The AI trade isn’t over, but the playbook has completely changed.
According to BlackRock’s latest “Investment Directions” report, the smart money is moving upstream. After years of chasing hyperscalers, investors are now betting on the physical infrastructure required to keep them running.
📊 THE BLACKROCK SURVEY (732 EMEA Clients): The shift in sentiment is stark:
- >50% of investors now favor Power Providers (utilities/energy) as their top AI investment opportunity.
- 37% prioritize Infrastructure (grid, cooling, construction).
- Only ~20% still view Big Tech (Microsoft, Meta, Alphabet) as the most compelling opportunity.
🔌 THE “RACE FOR MEGAWATTS”: Why the pivot?
- Power Constraints: BlackRock estimates that AI data centers could consume up to 24% of US electricity by 2030. The bottleneck is no longer chips; it’s the grid.
- Capex Fears: With the “multitrillion-dollar race” to build data centers intensifying, investors are wary of Big Tech’s soaring borrowing costs and uncertain return on capital.
- Conviction Remains: Despite the rotation, only 7% of respondents believe AI is a “market bubble,” signaling a search for value rather than an exit.
💡 ANALYST TAKEAWAY: The “AI Phase 2” trade is officially here. Phase 1 was about Training (buying Nvidia/Hyperscalers). Phase 2 is about Inference & Power (buying the Grid). As Ibrahim Kanan (BlackRock) notes, it is now critical to “risk-manage megacap exposure” while capturing the differentiated upside of the energy transition.
👇 Portfolio Managers: Are you overweight Utilities and Industrials for 2026, or are you sticking with the Magnificient Seven?