Blackstone - 2026 Investment Perspectives: Mid-Year Update

June 30, 2026

Halfway through 2026, the investment perspectives we outlined in our January outlook remain largely intact.

Notably, our biggest theme, artificial intelligence (AI), has seen extraordinary demand growth that is converging with constrained, capital-intensive supply and expanding the need for scaled private markets solutions.

The opening part of the year has once again been shaped by geopolitical and macro shocks. This marks the fifth time in six years that markets have faced a major disruption within the first six months of the year — beginning with COVID-19, followed by the war in Ukraine, the 2023 regional banking crisis, tariff tensions, and now conflict in the Middle East. Despite these headwinds, the underlying economy has shown remarkable resilience with the volatility providing opportunities for investors to lean in, not retreat.

The data continues to point to a durable economic backdrop, especially in the US. Growth is solid, corporate fundamentals remain healthy, and labor markets are balanced and improving. Inflation has some near-term headwinds, but wage moderation, shelter disinflation, and strong productivity point to cooling over time.

While our portfolio data and outlook remain positive, challenges do exist, including ongoing geopolitical risk, fiscal pressures, uneven global growth (particularly in Europe), AI-related disruption, elections, and other complexities. The amount and rate of change will continue to create big headlines, challenges, and imbalances but also big opportunities for those that can see through the noise and provide investment capital.

Navigating this environment requires a disciplined focus on fundamental data rather than the news cycle. At Blackstone, that discipline is powered by a significant and growing data advantage. Across our ecosystem we analyze data across 280+ portfolio companies, 5,100+ credit issuers, ~740,000 portfolio company employees, and ~13,000 real estate assets, ^{[ 1 ]} to identify patterns and connect dots across markets. ^{[ 2 ]} This depth of proprietary information — spanning portfolio company operating metrics, transaction data, and real-time market signals — provides a differentiated view of economic activity that informs how we underwrite, manage portfolios, and assess risk.

One of the clearest examples is what we referred to as “The Main Thing” back in our January Outlook: artificial intelligence. Our data advantage gave us early conviction in the growth of digital infrastructure, leading to our investment in QTS, a data centers business, five years ago — approximately 18 months before ChatGPT released its first version. Since then, we’ve seen exponential demand for QTS services from hyperscaler customers. As a result, QTS’ leased capacity, measured in megawatts, is 15x larger than when we invested five years ago. ^{[ 3 ]}

Today, our investments across the broader AI infrastructure ecosystem represent a meaningful portion of the firm’s assets, with conviction extending beyond data centers to adjacent areas such as power, cooling, equipment, LLMs, and neoclouds. We expect that exposure to grow as demand in these sectors continues to expand and investor appetite for contracted cash flows continues to increase. This CapEx cycle, with its enormous demands across the picks and shovels of the AI revolution, is making hard-asset investing expertise a key connective thread across all asset classes (see Figure 1).

Figure 1
US Data Center Construction Spending ^{[ 4 ]}
Monthly Spend (USD in Billions; Seasonally Adjusted Annualized Rate)

Critically for the broader economy, as AI diffusion progresses, it has the potential to sustain and further accelerate the productivity upswing already underway. Against this backdrop, we revisit the five key factors shaping markets: AI, Growth, Labor Markets, Inflation, and Capital Markets.

Key Takeaways

01 | AI remains the defining force shaping the investment landscape. A multi-year CapEx cycle across data centers and power generation is underway, while adoption across the real economy is laying the foundation for a productivity upswing.

02 | Growth has proven resilient but uneven. In the US, solid corporate balance sheets, continued earnings strength, and steady consumer demand are supporting activity, but geographic and demographic dispersions persist.

03 | Labor markets have normalized and are now starting to strengthen. Hiring challenges have eased, wage pressures have moderated, and improving labor productivity is becoming visible in the data.

04 | Inflation features short-term pressures but should cool over time. The immediate outlook has grown more complicated as a result of higher energy prices and CapEx-driven input cost pressure, though the longer-term outlook remains constructive. Cooling rents should continue to be a meaningful offset given shelter is the largest component of US CPI. And in the longer run, stronger productivity, driven in particular by AI, points to a more favorable inflation environment.

05 | Private markets are increasingly well positioned to help bridge the funding gap between rising demand and constrained supply. Structural shortages in compute, power, and physical infrastructure are creating extraordinary opportunities where scale and execution capabilities matter most.

Five Factors Driving Markets

1. Artificial Intelligence — The Main Thing

AI investment continues to accelerate and remains the most powerful force shaping the global economy. AI-linked revenues are growing rapidly — projected to increase 30x between 2024 and 2027 ^{[ 5 ]} — with hyperscalers committing more than $5 trillion to broader data infrastructure through 2030. ^{[ 6 ]} 2026 annual spend is now projected at roughly $769 billion, up from the roughly $600 billion anticipated in our January outlook (see Figure 2). ^{[ 7 ]}

Adoption across the real economy is also accelerating:

Generative AI usage reached roughly 48 billion hours in 2025, up from 13 billion in 2024 — nearly a threefold increase. ^{[ 9 ]}

AI queries are far more compute intensive than traditional search — roughly 10x for simple prompts and up to 10,000x for video generation. ^{[ 10 ]}

Enterprise adoption is increasingly shifting from experimentation toward deployment, with Blackstone portfolio company adoption roughly 50% (see Figure 3). ^{[ 11 ]}

Figure 2
Data Center CapEx by 5 Largest Hyperscalers ^{[ 8 ]}

Figure 3
Blackstone CEO Survey: In what stage are you using AI in your business? ^{[ 12 ]}

BX CEO Survey: In what stage are you using AI in your business?

As a result, chips, power, and data centers are simultaneously the three primary pillars of AI as well as the constraints on growth and adoption.

Global electricity demand is expected to rise more than 50% over the next five years, with US electricity demand alone projected to increase roughly 40% over the next decade, ^{[ 13 ]} while aging grids and transmission bottlenecks are extending time to power in some markets from roughly one year historically to as long as seven years or more today. ^{[ 14 ]}

In this environment, value capture in AI is likely to concentrate among businesses that control scarce physical assets and durable competitive advantages, particularly energy infrastructure providers, industrial companies with physical moats, and sectors positioned to benefit from downstream productivity gains.

2. Growth — Resilient, but Uneven

Corporate fundamentals remain healthy: earnings are on track for seven consecutive quarters of double-digit growth, ^{[ 15 ]} and corporate interest expense relative to revenue is near its lowest level in roughly fifty years. ^{[ 16 ]} Business sentiment reflects this underlying strength. More than 90% of our Blackstone CEOs say they expect business conditions to remain steady or improve over the next 6-12 months. ^{[ 17 ]}

Meanwhile, in terms of hard data, revenue across Blackstone portfolio companies grew 10% in the first quarter, led by Asia at 14% and the United States at 11%, with Europe growing more modestly at 2% (see Figure 4). ^{[ 18 ]} Energy-related sectors showed the strongest expansion, reflecting demand tied to electrification and data center development.

Consumer spending has held up in aggregate, but as we flagged back in January, the environment remains bifurcated across income groups with continued robust discretionary spending in high-end travel and hospitality versus weaker economy demand at the lower end. That said, while lower-income households continue to face pressure, we are starting to see some green shoots both within Blackstone properties and at the national level where hotel RevPAR growth has accelerated to roughly 6% year-over-year over the trailing 90 days and is now positive across all chain scales, with economy hotels +1.4% (see Figure 5). ^{[ 20 ]}

Figure 4
Blackstone BCP US Portfolio Revenue Growth ^{[ 19 ]}
(% YoY)

Figure 5
US Hotel Revenue Growth ^{[ 21 ]}
(% YoY)

3. Labor Markets — In Balance

Labor markets have cooled from post-pandemic tightness and show increased fundamental balance. Hiring difficulty has declined sharply among our surveyed companies, with only 29% of CEOs reporting challenges filling roles, yet 63% still expect to grow headcount over the next six months ^{[ 22 ]} — a combination that suggests normalization rather than deterioration (see Figure 6).

Within our portfolio companies, wage growth has stabilized at around 3% year-over-year, down from nearly 5% in early 2024 (see Figure 7). ^{[ 23 ]} The underlying mix is also changing: wage growth is firmer in our hard-asset-linked businesses such as power and logistics, at 3.4% year-over-year, compared with roughly 1.8% in our consumer services companies — reflecting where labor demand is strongest. ^{[ 24 ]}

Figure 6
Blackstone CEOs Experiencing Hiring Challenges ^{[ 25 ]}

Figure 7
Blackstone US Portfolio Wage Growth ^{[ 26 ]}
(% YoY)

Encouragingly, the latest 2Q Blackstone Chief Human Resource Officer (CHRO) survey shows +5% year-over-year net headcount growth across our companies, as larger industrial investment across data centers, power, reshoring, supply chains, and electrification begins translating into job creation. ^{[ 27 ]}

This is also where we see the early signs of a broader blue-collar job renaissance, driven by the scale required to build the AI infrastructure. At QTS, for example, 13,000 workers were on data center job sites over a year ago, and that number is expected to exceed 40,000 by year-end, underscoring the job creation potential of this CapEx cycle (see Figure 8).

Just as importantly, these are high-quality jobs: QTS alone is expected to pay more than $5 billion in blue-collar wages this year, with average annual salaries above $150,000. The labor intensity of the AI buildout is already visible in skilled trades, with projected electrician demand increasingly outpacing supply through 2030. ^{[ 28 ]}

The most significant development, however, is productivity. In the last three years, US labor productivity is trending nearly 2x higher than the prior 15 years — and this growth is occurring before AI has meaningfully penetrated the workforce. ^{[ 30 ]} Approximately 95% of work hours today remain untouched by AI, ^{[ 31 ]} suggesting the productivity gains visible in current data represent only the earliest stage of a longer-term shift.

Figure 8
Construction Workers On Site at QTS US Data Centers ^{[ 29 ]}
(number of workers)

4. Inflation — Near-Term Pressures, but Cooler Over Time

The inflation landscape has evolved meaningfully since January, with dynamics that vary considerably across regions and sectors.

In the short term, headline inflation is marked by geopolitically driven energy costs and AI-driven supply chain volatility that have made the disinflation path bumpier and more challenging for global central banks. Our latest Blackstone Chief Procurement Officer (CPO) survey underscores this dynamic, showing input cost pressures accelerating across Europe and Asia given their higher energy import intensity. ^{[ 32 ]} Input costs in those regions are running roughly twice as hot as in the US (4.1% vs. 2.2%). ^{[ 33 ]} We are monitoring this data closely, though the recent memorandum of understanding (MOU) with Iran and the resulting decline in energy prices if sustained should provide relief.

Medium-term, the outlook is more constructive, especially in the US, where the impact of tariffs is fading, wages are stable despite strong job growth, and most notably rent disinflation has more room to run. Given shelter represents roughly 35% of US inflation, ^{[ 34 ]} continued rent disinflation should have a significant impact on the broader inflation trajectory.

Our proprietary methodology shows Blackstone-derived shelter CPI running at 1.5%, compared to over 3% in official figures. Incorporating real-time shelter data brings core CPI to approximately 2.0%, vs. 2.9% in official measures — suggesting the underlying inflation picture is better than the headlines imply. ^{[ 35 ]}

Looking further out, the nascent productivity boom carries additional powerful long-term disinflationary potential (see Figure 9).

Figure 9
Key Drivers of Mid-to-Long Term Disinflation Remain in Place, Despite Near-Term Pressure ^{[ 36 ]}

5. Capital Markets — Resilient Despite Volatility

Even against a volatile macro backdrop, dealmaking and issuance have held up well, buoyed by improving sentiment and sustained investor demand for scale and quality. After robust conditions in 2025, markets have stayed healthy into 2026 — reinforcing the momentum we highlighted in January. Our proprietary indicator of activity, Blackstone Capital Partners NDA signings, points to continued strength in the pipeline: NDA activity increased 48% year‑over‑year in May and is up 38% year‑to‑date, underscoring the broader engagement across the industry. ^{[ 37 ]}

Investors are clearly focused on physical assets and well-established, durable businesses — reflected both in the strong reception of recent Blackstone IPOs across these themes, including Legence, Medline, and Liftoff, and in continued strength across real estate capital markets as investors seek exposure to hard assets.

Pent-up demand remains significant. Our current pipeline is Blackstone's largest since 2021 and the second highest level in the last 20 years. We have priced three IPOs in the past month, plus our minority stake in SpaceX, with seven more in the pipeline, alongside minority stakes in two other large technology firms expected to go public this year (see Figure 10). ^{[ 38 ]}

Figure 10
Continued Healthy Capital Markets ^{[ 39 ]}