BlackRock reported second-quarter earnings on July 15 that topped Wall Street expectations across the board, with assets under management hitting $15.34 trillion against a $15.19 trillion consensus. Revenue came in at $7.08 billion, net inflows at $191.7 billion, and adjusted EPS at $13.91 — all above analyst estimates. Yet the stock fell between July 15 and July 24, puzzling some market watchers.
Institutional inflows lag as ETFs drive growth
The asset manager’s net inflows were overwhelmingly from exchange-traded funds and retail investors. Institutional net inflows totaled just $2.34 billion in the quarter, a sign that big-money clients remain cautious. That imbalance may explain why the stock didn’t rally on the earnings beat.
Analyst upgrades and a downgrade
JPMorgan upgraded BlackRock from Neutral to Overweight on July 16 and raised its price target 17% to $1,364. Morgan Stanley initially cut its target to $1,383 on July 14, then reversed course and raised it to $1,488 on July 16 — the highest on Wall Street. BMO Capital Markets reiterated a Buy rating at $1,300 on July 17, and KBW initiated coverage at $1,300 on July 16. Despite the upgrades, the stock continued to slide.
Options market shows mixed signals
Options trading data reveals a split between short-term and longer-term sentiment. The put-call ratio for overnight positions — a gauge of longer-term bets — slipped from 1.00 on July 15 to 0.98 on July 24, indicating a slight bullish tilt among investors holding positions overnight. But the short-term put-call ratio, which tracks daily trades, rose from 0.70 to 0.83, showing increased bearish activity in the near term. Meanwhile, the Chaikin Money Flow (CMF) improved from -0.28 on July 15 to -0.13 on July 24, but remained negative, suggesting institutional sellers are still in control, albeit with less force.
Tokenized collateral pilot and AI infrastructure debt
BlackRock joined a DTCC pilot on tokenized collateral alongside JPMorgan and Goldman Sachs. The pilot covers Russell 1000 shares and Treasuries, with a formal launch expected in October. Separately, BlackRock is leading a debt sale of at least $12 billion for a Meta-backed data center campus in El Paso, financing AI infrastructure. The moves underscore BlackRock’s push into digital assets and large-scale tech infrastructure.
The stock’s decline despite strong earnings and analyst upgrades leaves a question: are investors worried about the reliance on retail flows and the slow institutional pickup, or is the broader market rotation away from asset managers weighing on the shares? The next few weeks of trading and the October tokenization launch may provide answers.
