The AI surge powering the S&P 500 (^GSPC) rally this year is expected to continue driving returns over the next 6-12 months, according to BlackRock analysts. Wei Li, global chief investment strategist at BlackRock, highlighted enormous capital spending on AI and increasing demand for low-carbon energy as key factors. AI data centre investments are projected to rise by 60%-100% annually in the coming years, comparable to the Industrial Revolution.
With $6.15 trillion in money market funds and the S&P 500 hitting 36 record highs this year, BlackRock strategists remain optimistic. They expect continued performance from large tech companies, chip producers, and firms supplying inputs like energy and utilities. Key sectors set to benefit from the AI boom include Energy, Health Care, Industrials, Materials, and Utilities.
However, potential challenges such as policy and regulatory hurdles, as well as supply bottlenecks for metals and minerals, could impact AI’s growth.
