Test original english 2024-07-10 13:09

The AI juggernaut that has powered the S&P 500’s (^GSPC) rally this year is expected to keep fueling returns over the next six to 12 months, according to BlackRock analysts.

“A case can still be made to be risk on,” Wei Li, global chief investment strategist at BlackRock Investment Institute, said during a media roundtable on Tuesday.

Reasons Li and her team are bullish on equities include companies’ enormous capital expenditures on AI and increasing demand for low-carbon energy. Investments in AI data centers, for example, are expected to rise by 60%-100% annually in the coming years, said Li.

“When we add up all this cap-ex spend we get to numbers rarely seen in history comparable to the Industrial Revolution,” she said.

As of early July, a record $6.15 trillion was sitting in money market funds as the S&P 500 notched 36 record highs this year.

In the first half of 2024, the S&P 500 gained 14.5%, with a handful of stocks leading those gains. Notably, AI heavyweight Nvidia (NVDA) accounted for roughly one-third of the S&P 500’s gains during the first six months of the year, while an outperformance in quarterly results from large-cap tech has contributed to earnings growth in the S&P 500 year over year.