The Nasdaq Just Touched New Highs, and BlackRock Says the AI Trade is Back. Here's Why.

• Technology stock valuations, especially AI-exposed names, fell to multi-year lows in March but have since rebounded as investor sentiment returns to the AI theme
• The AI trade is expanding beyond the Magnificent 7 U.S. tech companies to include semiconductor suppliers, datacenter builders, and Asian markets like South Korea and Taiwan
• Major AI investments continue with Amazon committing up to $25 billion to Anthropic, while Tesla prepares to report earnings with focus on its transition toward AI and robotics

Summary: BlackRock Signals Return of AI Trade as Nasdaq Hits New Highs

Key Investment Shift: BlackRock's latest outlook recommends renewed investment in AI-related companies, marking a "back to the future" moment as the strategy regains momentum after losing steam earlier in 2025 and 2026. The Nasdaq Composite touched new highs today, driven by recovering confidence in technology stocks.

Valuation Opportunity: Technology stocks with AI exposure experienced pronounced "cheapening" in March, with broad market valuations declining to multi-year lows. This presents what BlackRock views as an attractive entry point for investors.

Geographic Expansion: BlackRock's Head of Investment Strategy notes the AI trade is broadening beyond U.S. Magnificent 7 tech giants into emerging markets, particularly South Korea and Taiwan. The trend now encompasses a wider range of companies, from semiconductor suppliers to datacenter builders.

Market Context: The AI trade previously faltered amid concerns about sustainability of sector investments and questions about when major players would see returns. This led investors to temporarily favor "old economy" strategies, including physical assets like ExxonMobil and McDonald's that are less vulnerable to AI disruption.

Upcoming Catalysts: Tesla reports earnings today as the first Magnificent 7 company to do so this quarter, with CEO Elon Musk expected to provide details on AI and robotics spending plans. Amazon recently announced up to $25 billion in investment in Anthropic, underscoring continued major capital deployment in AI.

Investment Implication: BlackRock believes the landscape has shifted back in AI firms' favor, with the strategy positioned to drive earnings growth as 2026 progresses and geopolitical concerns from the Iran conflict subside.