BlackRock, managing over $10 trillion in assets, upgraded emerging market equities to overweight on September 15, 2026. The firm expects earnings for the MSCI Emerging Markets Index to grow by more than 34% over the next 12 months, compared to roughly 20% for the MSCI USA Index.
The investment strategy focuses on companies producing AI hardware, including chips and memory modules, rather than AI model developers. Egon Vavrek, Head of Emerging Markets at BlackRock, identified South Korea and Taiwan as central to this thesis due to their dominance in semiconductor supply chains.
Emerging market equities currently trade at approximately 10 times forward earnings, while US equities trade at nearly 20 times. BlackRock previously held a neutral stance on emerging markets in June 2026 due to leverage concerns, but shifted its position following a period of deleveraging over the summer.
Beyond East Asian chipmakers, the firm is targeting commodities and physical infrastructure in Latin America. BlackRock emphasizes that hardware, power, materials, and infrastructure are the primary sectors experiencing accelerated AI-related spending.
