BlackRock Shifted AI Focus to Physical Infrastructure
The firm advised investors to prioritize hardware and energy over software to mitigate AI commoditization.
Updated on Sept. 29, 2026 in Data Centers
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On September 29, 2026, BlackRock recommended that investors target physical infrastructure stocks to capture value in the evolving AI market. The firm warns that AI software models may face increasing pricing pressures as the buildout shifts toward computing power and energy.
Why it matters
The global AI buildout is creating binding resource bottlenecks, making the physical hardware required to run these models more valuable than the software itself. Investors are now pivoting toward essential assets like data centers and electricity producers that support extreme computational density.
Profits at Chinese electronic-device makers surged 110% during the first seven months of 2026. Meanwhile, high-bandwidth memory capacity remains completely sold out through the end of 2026.
The players
BlackRock
BlackRock is a global investment management corporation that provides institutional and retail investors with asset management and advisory services.
Micron Technology
Micron Technology is a major manufacturer of computer memory and computer data storage, including dynamic random-access memory and flash memory products.
Vertiv Holdings
Vertiv Holdings is a provider of digital infrastructure and continuity solutions for data centers and communication networks.
Constellation Energy
Constellation Energy is an American energy company that operates a large fleet of carbon-free nuclear power plants.
The details
BlackRock identified firms such as Micron Technology, Vertiv Holdings, and Constellation Energy as primary beneficiaries of the infrastructure-heavy AI surge. Hyperscalers are now increasingly securing reliable base-load power by signing decades-long Power Purchase Agreements with nuclear energy operators.
Timeline
Profits for Chinese electronic-device makers rose 110% during the first seven months of 2026.
System memory capacity is sold out through 2026.
BlackRock issued its analysis on September 29, 2026.
Market Landscape
This move reflects the AI data center resource bottleneck trend, where physical constraints dictate the ceiling for software growth. The investment pivot marks a departure from pure-play software valuation toward hardware and base-load energy providers.
Retail investors may see a shift in portfolio performance as capital flows away from speculative AI software and into established infrastructure companies. The growing demand for power electronics and batteries could also influence energy costs and supply chain stability for consumer electronics.
The takeaway
Investors should note that the most durable profits in the AI era may stem from the boring physical assets that keep data centers running. Reliable base-load energy and hardware supply chains are likely to prove more stable than software models currently facing commoditization.
Further reading
For more information on the industry, visit the Data Centers section.
Source note: This article includes information reported by Benzinga.
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