BLK: AI Infrastructure Expansion Will Drive Earnings Power And Momentum

Analysts have nudged their average price target for BlackRock slightly higher, to a range clustered around the low to mid $1,300s. This reflects incremental upgrades to long term organic growth expectations, improved earnings power visibility toward roughly $100 per share, and confidence in the firm’s ability to leverage recent Q3 momentum and strategic initiatives such as its AI infrastructure partnership and alternative assets expansion.

Analyst Commentary

Street research remains overwhelmingly constructive on BlackRock, with several firms lifting price targets into the low to high $1,300s and even approaching $1,400 following the latest Q3 update. The revisions largely reflect better confidence in the durability of long term organic growth, stronger earnings power, and the monetization potential of recent strategic moves in alternatives and AI infrastructure.

Bullish Takeaways

Bullish analysts cite the Q3 earnings beat and rising EPS estimates as validation that BlackRock can credibly compound toward roughly $100 in earnings power. This is seen as supporting higher target multiples and expanded upside to current valuation.
Robust long term net inflows of approximately $171B, led by iShares ETFs and private markets, are viewed as evidence that BlackRock is still gaining share across key product categories. This underpins visibility into sustained organic base fee growth.
The full quarter inclusion of HPS Investment Partners and its contribution to higher fee rates reinforces the thesis that BlackRock's alternatives and private markets platform can be an increasingly meaningful driver of both revenue mix upgrade and margin expansion.
The $100B AI infrastructure partnership and acquisition of Aligned Data Centers are framed as early proof points that BlackRock can leverage its scale and capital to capture emerging AI and data center themes. This is described as adding a differentiated growth vector versus traditional asset managers.

Bearish Takeaways

More cautious analysts highlight that recent price target hikes already embed optimistic assumptions for organic growth and multiple expansion. This is seen as leaving less room for execution missteps or macro driven market volatility without pressuring the valuation.
The sizable capital commitment to AI focused data center infrastructure heightens project execution and integration risk, and there is uncertainty around the timing and consistency of cash flows relative to traditional fee based asset management.
As alternative assets and private markets become a larger share of the business, investors must weigh the benefits of higher fee rates against potentially lumpier fundraising cycles and more complex risk management, which could introduce earnings cyclicality.
Some observers note that sector wide re ratings in traditional asset managers following strong markets and rising benchmarks could moderate if equity or bond returns normalize. This may cap further multiple expansion even if BlackRock continues to execute well operationally.

What's in the News

BlackRock's Global Infrastructure Partners and ACS are nearing a $26.8 billion partnership for ACS's Digital and Energy unit, which includes significant data center assets, underscoring BlackRock's push into digital infrastructure and AI related capacity (Reuters).
An investment consortium including BlackRock, Global Infrastructure Partners, Nvidia, Microsoft and xAI agreed to acquire Aligned Data Centers in a roughly $40 billion deal, positioning BlackRock at the center of large scale AI data center build out (Financial Times).
Global Infrastructure Partners, owned by BlackRock, is in advanced talks on a potential $38 billion acquisition of utility group AES, one of the largest infrastructure takeovers contemplated in the sector and further evidence of BlackRock's scale in real assets (Financial Times, Bloomberg).
BlackRock ETFs invested more than $3 billion in bonds tied to Hyperion, a $27 billion data center platform majority owned by Blue Owl and partly by Meta, highlighting the firm's growing exposure to AI oriented digital infrastructure financing (Wall Street Journal).
FBI and federal prosecutors are probing telecom executive Bankim Brahmbhatt after BlackRock's HPS Investment Partners and other lenders accused him of fabricating collateral on loans exceeding $500 million, raising scrutiny around a disputed private credit exposure (Wall Street Journal).

Valuation Changes

Fair Value: nudged slightly lower, from $1,328.64 to $1,319.27 per share, reflecting a modest reduction in intrinsic value estimates.
Discount Rate: risen marginally, from 8.31 percent to 8.35 percent, indicating a slightly higher required return on equity risk.
Revenue Growth: increased very slightly, from 11.09 percent to 11.11 percent, signaling a minor upgrade to long term top line expectations.
Net Profit Margin: edged down fractionally, from 31.64 percent to 31.62 percent, implying a nearly unchanged outlook for profitability.
Future P/E: dipped slightly, from 26.19x to 26.03x, suggesting a small decrease in the multiple applied to forward earnings.

Strategic acquisitions and emerging market expansion position BlackRock to benefit from rising demand for alternatives and global wealth growth.
Technology integration and core product innovation support client retention, recurring revenues, and resilience against margin pressures.
Intensifying margin pressure, increased private market and tech risks, regulatory headwinds, and potential EPS dilution could hinder sustained growth and profitability.

Catalysts

About BlackRock

A privately owned investment manager.What are the underlying business or industry changes driving this perspective?

BlackRock's expansion into private markets through acquisitions like HPS Investment Partners, GIP, and ElmTree positions the company to capitalize on the secular shift of institutional assets into alternatives and infrastructure, driving higher-fee revenue streams and long-term earnings growth.
The company's global platform and targeted expansion in emerging markets (e.g., India and Middle East) align with the continued growth in global wealth and the investable asset base, supporting AUM growth and future fee accretion as capital markets and retirement systems develop in these regions.
BlackRock's deepening integration of technology-via Aladdin, Preqin, and eFront-responds to increasing demand for analytics and transparency, strengthening client retention and cross-sell opportunities, which should support recurring revenue growth and margin resilience.
Leadership in retirement and the proliferation of public-private target date funds positions BlackRock to benefit from long-term demographic trends and regulatory changes that drive greater inclusion of private assets in defined contribution plans, supporting durable AUM inflows and higher-margin product offerings.
Sustained innovation and record flows in core products like fixed income and digital asset ETFs-particularly in under-penetrated regions such as Europe-support continued organic revenue growth, while fee compression is partially offset by scale efficiencies and product diversification.

BlackRock Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming BlackRock's revenue will grow by 9.9% annually over the next 3 years.
Analysts assume that profit margins will increase from 29.7% today to 31.0% in 3 years time.
Analysts expect earnings to reach $8.9 billion (and earnings per share of $57.82) by about September 2028, up from $6.4 billion today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 25.7x on those 2028 earnings, down from 26.7x today. This future PE is lower than the current PE for the US Capital Markets industry at 26.7x.
Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.25%, as per the Simply Wall St company report.

BlackRock Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Persistent industry-wide fee compression, especially in ETFs and passive products (where BlackRock is a leader), continues to pressure net margins as evidenced by a 0.4 basis point decline in the effective fee rate and commentary about lower performance fees impacting operating margins; this trend could erode revenue growth even amidst record AUM.
Ongoing expansion into private markets (GIP, HPS, Preqin, ElmTree) introduces elevated integration, execution, and operational risks (including higher G&A and compensation) at a time when margins are already down year-over-year; failure to realize expected synergies or manage increased expenses could squeeze overall earnings and profitability.
Structural regulatory and litigation risks remain significant for BlackRock's core ambitions, especially as the company looks to innovate with private allocations in retirement products (i.e., required reform in advice/litigation for U.S. DC plans); heightened regulatory scrutiny or adverse legal developments could impede adoption, limit product launches, and negatively impact potential revenues.
Technology investments such as Aladdin, Preqin, and tokenization initiatives bring higher near-term spend and increase exposure to cyber, obsolescence, and operational failures; should these platforms fail to maintain industry leadership or become subject to costly disruptions, BlackRock's subscription and technology revenue-and client stickiness-could deteriorate.
Increased share issuance related to acquisitions (e.g., up to 13.8 million new shares possible with SubCo units and RSUs) and higher compensation ratios associated with performance-related pay raise the risk of EPS dilution for shareholders and may offset the benefits of rising operating income, putting pressure on long-term per-share earnings growth.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $1167.2 for BlackRock based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $1252.0, and the most bearish reporting a price target of just $1000.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $28.7 billion, earnings will come to $8.9 billion, and it would be trading on a PE ratio of 25.7x, assuming you use a discount rate of 8.3%.
Given the current share price of $1105.67, the analyst price target of $1167.2 is 5.3% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

Have other thoughts on BlackRock?

Create your own narrative on this stock, and estimate its Fair Value using our Valuator tool.

Create Narrative

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

BLK: Data Center Acquisitions Will Drive Expansion in AI Infrastructure Markets