BlackRock Sees 11.6% U.S. Earnings Growth as AI and Scarcity Push Bond Yields Higher
Updated
Updated · The Globe and Mail · Aug 13
BlackRock Sees 11.6% U.S. Earnings Growth as AI and Scarcity Push Bond Yields Higher
2 articles · Updated · The Globe and Mail · Aug 13
Summary
BlackRock says rising 2026 earnings forecasts and higher long-term government bond yields are not conflicting signals but twin effects of structural market shifts.
11.6% annual U.S. corporate earnings growth over the next five years is plausible, it argues, if AI adoption lifts productivity and profit margins enough to sustain unusually strong revisions.
The same forces are also driving a global bond reset: supply scarcity, heavier public borrowing, inflation uncertainty and fiercer competition for capital from governments, AI hyperscalers and companies.
That view leaves BlackRock overweight equities and underweight developed-market government bonds, investment-grade credit and newly high-yield debt, while favoring selected private credit, technology, healthcare and infrastructure equity.
Over a five-year horizon, the firm says investors should focus less on traditional asset-class labels and more on duration risk, manager selection and structural earnings drivers.
If AI demands push bond yields higher, could the resulting capital scarcity eventually choke off the very tech growth driving it?
As AI growth collides with severe power grid shortages, will physical energy infrastructure become the ultimate bottleneck for future corporate earnings?
With private credit expanding rapidly into retail portfolios, could hidden liquidity mismatches trigger a major financial crisis when rates normalize?