BlackRock (BLK) After Meta Data Center Deal Still Looks Undervalued In Popular Narrative
BlackRock (BLK) is back in focus after agreeing to fund most of a new data center campus with Meta Platforms in El Paso, Texas, a US$14b project tied to Meta’s AI infrastructure.
See our latest analysis for BlackRock.
The Meta data center venture comes on the heels of BlackRock’s recent earnings release, ongoing share repurchases and a dividend affirmation, with the stock showing a 13.77% 1 month share price return and a 60.58% 3 year total shareholder return, suggesting momentum is picking up after a softer 1 year total shareholder return.
If this BlackRock move has you thinking about how AI infrastructure could shape other opportunities, it is worth scanning the market using the 56 AI infrastructure stocks.
BlackRock now sits at the crossroads of a fresh AI infrastructure push and a share price that already reflects strong long term returns. So is most of the upside already in the rearview mirror, or could value still be on the table?
Most Popular Narrative: 16.8% Undervalued
BlackRock’s most followed narrative pegs fair value at $1,318.96, compared with the last close at $1,097.55, which points to a sizeable valuation gap that this Meta linked data center deal throws into sharper relief.
BlackRock has evolved from “an indexed asset manager” into a global platform spanning technology, public markets, and private markets, with a more recurring earnings profile and increasing relevance as financial infrastructure.
Want to know what keeps this BlackRock narrative leaning higher? The crux sits in double digit top line assumptions, firm margins and a richer future earnings multiple.
Result: Fair Value of $1,318.96 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, BlackRock’s narrative could be tested if the Meta data center economics disappoint investors, or if acquisition integrations fall short of the high margin expectations embedded in forecasts.
Find out about the key risks to this BlackRock narrative.
Next Steps
With sentiment on BlackRock split between opportunity and caution, it makes sense to check the numbers yourself and move quickly to form your own view using the 3 key rewards and 2 important warning signs.
Looking for more investment ideas beyond BlackRock?
If you are weighing what BlackRock’s latest moves mean for your portfolio, this is also a great moment to widen your watchlist with fresh ideas.
- Spot potential value plays early and compare them against BlackRock by running your filters through the 49 high quality undervalued stocks.
- Strengthen the defensive side of your portfolio by focusing on companies with healthier finances using the solid balance sheet and fundamentals stocks screener (48 results).
- Hunt for lesser known opportunities before they hit the mainstream by checking the screener containing 20 high quality undiscovered gems.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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