BlackRock is sharpening its focus on the companies that build and power artificial intelligence rather than the headline-grabbing platforms that sit on top. The firm is arguing that the clearest long term winners from the AI boom will be the “pick and shovel” providers of chips, networks, data centers and power, as global capital spending on this infrastructure keeps accelerating. That stance is already reshaping how big money is being deployed into the sector.
Why BlackRock sees AI infrastructure as the real growth story
At the heart of BlackRock’s view is a simple observation: the AI surge is still in its early investment phase, and the heavy spending is flowing into the physical backbone that makes large models possible. Ben Powell, a senior strategist at the firm, has argued that global capital expenditure on artificial intelligence infrastructure is not close to peaking, and instead is accelerating as more companies race to build and train models. That perspective frames AI not as a short lived hype cycle but as a multi year build out of data centers, high performance chips and networking gear, with Powell pointing to this infrastructure as the most reliable way to capture the upside of the trend in what he describes as a long runway for AI infrastructure capex.
BlackRock’s analysis of the broader market supports that focus on the plumbing rather than the platforms. As AI drives US equity performance, the firm’s research shows that the market has narrowed toward a small group of dominant companies, while the demands of training and running models are pushing power consumption and hardware requirements sharply higher. In that environment, BlackRock’s strategists argue that investing in the physical infrastructure that powers AI is no longer optional for enterprises, describing it as a matter of survival rather than choice as they track how As AI reshapes equity leadership and power demand. That combination of concentrated market leadership and rising infrastructure needs is exactly what makes the underlying suppliers so central to BlackRock’s thesis.
From gold rush metaphor to modern “pick and shovel” strategy
BlackRock’s positioning borrows directly from a classic investing playbook. In a gold rush, the most dependable profits often went to the merchants selling tools rather than to the prospectors hunting for nuggets, and the firm is applying that same logic to AI. Instead of trying to pick the eventual winners among consumer facing platforms or individual model providers, its strategists are emphasizing the companies that sell the essential hardware and services that every AI player must buy. That approach mirrors the definition of pick and shovel investing as a focus on the suppliers of critical tools and infrastructure in a fast growing industry, rather than on any single application, a strategy that has long been used to gain exposure to new technologies by backing the pick and shovel providers that benefit from a growing number of uses.
BlackRock’s own strategists have been explicit about how that metaphor translates into the AI build out. Speaking about the current cycle, they have highlighted the companies that provide the foundation of the artificial intelligence ecosystem, from advanced semiconductors to the electricity and air conditioning systems that keep data centers running. In their view, the firms that supply chips, networking, power and cooling are the modern equivalent of the tool sellers in a gold rush, because every AI model, whether built by a startup or a tech giant, depends on that same stack of infrastructure. That is why the BlackRock strategist noted that the most attractive opportunities sit with the providers of this base layer, including the companies that deliver the electricity and air conditioning systems that underpin the AI marketplace.
The chip and hardware names BlackRock is elevating
Within that framework, BlackRock is not speaking in abstractions, it is naming specific semiconductor and hardware companies as core beneficiaries of the AI capex wave. The firm has highlighted Broadcom Inc as one of its preferred ways to play the build out, pointing to the company’s custom chips and networking products that sit at the heart of hyperscale data centers. Broadcom Inc, which trades under the ticker AVGO, is seen as a key supplier to cloud providers that are racing to expand their AI capacity, and BlackRock’s strategists have placed it on a short list of “picks and shovels” stocks that stand to gain as those customers keep ordering more hardware, explicitly flagging Broadcom Inc and its AVGO shares as part of their bet on picks and shovels.
Alongside Broadcom, BlackRock has also singled out Marvell Technology, Inc as another beneficiary of the AI infrastructure boom. Marvell Technology, Inc, which trades under the ticker MRV, designs chips that are used in high speed data center networks and storage, making it a direct play on the traffic and data volumes generated by AI workloads. By grouping Broadcom Inc and Marvell Technology, Inc together, BlackRock is effectively building a basket of hardware names that sit one layer below the best known AI brands but capture a large share of the spending. The firm’s message to clients is that these suppliers of custom silicon, networking and storage are positioned to benefit from the same AI demand that is driving the platforms, but with business models that are more tightly linked to the underlying capex cycle.
Why BlackRock is downplaying the biggest AI platforms
BlackRock’s emphasis on infrastructure also reflects a deliberate decision to look past some of the most visible AI beneficiaries. Instead of centering its strategy on the largest consumer facing technology platforms, its strategists have urged investors to focus on the companies building the physical infrastructure that powers AI. They have contrasted the crowded trade in the biggest platform names with what they describe as a “super boom” in capital spending on data centers, chips and power systems, arguing that the more compelling risk reward sits with the suppliers to that build out. In public remarks, they have framed this as a choice to “forget” the most obvious AI stocks and instead pursue the pick and shovel stocks that are directly tied to the AI capex super boom, a stance captured in their call to look past Meta and Microsoft and concentrate on the physical infrastructure that powers AI.
That tilt away from the most crowded names fits within BlackRock’s broader macro view. The firm has described AI as one of several “Mega Forces” that are transforming financial markets, alongside themes such as stablecoins and other structural shifts. In its latest positioning, BlackRock has said it remains risk on as these Mega Forces reshape asset prices, and it has explicitly grouped AI with stablecoins in that category. By treating AI as a structural driver rather than a short term trade, and by pairing it with other long horizon themes, the firm is signaling that its preference for infrastructure suppliers is not a tactical bet but part of a longer term allocation to the forces it believes will define the next cycle, a stance reflected in its view that it Remains Risk on as Mega Forces Like AI, Stablecoins Transform Financial Markets.
How AI “picks and shovels” extend beyond chips
BlackRock’s focus on infrastructure is not limited to semiconductors and data center hardware. The firm’s research into important AI stocks also stretches into sectors such as healthcare, where AI is being embedded into devices and diagnostics. In one widely cited list of key AI holdings, BlackRock included Medtronic plc, which trades on the NYSE under the ticker MDT, as an example of how AI is being woven into medical technology. Medtronic plc (NYSE:MDT) makes and sells device based medical therapies, and the company is using AI to analyze spinal and cranial procedures, showing how the AI theme can run through industrial and healthcare names that are not typically labeled as technology stocks but still rely on advanced algorithms and data. That is why Medtronic and its NYSE listing under MDT appear among the most important AI stocks according to BlackRock’s holdings data.
By highlighting names like Medtronic alongside Broadcom Inc and Marvell Technology, Inc, BlackRock is effectively broadening the definition of AI infrastructure to include any company whose products are being reshaped by AI at a fundamental level. In practice, that means the pick and shovel strategy can encompass chipmakers, power and cooling providers, network equipment vendors and device manufacturers that embed AI into their offerings. The common thread is that these companies sell the tools, components and systems that others need in order to deploy AI, whether that is a hospital using Medtronic devices to analyze complex procedures or a cloud provider buying AVGO and MRV chips to expand its data center capacity. For investors, BlackRock’s message is that the most durable AI winners may be the ones selling into that demand rather than the brands that sit on top of it.
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Grant Mercer covers market dynamics, business trends, and the economic forces driving growth across industries. His analysis connects macro movements with real-world implications for investors, entrepreneurs, and professionals. Through his work at The Daily Overview, Grant helps readers understand how markets function and where opportunities may emerge.
