BlackRock shifts towards super-restricted stocks! Calling for the return of risk preference, tightly grasping the direction of semi-conductors, energy independence, and power infrastructure.

Stock strategists from BlackRock, the largest asset manager on Wall Street, have shifted their stance to "overweight" US and emerging market equities. This shift is mainly due to their belief that the substantial damage to global economic growth caused by the recent round of Middle East geopolitical conflict is "likely very manageable." BlackRock has raised its outlook on US equities and emerging market equities from neutral to overweight, as the two key risk preferences they were waiting for signs of the reopening of the Strait of Hormuz for shipping and manageable economic impact of the war have partially materialized. The S&P 500 index has rebounded by almost 8% from its March lows, nearly recovering all losses since the outbreak of the Iran war. The Nasdaq Composite Index, covering the world's hottest AI semiconductor stocks like Nvidia, AMD, and Micron, has fully recovered all losses since the end of February following the Iran war. BlackRock's strategists have also shifted their position on Korean and Taiwanese stock markets, focusing on semiconductor stocks at the core of their investment theme. They are particularly bullish on semiconductor stocks closely related to AI infrastructure, such as the industry leaders in the US stock market, as well as in Korean and Taiwanese stock markets. In their latest investment report, BlackRock's top strategists wrote that the damage to global growth from the recent Middle East geopolitical conflict is manageable. They suggest that US equities and emerging market equities (especially in Korean and Taiwanese markets) are once again worth long-term overweight for investors. They also highlight that semiconductor stocks related to AI computations are expected to see continued upward earnings revisions, and the trend of fragmented geopolitics and global AI technology development will drive demand for energy independence, core infrastructure, and power equipment globally. As the US earnings season kicks off, major Wall Street banks are actively bullish on the stock market. With the earnings season officially beginning this week, sentiments around robust profit expectations in AI computation infrastructure and growing confidence in a long-term stable ceasefire between the US and Iran and Lebanon have led top investment firms like BlackRock, Goldman Sachs, and Morgan Stanley to become more optimistic about the future of the stock market. According to Bloomberg Intelligence's latest data, Wall Street analysts, after years of downgrading quarterly earnings forecasts at quarter-end, are now significantly raising profit expectations. This upward revision is mainly driven by oil and AI semiconductor companies. Strategists suggest that BlackRock has raised its ratings and positioning on US and emerging market equities to overweight, providing "earnings highlights" driven by industry leaders in the AI computation chain. BlackRock strategists believe that the damage to global growth caused by the Middle East geopolitical conflict is manageable, and with strong profit expectations, especially in the technology sector, they expect risk preferences to fully return. They note that "semiconductor sector earnings are expected to grow significantly by 80% this year," driving continued upward revisions of earnings expectations for technology stocks and the overall stock market. Industry leaders in AI hardware system manufacturing in Korean and Taiwanese stock markets are "pushing up earnings expectations in emerging markets." Furthermore, they emphasize that the valuation premium of technology stocks has eroded, with the US information technology sector's 12-month forward valuation relative to other sectors at its lowest level since mid-2020. Before the global AI investment boom, some technology stocks have seen a significant decline in valuation, according to Torsten Slok, the chief economist at Apollo Asset Management. BlackRock strategists also believe that fragmented geopolitics are supporting the defense industry and aerospace sectors, driving governments to strive for energy independence and increasing investment in supply chain resilience. These factors, along with the inevitable AI trend, "will collectively drive strong demand for core public infrastructure and power infrastructure." In a recent research report, Michael Hartnett, the chief equity strategist at Bank of America, and his team noted that commodities and Chinese tech stocks along with global semiconductor stocks are tactical core offensive targets for the post-war trade trend. They believe that the long-term steepening of the yield curve will lead to more tactical offensive trading themes in the coming quarters. Regarding Chinese tech stocks, they point to the continued leadership of "Made in China" in global manufacturing, the accelerated development of cutting-edge AI in China, the ongoing easing of US-China trade tensions, and potential key summit windows as drivers. For the semiconductor sector, they believe that AI hyperscalers (such as Google, Microsoft, and Amazon) are still engaged in a capital expenditure arms race, and as long as they are "more inclined to borrow and lay off employees, and not willing to retreat in the AI capex race," the entire semiconductor core chain still has value. Consumer stocks are repeatedly emphasized by Hartnett as the "best post-war trade theme" due to his expectation that fiscal and monetary policy bias will lean towards mitigating cost pressures on the populace and avoiding economic downturns coinciding with worsening trends in public opinion surveys. This Wall Street financial giant is capitalizing on the logic of the oversold rebound driven by "earnings certainty + high beta characteristics" and the continuous expansion of global AI expenditure as the core rationale for its bullish outlook on semiconductor stocks. Bank of America's strategists' latest forecast data shows that with the accelerated growth in the global core AI computation chain (led by Nvidia, Broadcom, TSMC, and Marvell Technology, with forward valuations ranging from 15x to 20x) and in areas such as storage/logic chips, 2.5D/3D advanced packaging, data center power chain, the global semiconductor market is expected to reach $2 trillion by 2030, with a compound annual growth rate of 20%. In comparison, the global semiconductor market size is expected to be less than $1 trillion by at least 2025. As the model size, inference pathways, and multimodal/agentive AI workloads drive an exponential increase in computational resource consumption, tech giants' capital expenditure is increasingly focused on AI computation infrastructure in the face of exploding AI computation demand. Global investors continue to anchor the "semiconductor stock bull market narrative" around Nvidia, AMD, and industry leaders in AI computation like Broadcom, TSMC, Micron, even as the Middle East geopolitical situation remains uncertain. This also means that investments related to AI training/inference, such as power, liquid cooling systems, and optical interconnection supply chain, will continue to be among the hottest investment themes in the stock market.