Here’s what BlackRock’s massive scale earns it and why it’s well-positioned to continue building on its growth.<\/p>\n
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Image source: Getty Images.<\/p>\n
BlackRock capitalizes on specialized investments to drive strong margin growth<\/p>\n
While BlackRock’s staggering $15.34 trillion AUM captures attention<\/a>, the company is seeing strong revenue growth and operational leverage that outpace its impressive asset growth. In the second quarter, AUM increased by 22%, while revenue increased by 31% to $7 billion. Meanwhile, adjusted operating income grew 42% to $2.92 billion, while adjusted operating margin increased from 43.3% to 45.9% — its highest in nearly five years.<\/p>\n This margin growth is more important because it shows the company isn’t focused purely on increasing AUM but on providing in-demand financial products that deliver strong margins. CEO Larry Fink said in the company’s release, “The scale and depth of our client relationships globally have never been greater.”<\/p>\n The company’s mix has shifted over time as it prioritizes specialized, high-margin vehicles where BlackRock’s expertise shines through. For example, private markets and alternative investments<\/a> account for only 3% of BlackRock’s total AUM but contribute 15% of its total base fees.<\/p>\n Broken down by investment styles, BlackRock’s active investment strategies, which include equities, fixed income, and alternatives, represent 24% of AUM but generate 42% of its total fees. Over the past year, its institutional active assets have seen inflows of $106 billion, while institutional index assets, which earn significantly lower fees, have seen outflows of $104 billion.<\/p>\n BlackRock’s technology platform provides an alternative source of revenue<\/p>\n In addition, technology is a stream of non-market-related revenue that helps serve “sticky” clients and provides recurring revenue. Unlike asset-based fees, which can decline during market downturns, technology revenue offers greater stability.<\/p>\n The company has taken steps in recent years, including integrating Preqin and eFront<\/a>, allowing its Aladdin technology to incorporate private market data directly into its risk management ecosystem. Subscription revenue was $566 million, up 13% year over year, while annual contract values, which provide insight into future growth, grew by 15%.<\/p>\n BlackRock’s massive scale and stellar margins make it a financial stock to own long-term<\/p>\n BlackRock has done an excellent job building its investment platform, and the recent quarter shows it’s effectively monetizing its scale. The company has integrated high-margin alternative and active investments along with technology offerings into its platform, diversifying earnings and delivering stellar profit margins.<\/p>\n Following its strong quarter, BlackRock updated its share buyback target to $2 billion. This, coupled with its 2% dividend, shows a company that steadily rewards shareholders over time. For investors seeking exposure to the financial sector<\/a>, BlackRock is a solid stock to buy today.<\/p>\n Should you buy stock in BlackRock right now?<\/p>\n Before you buy stock in BlackRock, consider this:<\/p>\n The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks<\/a> for investors to buy now\u2026 and BlackRock wasn\u2019t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.<\/p>\n Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you\u2019d have $400,209!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you\u2019d have $1,375,393!*<\/p>\n Now, it\u2019s worth noting Stock Advisor\u2019s total average return is 964% \u2014 a market-crushing outperformance compared to 215% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.<\/p>\n See the 10 stocks \u00bb<\/a><\/p>\n *Stock Advisor returns as of August 14, 2026. <\/p>\n Courtney Carlsen<\/a> has positions in BlackRock. The Motley Fool has positions in and recommends BlackRock. The Motley Fool has a disclosure policy<\/a>.<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":"Key Points BlackRock is a dominant player in asset management with $15 trillion in assets under management. 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