BlackRock said on 5 December 2025 that AI-linked investments are set to deliver further gains in 2026. The outlook was shared at a London event where the firm noted that rising leverage and concentrated trades could increase market instability across major equity markets.
What changed in BlackRock’s market outlook
Helen Jewell, BlackRock’s chief investment officer for fundamental equities in EMEA, told Reuters that data-centre spending by large global companies continues to rise at an unprecedented pace. She said these firms are deploying substantial capital into computing infrastructure, which supports expectations of stronger AI-driven returns next year.
Jewell added that she anticipates price swings as investors navigate periods of heavy speculation. Last month’s U.S. equity pullback, reported by Reuters, highlighted concerns that leading AI companies may be over-investing in data-centre projects.
Impact on investors and equity markets
Hedge funds are currently operating with near-record leverage, according to Reuters. Jewell said such conditions could magnify market reactions if asset prices fall even slightly. Forced liquidations could increase volatility if crowded trades unwind at the same time.
She said her portfolio is adding exposure to European energy and power-system companies, including Siemens Energy. BlackRock expects AI expansion to place sustained pressure on electricity networks and drive new investment in generation, turbines and grid technology.
Supporting data and sector movements
Jewell also commented on BlackRock’s view of defence equities during a separate panel. She said the firm remained positive on the sector, though sentiment had softened. European aerospace and defence shares declined 8% in November, their steepest monthly fall since June 2024, amid speculation about Ukraine-Russia peace discussions.
What happens next
BlackRock said AI-driven spending will continue shaping capital flows into 2026. The firm noted that liquidity, regulatory pressure and geopolitical shifts may influence volatility levels as leverage expands across parts of the market. Jewell said investors must balance AI enthusiasm with tighter risk controls.
