Big investor gets into BlackRock stock — but not for its traditional area of dominance
Every weekday, CNBC Investment Club with Jim Cramer publishes Homestretch, an actionable afternoon update just in time for the final hour of trading on Wall Street. The Dow, S&P 500 and Nasdaq rose in afternoon trading Tuesday after swinging between gains and losses earlier in the session. The usual suspects of late, namely enterprise software names, have started to run into trouble again, as concerns continue that artificial intelligence will harm their business. Salesforce fell more than 3%, while CrowdStrike and Palo Alto Networks fell more than 4.5% and 2%, respectively. We can’t defend Salesforce here, we can only hold on; But as we have said many times, our cybersecurity names should not be painted with the same brush. Palo Alto Networks reports earnings after the close on Tuesday. We’ve said before that we’re considering another CrowdStrike purchase if the stock declines further. Apple shares rose more than 3.5% and were our biggest Club gainer on Tuesday. The tech giant is planning a showcase next month where the latest budget iPhone could be unveiled. Jim Cramer says Apple is the big winner of the AI disruption because it supports Alphabet without sacrificing free cash flow on Apple’s capital expenditures, and he repeated that this weekend. We bought more Alphabet on Tuesday as the stock continued its decline. Investors selling shares of Google’s parent company are shortsighted. Of course, Alphabet’s capital spending plans are quite high, but its AI push is working, as its latest earnings report shows. ValueAct took a stake in BlackRock, and we were intrigued by the hedge fund’s investing logic. During the “Master Investor” podcast with CNBC contributor Wilfred Frost, co-CEO Mason Morfit explained this position, arguing that BlackRock is uniquely positioned to be a leader in investment management software with its Aladdin platform, which is used in the investment industry to manage risk, execute trades and more. As AI technology matures, Morfit said he believes Aladdin could help automate investment decisions and allow portfolios to be managed “much better, faster and cheaper than a human could.” This type of technology offering also extends BlackRock’s reputation beyond that of a leading exchange-traded fund operator with its iShares family of funds. “He was already the top hunter,” Morfit said in the episode aired on Tuesday. “But with the software DNA being ingested into the dinosaur body, it becomes more and more powerful.” The logic of ValueAct’s position caught our attention because it underscores how BlackRock is repositioning itself at a time when ETF fees are under competitive pressure. It also does this through a series of deals in the increasingly popular private lending space. BlackRock, for example, completed its $12 billion acquisition of private credit manager HPS Investment Partners last year. On the tech side, BlackRock’s acquisition of private market data provider Preqin – although it doesn’t have the biggest price tag – further demonstrates its tech capabilities. All of this allows the firm to diversify its revenues and tap into faster-growing markets with higher fees. In 2025, BlackRock’s technology segment, home to Aladdin and Preqin revenue, totaled just under $2 billion; which accounted for approximately 8% of companywide revenues. BlackRock shares were down slightly on Tuesday, losing less than 1% year to date. The company sees an acceleration in orders heading into 2026, a trend that wasn’t present at the same point a year ago, Dover CEO Andrew Tobin said Tuesday at the Barclays industry conference. This gave them confidence in the 2026 installation. From a business perspective, Tobin believes that the Refueling Solutions business in the Clean Energy segment is about to enter a three-year cycle of advancement. Dover is also bullish on its Climate and Sustainability business, where it is investing in brazed plate heat exchangers to meet data center-related demand. When asked which segment he was most concerned about, Tobin answered the vehicle aftermarket business. He does not foresee a decline in sales this year but acknowledged that business is being diverted to the struggling European market. Following the closing bell on Tuesday will be the first of two Club name earnings reports. The aforementioned Palo Alto Networks will be the main event for us. (Texas Roadhouse will be out later in the week.) Palo Alto CEO Nikesh Arora will have the opportunity to rebut concerns that AI will take away market share from cybersecurity providers. We’re also interested in learning more about the company’s announcement Tuesday morning that it plans to acquire agency endpoint startup Rio. Also on Tuesday afternoon are earnings from Cadence Design Systems, Devon Energy, Kenvue and Toll Brothers. On Wednesday, it’ll be all about the economy, with housing starts and industrial production data in the morning and minutes from the last Federal Reserve meeting in the afternoon. (See here for a complete list of stocks in Jim Cramer’s Charitable Trust.) When you subscribe to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trading alert before buying or selling a stock in his charitable foundation’s portfolio. If Jim talked about a stock on CNBC TV, he waits 72 hours after issuing the trading alert before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER WITH THE DISCLAIMERS. NO CIVIL OBLIGATIONS OR DUTIES EXIST OR SHALL BE RESULTING FROM YOUR RECEIVING ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULT OR PROFIT CAN BE GUARANTEED.
