BlackRock has shifted back to an overweight view on emerging-market equities, arguing that the artificial intelligence buildout could lift the value of scarce resources and support stronger corporate earnings across key regions. In a Monday report, strategists in the firm’s research unit, including Wei Li, said South Korea and Taiwan sit at the center of the semiconductor and memory-chip supply chain, while Latin American markets offer exposure to the commodities and infrastructure needed for AI expansion. The call marks a reversal from BlackRock’s June downgrade, when the asset manager cut emerging-market stocks to neutral and warned that AI concentration and leverage concerns, especially in South Korea, had weakened the risk-reward profile. BlackRock said deleveraging in the South Korean stock market after a sharp sell-off in July helped support its renewed overweight recommendation.
BlackRock has restored an overweight recommendation on emerging-market stocks, betting that access to scarce resources tied to the artificial intelligence boom, along with solid earnings, will help the asset class outperform.
In a Monday report, strategists in the firm’s research unit, including Wei Li, wrote that South Korea and Taiwan are at the "core" of the semiconductor and memory-chip supply chain. They added that Latin American markets provide investment exposure to the commodities and infrastructure needed to build out AI capacity.
BlackRock said rising investment in the technology sector is expected to increase the value of those constrained resources and support corporate profits.
A reversal from June
The latest move reverses BlackRock’s stance from June, when the world’s largest asset manager downgraded emerging-market equities from overweight to neutral. At the time, it warned that AI concentration and leverage issues, especially in South Korea, had weakened the risk-reward balance.
BlackRock also said deleveraging in South Korea’s stock market, following a sharp sell-off in July, helped support the renewed overweight call.
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