$30 Billion BlackRock Fund Could Be Big Boost for These Portfolio Plays

The countdown to 2 p.m. ET and what the Fed says and does about interest rates has begun.

Naturally, we’ll be breaking it all down and sharing our thoughts and implications with you. But first, let’s talk about some Microsoft MSFT and Nvidia NVDA news from Tuesday night that supports the demand curve for those positions as well as a few others in the Portfolio and our bullish stance on them.

Despite these announcements, we are going to stay on the sidelines until we’ve digested the Fed’s policy statement, updated set of economic projections and Fed Chair Powell’s presser comments.

Remember also that Friday is a triple-witching day. For newer members, Tuesday's video explained what that is and how it can make for a volatile time in the market.

BlackRock, Microsoft and Nvidia

Fresh off its 10% dividend hike and new $60 billion buyback program that we discussed in Tuesday's video, Microsoft has been named a general partner in BlackRock’s BLK new $30 billion artificial intelligence investment fund.

The fund will be part of a new infrastructure investment unit at BlackRock dubbed Global Infrastructure Partners and will “make investments in new and expanded data centers to meet the growing demand for computing power, as well as energy infrastructure to create new sources of power for these facilities."

In a move that isn’t all that surprising, NVIDIA will leverage its expertise in AI infrastructure to support the effort. While the initial push will be for $30 billion, reporting suggests an even larger effort could come about, as high as $100 billion, if debt financing is utilized.

Because we’re investing in the shares of Nvidia, Marvell MRVL, Eaton ETN, United Rentals URI, Vulcan Materials VMC and Waste Management WM, we’ve known about the forecasted construction for data centers and the looming electricity pain point. In addition to capital spending efforts from Alphabet GOOGL, Amazon AMZN, Meta META and Microsoft, this BlackRock-Microsoft partnership adds credence to those forecasts. The timing, as the Fed enters a rate-cutting cycle that should improve project hurdle rates and borrowing costs, is another sweetener.

If we’ve learned one thing from the stimulus programs out of Washington, D.C., over the last few years, the timing associated with these programs tends to take longer than expected. But that could be different this time around, largely because these are private investment dollars, not ones tied to government programs.

This certainly looks to extend the demand curve for our holdings, but we will be looking for more program details, including the timing and size of projects. Because of the copycat nature of these kinds of announcements, we’ll be on the lookout for similar announcements that might include Amazon, Alphabet, Meta and other firms.

Salesforce, Alphabet and Nvidia

During its Dreamforce event, Salesforce CRM announced new collaborations with Alphabet and Nvidia to advance the capabilities of its Agentforce artificial intelligence agents. The extended partnership with Google allows customers to deploy AI agents that can operate across both Salesforce Customer 360 and Google Workspace apps. Salesforce will also work with the Nvidia AI platform, which includes accelerated computing and AI software, to optimize predictive and generative AI workflows.

This is all part of building the framework to support the claim put forth by Salesforce management that it expects billions of its AI assistants to be deployed by customers over the next few years. More details on that will be shared over time, including the various kinds of assistants, but when we assemble comments like these and marry them with efforts by Microsoft and ServiceNow NOW, the question of AI adoption in the enterprise is being put to rest.

As we think about that adoption curve, it brings us back to the demand curve for AI chips, data centers and power.

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At the time of publication, TheStreet Pro Portfolio was long MSFT, NVDA, MRVL, ETN, URI, VMC, WM, GOOGL, AMZN, META and NOW.