BlackRock shares fell Tuesday after the world’s largest asset manager reported mixed second-quarter earnings — presenting a buying opportunity for patient investors. Revenue in the second quarter rose 12.9% year over year to $5.42 billion, but missed the $5.46 billion estimate, according to LSEG. Adjusted earnings per share (EPS) of $12.05 topped expectations of $10.82, LSEG data showed. Assets under management (AUM) totaled $12.53 trillion at the end of the quarter, above the consensus estimate of $12.15 trillion, according to FactSet. BlackRock stock came into the print at all-time highs, so we’re not all that surprised that investors are doing some profit taking. However, the company is set up for a strong back half of 2025, making the sell-off a great opportunity for members to step in and do some buying. In an interview with CNBC after the results, CEO Larry Fink said stock sellers are overlooking the strong organic growth in fee revenue generated by rising asset prices. He also emphasized that the second-quarter results do not include the positive impact that recent acquisition HPS will have going forward. BlackRock completed its $17 billion deal on July 1, part of its efforts to build up its share of the fast-growth private credit market. BLK YTD mountain BlackRock year to date return Bottom line Despite the sales miss, there was a lot to like under the hood. Highlights include organic base fee growth of 6%, the fourth consecutive quarter of 5% or greater growth and a better-than-expected adjusted operating margin of 43.3%, despite a slight contraction versus the year ago period. On the post-earnings call, CFO Martin Small said that currency fluctuations and rising asset prices means BlackRock entered the third (current) quarter with an estimated base fee run rate roughly 5% higher than the prior quarter. In addition, total assets under management ended the quarter up 18% year over year to a new all-time high of $12.5 trillion — even as net inflows came up short, thanks partly to one large institutional redemption of $52 billion from low-fee index funds (resulting in $48 billion of net outflows). Notably, iShares ETF inflows in the first half reached a new all-time record for the company. Technology services revenue and subscription revenue increased 26%, with Preqin contributing approximately $60 million to second quarter revenue. BlackRock’s $3.2 billion purchase of alternative assets data provider Preqin — the smallest of its three private-market deals announced in 2024 — “could be as impactful as any of them,” Fink said. BlackRock is working with regulators to provide more transparency and liquidity in private markets, which basically refers to assets that don’t trade on public exchanges, including loans to companies, known as private credit, and investments into infrastructure projects such as data centers and ports. Annual contract value (ACV) increased 32% year over year, including Preqin, and 16% organically. Despite all the positives heading into the second half of the year, shares of BlackRock are down more than 5%. We believe the company’s recent acquisitions will supercharge sales and earnings, and allow the company to expand its client base and cross-sell its newer products to existing customers. As management integrates these acquisitions, including its most recent buy of ElmTree Funds, we expect the overall adjusted operating margin to rebound. As a result, we reiterate our 1 rating and are increasing our price target to $1,200 from $1,050. No need to rush in today, but we’d look to potentially buy shares on Wednesday. BlackRock (BLK) Why we own it: BlackRock is a premier asset gatherer perhaps best known for its family of iShares exchange-traded funds. However, the firm is wisely pushing into alternative strategies, such as infrastructure and private credit, with a series of acquisitions to fuel its next leg of growth. Led by venerable CEO Larry Fink, BlackRock has a track record of sustained asset and technology services growth while remaining disciplined on expenses to boost profitability. Initiation date: Oct. 16, 2024 Most recent buy: April 22, 2025 Competitors: State Street , Vanguard, Apollo Global Management and Ares Management Commentary Acquisitions were a major focus on the conference call, and it’s clear that bringing HPS Investment Partners and Global Infrastructure Partners together and integrating them into the BlackRock ecosystem is leading to new opportunities for growth. In fact, since the close of the second quarter, BlackRock managed to complete a $25.2 billion raise with its new GIP Fund V, above management’s $25 billion target. As CFO Small noted on the call, this represents “the largest private markets fundraise in the history of BlackRock and GIP.” Small said the acquisition of HPS marks “a major milestone as we evolve towards our ambitions of 30% revenue contribution from private markets and technology.” The GIP acquisition has also opened up infrastructure conversations with hyperscale customers, which we all know are investing massive sums of money to build out data centers and the energy pipelines needed to power them. As management put it on the call, these acquisitions, along with Preqin, put BlackRock “in a position that we could have a broader, deeper conversations with our clients.” Not only have they opened up new pathways for growth, they also open the door for more cross-selling opportunities. iShares also saw a benefit from the launch of BlackRock’s bitcoin ETF (IBIT). CEO Larry Fink said that nearly a third of the investors came to BlackRock for IBIT have gone on to purchase other iShares products. (Jim Cramer’s Charitable Trust is long BLK. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. 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