BlackRock’s Wei Li prefers US equities over government bonds, citing AI-driven earnings growth

Wei Li, BlackRock’s global chief investment strategist, said she prefers equities over both credit and government bonds from a “total portfolio perspective,” while noting there are still “good income opportunities within fixed income” worth leaning into.

The case for stocks over bonds

BlackRock has maintained an overweight stance on US equities, driven largely by a thesis that corporate earnings, particularly in AI-adjacent sectors, have more room to run. The firm revised its IT sector growth expectations upward throughout 2026, reaching approximately 44% growth for the sector this year.

BlackRock’s midyear outlook explicitly positioned US equities as overweight and long US Treasuries as underweight. The reasoning: persistent inflation uncertainty and rising term premiums make holding 10-year-plus government debt a losing proposition relative to the alternatives.

Selective, not dismissive, on fixed income

BlackRock’s Fall 2026 Investment Directions report, published on September 1, spelled out the firm’s preference for shorter maturities where yields remain elevated but duration risk is manageable.

The firm’s August 31 weekly commentary reinforced the message, advocating a “risk on” approach while emphasizing what it calls “durable income” in bonds.

AI as the growth engine

BlackRock’s midyear outlook highlighted AI infrastructure opportunities as a key reason to overweight US stocks. The approximately 44% growth forecast for the IT sector reflects this broadening thesis in hard numbers.

What this means for portfolio construction

BlackRock manages roughly $10 trillion in assets. The explicit underweight on long-duration government debt represents a bet that fiscal pressures and sticky inflation will continue to erode the risk-reward profile of holding 10-year and 30-year bonds.

With rates stabilized at elevated levels, shorter-dated Treasuries offer yields that would have been considered generous just three years ago. BlackRock’s approach treats these instruments as income tools rather than growth vehicles.