BlackRock’s Egon Vavrek: AI hardware to drive emerging markets

BlackRock just went overweight on emerging market equities for the first time since pulling back earlier this year. The reason is straightforward: the firms building AI hardware, and the countries housing their supply chains, are about to have a very good run. Egon Vavrek, BlackRock’s Head of Emerging Markets and a Managing Director who joined the firm in April 2025, is positioning the strategy around what the industry calls “picks-and-shovels” players. These are the companies that don’t build the AI models themselves but manufacture the chips, memory modules, and physical infrastructure that make those models possible. The numbers behind the bet BlackRock raised its emerging market equities stance to overweight on September 15, 2026. The firm projects earnings growth of more than 34% for the MSCI Emerging Markets Index over the next 12 months. For comparison, the MSCI USA Index is expected to deliver roughly 20% over the same period. Emerging market equities are trading at approximately 10 times forward earnings. US equities sit at nearly 20 times. South Korea and Taiwan sit at the center of the thesis. Both countries dominate the global semiconductor and memory chip supply chains...