Rick Rieder oversees approximately $2.4 trillion in assets. black rock. He has been with the world’s largest asset management company for nearly 20 years and has seen a lot happen in the market. But he says there is nothing like this.
“I think we’re going through extraordinary times. I don’t think we’ve ever seen anything like this before,” he told CNBC’s Scott Wapner at the CNBC CEO Council Summit in Washington, D.C., on Tuesday.
Faced with a choice between “a great deal of uncertainty” and a rising market, Rieder concluded: “I think we should, I think we should stay where we are.”
This view is not new to leaders. He told Wapner last August that it was the best investment environment he had ever seen. But since then, nothing has changed his view to the contrary, even as mega-cap tech stocks have ramped up spending on AI and environmental concerns such as the dot-com bubble have grown. His view of the stock market is not necessarily that he expects significant profits from this. He said the market is “very strong” and “will probably continue to do well.”
But Rieder says structural and technical trends are in place to think there is more room for the bull market. For one thing, cash keeps coming in. “There’s a huge amount of cash,” he said. “Even with a large IPO calendar, there is still a huge amount of share buybacks going on, so I think the ‘technical’ is good,” he said.
He said part of the bullish story coming from the financing is related to developed market central bank interest rates that will remain high and “maybe even a little higher.”
The income stream generated from high-yield portfolios (6% to 7% without a lot of risk in today’s markets) benefits from the compounding effect, Rieder said, which also allows investors to ultimately “buy into some volatility,” he added.
A more pressing question among investors is whether the long-term risk of stocks is still worth it compared to the yield-earning opportunities of bonds. But Reeder, BlackRock’s chief investment officer for global fixed income and head of the global allocation investment team, says he wants to reallocate money to equities because buy-to-sell multiples and earnings growth projections are more reasonable than investors assume.
“First, let’s take away semiconductors and high tech and look at what the stock market is doing. It’s not that great,” he said. “Six percent.”
“There are days when you look at these stocks and think, ‘Well, that’s a little too much,'” Rieder said.
The answer is yes. Such days have become more frequent recently, with individual stocks like Snowflake, Micron Technology, Dell, and Hewlett-Packard Enterprise rising 20% and even 30% or more. On Tuesday, marvel technology Nvidia’s stock price rose 31% after CEO Jensen Huang said the company could become the next trillion-dollar company.
“Then I’ll go back and look at multiple… up your sleeves on this one,” he said.
Rick Rieder speaks at the CNBC CEO Council Summit in Washington, DC on June 2, 2026.
Aaron Clammage | CNBC
Rieder noted that the price-to-earnings ratios for tech and semiconductor stocks are now lower than they were in October of last year. However, the expected profit growth rate one year from now is even higher. “We’re talking about more than 20% profit growth, which is incredible,” he said.
In particular, the so-called “Mag 7” tech companies currently have a P/E ratio of 26x and are expected to have earnings growth of more than 30% in some cases (the current blend for the entire Mag 7 is 27.6%).
The S&P 500 index’s forward P/E ratio is currently 21 times, lower than last fall due to an increase in the index’s one-year earnings growth forecast, which is now just above 20%.
Reeder said buying at current multiples is “actually not that scary.”
For some stocks, he said, it may be easier to be confident that the demand function over the next two to three years is “pretty strong” than to be confident that earnings growth will exactly match Wall Street’s expectations. But for the Mag7 stocks, “the earning power that they’re generating… the future earnings potential is very strong,” he said.
Mr. Rieder currently serves on Alphabet’s Investment Advisory Board.
There are good reasons to be cautious, as Rieder says he has done with some stocks. “We’re concerned not only about the market as a whole, but also about the congestion in individual stocks, where we’re seeing some of the most crowded and dynamic trading we’ve ever seen,” Rieder said.
One of the ways he deals with rapid price movements in stocks is to hedge his stock exposures to avoid risk. Leaders are overwriting many stocks in their portfolios through the options market, especially those that have appreciated significantly in value. He cited Micron Technology, which is up more than 200% this year, as a recent example. “We sold call options at 95 volume right after it went up that high, so that’s pretty unusual. It’s not just that there’s buying going on… people are willing to pay for that continued acceleration. That’s remarkable,” he said.
He said the level of funding taking place in the market was also a reason to be cautious. “I’ll tell you, I don’t know how much of the weekend I spent, but a lot of it is with the new issuance that’s coming… the bond market, the stock market, convertible notes, different forms of loans. There’s a lot of fundraising going on, and that gives me pause. I mean, everything is coming as fast as today’s surge. … We still have to find room for some of these.”
The debate continues over the return on invested capital that will ultimately be generated from all this capital investment, especially in the wake of big-name tech stocks and broad-based stock appreciation linked to AI optimism, and the latest example of continued escalation in spending is Alphabet’s $80 billion stock offering, which is a risk factor that BlackRock is spending “a lot of time” researching, Reeder said.
But he added, “The difference between now and during the internet bubble is more different than I’ve ever imagined.”
Smart companies that are raising capital today not only need money for capital expenditures, but they are doing so alongside real cash flow that can be used to fund future growth. So compared to the dot-com bubble, “I feel a little more relaxed about it,” Rieder said.
The dynamic infrastructure spending environment may ultimately force stock market valuations and will remain a major unresolved issue. But Rieder said there is still room for more in the market in the short term, and he doesn’t think a decision will be made soon enough to change its stance. “My sense is that we won’t know the answer for a year or two,” due to strong upfront demand and a “sizable” backlog, he said.
In a separate interview with CNBC’s Leslie Picker in New York City on Tuesday, Goldman Sachs CEO David Solomon said the market is in “greed” mode, but that doesn’t mean it has to end anytime soon. Greed “can quickly turn into fear, but it doesn’t always happen,” Solomon said. “The frenzy could last for a long time. … It’s more likely to be early in the cycle than late,” he said.
