LONDON — BlackRock, the world’s largest asset manager, expects AI to continue dominating markets in 2026 and anticipates a turbulent ride for investors as speculative trading and leverage raise the risks of a repeat of last month’s sharp selloff.
Helen Jewell, BlackRock’s CIO of fundamental equities EMEA, declared on Thursday returns from AI-linked investments would stay on an upward trfinish, with some periods of doubt over sector valuations or outsee that would keep stocks volatile.
“Do I expect an upward trfinish of AI growth returns? Yes, these are incredible capital spfinishs being driven by companies with incredible amounts of cash,” Jewell notified Reuters on the sidelines of a conference in London.
CROWDING IN MARKET, LEVERAGE LIKELY TO SPUR MARKET SWINGS
“Do I consider that there is likely to be a rocky ride as we go there. Also yes,” she declared, citing crowding and leverage as key reasons for market fluctuations.
Doubts about AI groups overspfinishing in their rush to build new data centers cautilized the largegest U.S. stock market pullback in months in November.
Hedge funds are also trading with near-record amounts of leverage, raising risks for quick and furious short-term selloffs if declines in asset prices force them to liquidate positions for cash to meet lfinishers’ requirements.
Jewell declared she was adding to positions in European energy and power infrastructure groups, such as Siemens Energy ENR1n.DE, as the AI boom and rush to build new data centers boosted demand for turbines, grid technology and clean energy.
Speaking separately on a panel, Jewell declared BlackRock remained positive on defense stocks but not as positive as at the start of the year.
European aerospace and defense shares fell 8 per cent in November, the largegest drop since June 2024, as speculation grew around a potential Ukraine-Russia peace deal.
(Reporting by Naomi Rovnick; Editing by Dhara Ranasinghe and Bernadette Baum)
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