BlackRock analyst Kate Moore said recent market weakness should not stop investors from looking for opportunities, especially in companies related to artificial intelligence. The stock market declined at the beginning of the new quarter due to concerns that interest rates would remain high for a longer period of time and that the Middle East conflict might escalate —$S&P 500 Index (.SPX.US)$It's down nearly 4% this month.$Dow Jones Industrial Average (.DJI.US)$And the S&P 500 index fell for the second straight week last week. The “Magnificent Seven” stocks also showed a correction.$Advanced Micro Devices (AMD.US)$There has also been a correction in semiconductor manufacturer stocks. Since the end of October, these stocks have driven the rise driven by artificial intelligence.

However, according to Kate Moore, head of theme strategy for BlackRock's global allocation investment team, the recent decline does not mean that the market is sluggish. In an interview, Moore said, “I think after a very strong performance in the first season, a healthy pullback will go against the opposite and will not change the fundamentals.” A “favorable” macroeconomic environment should support higher stock market returns for the rest of the year.” There's also quite a bit of upside. In other words, the market won't be easy,” she added.

Moore believes there are opportunities in two of BlackRock's most promising topics: software and semiconductor companies related to artificial intelligence, and global commodity producers and mining companies, particularly copper-related companies.

“We are very optimistic about the continued demand for artificial intelligence and AI-related technologies. I think there's a lot of room for software companies to grow, and I think we're at the beginning of the half-cycle.” “After a clear lack of attention from investors over the past few quarters, I think it's time to take a good look at the companies that produce the materials needed for the energy transition, the materials needed for artificial intelligence and technological advancements. Their valuations... are very attractive,” she added.

As first-quarter earnings reports are released one after another, Moore believes corporate profits will grow “steadily”. She expects companies to confirm and raise performance guidelines because they will focus on cutting costs and achieving bottom-line profit growth, especially when consumer spending has proven to be flexible and inflation is cooling down. She expects the breadth of earnings growth this quarter to increase, which will support investors' long-term confidence in the stock market.

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Editor/jayden