taiwan Semiconductor, and Micron, even amid uncertainties in the Middle East geopolitical situation.
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