Who owns the biggest companies in the country? Millions of shareholders. However, a handful of giant institutional investors own the largest stakes.
BlackRock (BLK +0.13%) ranks near the top of the list of those huge institutional investors. This company owns a big chunk of the so-called "Magnificent Seven" -- and Wall Street thinks its stock is a screaming buy.
NYSE: BLK
Key Data Points
Seven for seven
The Magnificent Seven consists of the following stocks (listed in descending order based on market cap):
- Apple (AAPL 2.15%)
- Nvidia (NVDA 1.58%)
- Microsoft (MSFT 1.57%)
- Amazon (AMZN 0.89%)
- Alphabet (GOOG 0.58%) (GOOGL 0.42%)
- Meta Platforms (META 3.77%)
- Tesla (TSLA 0.88%)
Vanguard Group, which isn't publicly traded, is the largest shareholder of each of these stocks. But BlackRock is close behind. It's the second-largest shareholder of all seven of the Magnificent Seven.
BlackRock owns around 1.09 billion shares of Apple. This represents 7.28% of the iPhone maker's outstanding shares with a current value of over $253 billion.
The financial services company's stake in Nvidia is almost as large. BlackRock's 1.85 billion shares of Nvidia give it 7.56% ownership of the GPU maker and are valued at over $237 billion.
Unsurprisingly, its smallest position is in the smallest member of the Magnificent Seven -- Tesla. BlackRock owns 194.7 million shares of the electric vehicle maker representing 6.05% of its outstanding shares. This stake in Tesla is worth roughly $71.7 billion.
It makes sense that BlackRock has massive positions in all seven stocks. Many of the company's mutual funds, ETFs, and closed-end funds (CEFs) invest in the Magnificent Seven.
A Wall Street favorite
Most of the Magnificent Seven stocks have been Wall Street darlings in recent years. BlackRock is a Wall Street favorite, too.
Of the 18 analysts surveyed by financial markets data and infrastructure provider LSEG in February who cover BlackRock, five rated the stock as a "strong buy." Another nine rated BlackRock as a "buy." The remaining four analysts recommended holding the financial stock.
The average analysts' 12-month price target for BlackRock reflects an upside potential of 14%. The most bullish analyst surveyed by LSEG thinks the stock can soar 25% over the next 12 months.
What does Wall Street like about BlackRock? The company's pending acquisition of HPS Investment Partners is viewed as a positive by some analysts. BlackRock announced in December 2024 that it plans to buy HPS Investment Partners for around $12 billion. HPS is a top global credit investment manager with $148 billion in client assets. The all-stock deal is expected to boost BlackRock's private markets fee-paying assets under management by 40%.
Analysts' overall optimism about BlackRock remains steady even after Vanguard announced lower fees for many of its funds. BlackRock hasn't indicated what changes it might make in response to its main rival's fee reductions.
Should you buy BlackRock stock?
I'm not sure if BlackRock's share price will jump 14% over the next 12 months as the consensus price target reflects. However, I agree with Wall Street's positive take on BlackRock.
The company continues to deliver strong growth with revenue and adjusted diluted earnings per share jumping 23% year over year in the fourth quarter of 2024. The HPS acquisition should fuel even more growth.
President Trump has indicated his willingness to reduce regulations. This could provide a tailwind for much of the financial services sector, including BlackRock.
Finally, BlackRock isn't priced at too high of a premium. Its shares trade at 21.5 times forward earnings. Although that's not cheap, it's less than the S&P 500's forward earnings multiple of 22.4.
I doubt BlackRock will deliver gains over the next decade as spectacular as some of the Magnificent Seven stocks it owns. However, it nonetheless should be a solid pick for long-term investors.
