Billionaire Wisdom: Larry Fink's Bold Call — Go All-In on Equities for Maximum Returns

Larry Fink, who founded BlackRock, the world's largest asset management firm, in 1988 (initially under the purview of Blackstone), currently has a net worth of $1.2 billion. He serves as the Chairman and CEO of BlackRock, which currently manages $8.7 trillion in total assets. 

Fink has been a long-time advocate of equities investment, recommending investors put at least 80% of their total discretionary assets into equity investments or hard assets. Fink also stated that investors who have sufficient risk appetite could invest 100% of their total assets in equities.

While Fink acknowledges the current macroeconomic and geopolitical headwinds and their potential impact on the global equity market, the long-term trends are expected to remain positive, creating distinctive opportunities for investors. 

"I think, you know, for a long-term investor, long-term view, who can tolerate market volatility, you should be at least 80 percent in equities or hard assets," Fink said in an interview with CNBC. 

Let's look at some of BlackRock's largest equity holdings. 

Microsoft

Microsoft Corp. MSFT is BlackRock's equity holding, accounting for 5.17% of the total portfolio. MSFT was one of the best-performing Magnificent Seven stocks in 2022, as the tech giant's strategic investments and acquisition plans reaped substantial earnings for the company. Year-to-date, shares of MSFT have gained nearly 10.5%.

Microsoft has been taking active steps to emerge as the market leader in the generative artificial intelligence (AI) space, as the company signed a 10-year strategic partnership agreement with British telecom company Vodafone Group last month. 

Over the next decade, Vodafone plans to allocate $1.5 billion towards the development of cloud and AI services focused on enhancing customer experiences in collaboration with Microsoft.

Analysts expect MSFT's revenues to increase 15.2% year-over-year to $60.86 billion in the fiscal 2024 fourth quarter (ending March). The consensus EPS estimate of $2.83 for the ongoing quarter indicates a 15.5% improvement from the same period last year. Wall Street analysts expect MSFT's EPS to grow at a compound annual growth rate of 16.3% over the next five years.

Both Wedbush and Barclays have an "Outperform" rating on MSFT with a price target of $475, indicating a potential upside of up to 15%. 

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Amazon 

BlackRock holds approximately 627.17 million shares of Amazon.com Inc. AMZN, accounting for roughly 2.42% of the total portfolio. The world's largest e-commerce player was added to the Dow Jones Industrial Average Index (DJIA) on Feb 26, replacing Walgreens Boots Alliance, reflecting the evolving nature of the American economy. 

Amazon is currently working on raising fees levied on businesses that sell their products on the platform, which could significantly increase its profit margins. The company generated $140 billion in revenues from sellers' fees in 2023, accounting for nearly 25% of the online retailer's total revenues. 

Amazon's net sales grew 14% year-over-year to $170 billion in the fiscal fourth quarter of 2023, which ended Dec. 31, 2023. "This Q4 was a record-breaking holiday shopping season and closed out a robust 2023 for Amazon,” said Andy Jassy, CEO of Amazon.

Meta 

Meta Platforms Inc. META has made a robust comeback in fiscal 2023 after a disappointing 2022. The company's focus on AI has driven its success last year, as it launched Llama 2, a state-of-the-art large language model for coding. Meta's founder and CEO highlighted last year as the year of efficiency for the company. BlackRock holds over 157 million shares of META, accounting for 1.42% of its total portfolio. 

Meta's revenues increased 25% year-over-year to $40.11 billion in fiscal 2023, while its net income rose 201% from the same period last year to $14.02 billion last year. 

Following its stellar earnings report, Meta authorized its first-ever dividend payment of $0.50 per share on Feb 1, pushing the stock to gain over 14% intraday. The company also authorized a share repurchase agreement of approximately 5% of the total outstanding shares and currently has nearly $31 billion earmarked for this purpose. 

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