Jim Cramer’s Contrarian Call on BlackRock: A Long-Term Gamble Worth Taking?

Jim Cramer’s recent endorsement of BlackRock (BLK) carries its trademark blend of boldness and nuance. In a Mad Money Lightning Round segment, the CNBC host declared: “I think it should be bought. That said, I’ve been wrong… Long term, I think it’s going to be a great position.” The admission of past missteps underscores Cramer’s cautious optimism—a stance that reflects both BlackRock’s current struggles and its enduring role as a pillar of the financial ecosystem.

The Case for BlackRock: Why Cramer Sees Long-Term Value

Cramer’s call to “buy” BlackRock isn’t rooted in short-term optimism. The asset manager has faced headwinds in 2025, including market volatility tied to U.S.-China trade tensions and a broader selloff in financial stocks. BlackRock’s stock price has lagged behind peers like Vanguard, and its year-to-date performance has been lackluster. Yet Cramer’s focus is on the firm’s structural advantages:
- Scale and diversification: As the world’s largest asset manager with $9.5 trillion under management, BlackRock dominates equities, fixed income, and alternatives.
- Strategic pivots: CEO Larry Fink’s push into private markets and infrastructure—evident in BlackRock’s acquisitions of firms like Global Infrastructure Partners (GIP)—positions it to capitalize on the $300 trillion private credit opportunity.
- AI-driven innovation: BlackRock’s $2 billion investment in artificial intelligence, highlighted in its 2025 strategy letter, aims to automate risk analysis and enhance portfolio optimization.

Cramer’s Contrarian Logic: Why Now?

Cramer’s timing is curious. BlackRock’s stock has underperformed as investors rotate into growth sectors and question the value of traditional asset managers. Yet two factors make his call compelling:
1. Hedge fund validation: The firm has 53 hedge funds among its top holders as of Q4 2024—a number that has grown by 15% in the past year. Institutional conviction often precedes rebounds.
2. Valuation reset: With the S&P 500’s forward P/E dropping to 20.5 (down from 25 in early 2025), BlackRock’s current P/E of 18.2 looks cheap relative to its five-year average of 22.

Cramer also cites BlackRock’s role in navigating macro risks. The firm’s “pro-risk” stance in its 2025 outlook—overweighting U.S. equities and underweighting Treasuries—aligns with Cramer’s belief that markets are pricing in worst-case scenarios. “This is a P/E ratio lowering event, not a market collapse,” he argued, urging investors to avoid panic-selling.

The Risks: Why Cramer Admits to Being ‘Down on It’

The caution in Cramer’s remarks isn’t misplaced. BlackRock faces hurdles that could prolong its slump:
- Trade policy uncertainty: U.S.-China tariff disputes threaten BlackRock’s infrastructure investments, which rely on global supply chains.
- Fee compression: Passive investing continues to erode margins, with ETFs now commanding 40% of U.S. equity assets under management.
- Regulatory scrutiny: The SEC’s ongoing probe into ESG fund marketing could force costly adjustments to BlackRock’s $300 billion ESG portfolio.

Conclusion: A Buy for Patient Investors

Cramer’s advice to “buy the dip” in BlackRock hinges on a bet that its long-term moat—scale, innovation, and diversification—will outweigh near-term headwinds. With 53 hedge funds backing the stock and a P/E well below its historical average, the valuation case is solid. The firm’s push into private markets and AI, coupled with its $10 billion share buyback program, adds further support.

However, investors must accept the risks. BlackRock’s 2025 earnings growth forecasts have been slashed to 9%—down from 14% earlier in the year—reflecting macroeconomic pressures. Yet if Cramer’s “long-term” horizon holds, the payoff could be substantial. As he noted, “This is a position you hold through the noise.” For those willing to look past the next quarter, BlackRock remains a buy.

In a market fixated on the next earnings report, Cramer’s contrarian call reminds us that some bets are about more than quarterly results—they’re about owning the future of finance itself.