BlackRock Investment Institute keeps neutral view on Chinese stocks, stays overweight U.S. on AI winners

According to CNBC, BlackRock Investment Institute said the winners of the artificial intelligence race will mostly be U.S. stocks, while maintaining a neutral view on Chinese stocks and staying overweight on the U.S. in a report Monday. BlackRock said China has advantages in parts of the AI value chain including manufacturing and batteries, but added that manufacturing strength alone does not guarantee attractive equity returns and reinforced its preference for active investing rather than broad regional calls. The report noted the Nasdaq Composite has gained a little over 12% this year and mainland China’s tech-heavy ChiNext index has risen more than 20%, while the MSCI China index is down over 10% and major U.S. indexes have climbed more than 10%. BlackRock said Beijing has rolled out policies to support domestic AI development amid U.S. restrictions on high-end tech, but it is less clear how companies can generate profits given slower growth and competition, adding that cheap, open-source AI could drive adoption without necessarily translating into AI-provider profitability. The firm said it sees opportunities in “physical AI,” where the technology is integrated into hardware such as robotics, and said its view is to buy stocks exposed to scarce industry inputs, including infrastructure plays from China to Latin America.