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About 100 BlackRock portfolio managers and executives gathered at our biannual Investment Forum earlier this month as a world shaped by supply accelerates. Speed and scarcity are defining how mega forces intersect. The AI buildout and Mideast conflict spur questions about financing, energy security, and interest rates as strong AI-driven earnings offset higher rates. Yet questions persist over valuations and the ultimate AI winners. These debates will shape our Midyear Outlook.
The investment landscape is being reshaped by a world shaped by supply – and mega forces are increasingly intersecting and driving investment opportunities. This is the overarching theme at our Midyear Investment Forum.
The AI buildout’s planned capital spending – already historic at the start of the year – has only accelerated. Mega cap hyperscaler investment estimates have soared in just two quarters, with projected annual spending now approaching $1 trillion by 2028 (see the chart below). This is testing the constraints we laid out in our 2026 Global Outlook.
First, hyperscalers are financing the buildout via increased debt issuance as rates reprice higher, in line with our leveraging up theme this year. The AI buildout’s big power needs for data centers show where the AI theme crosses with the energy transition. And constraints are increasing from political opposition to data centers.
The massive AI buildout has seen our Outlook’s micro is macro theme unfold. But big questions remain about how the AI theme will play out. At the company level, is AI adoption translating into greater profit margins or revenues – or is token usage for complex tasks eroding other gains? Will AI investments pay off and justify valuations – and who will capture the value? AI is already creating winners and losers – so what comes next for disrupted software companies? This comes as a growing pipeline of big AI-related IPOs – such as SpaceX, OpenAI, and Anthropic – will likely increase competition for capital.
The AI theme has driven U.S. and some regional stocks to all-time highs, even as bond yields and energy prices have jumped due to the Middle East conflict and resulting disruptions to energy flows and supply chains. That’s because AI-driven earnings growth has proved strong enough to help offset the drag from higher interest rates.
But disruption to the Strait of Hormuz is exposing the global economy’s dependence on critical energy flows: the longer the closure persists, the greater the risk of a broader supply shock – with a bigger hit seen to Europe and Asia. This reinforces how the mega forces we track are increasingly intersecting, as AI-driven demand collides with geopolitical fragmentation. These tensions were central to debates at the Forum, bringing together about 100 of BlackRock’s portfolio managers and investment executives.
The jump in bond yields this year highlights how traditional portfolio ballast is less reliable – reinforcing our diversification mirage theme and the need for a more dynamic, whole portfolio approach to investing. That’s why we see a greater role for active returns, with hedge funds and private markets as portfolio diversifiers in this environment.
How mega forces are forcing a rethink of the role of portfolio diversifiers – and portfolio construction itself – was another key topic of debate. On a tactical basis, our overweight to U.S. stocks has worked out so far this year – and we were quick to dial up risk after the outbreak of the Middle East conflict. We have stayed underweight long-term U.S. Treasuries – and 10-year yields are near one-year highs. The outlook for interest rates will also be a key debate.
The Midyear Forum helps us kick the tires on our tactical views for the second half of the year and refresh our investment themes for our Midyear Outlook on June 30.
Mega forces are shaping the investment environment – and the debate at our Midyear Forum. We stay overweight U.S. equities on the AI theme and resilient earnings but will stress test our tactical views.
Wei Li, Managing Director, is the Global Chief Investment Strategist at BlackRock Investment Institute at BlackRock Inc.
Jean Boivin, Managing Director, Head of the BlackRock Investment Institute Blackrock Investment Institute at BlackRock Inc., Jeff Shen, Co-Chief Investment Officer, Systematic Active Equities team – BlackRock, Beata Harasim, Senior Investment Strategist – BlackRock Investment Institute, Michel Dilmanian, Portfolio Strategist – BlackRock Investment Institute, contributed to this article.
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Content copyright © 2026 BlackRock Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc., or its subsidiaries in the United States and elsewhere. This article first appeared June 1, 2026, on the BlackRock website. Used with permission.
This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date indicated and may change as subsequent conditions vary. The information and opinions contained in this post are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by BlackRock, its officers, employees or agents. This post may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any of these views will come to pass. Reliance upon information in this post is at the sole discretion of the reader.
Image: iStock.com/yucelyilmaz
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