As we approach 2025, the financial landscape is rapidly evolving, with BlackRock identifying infrastructure and cybersecurity as key areas likely to excel. The company, known for its strategic investment insights, emphasizes the significance of the ongoing artificial intelligence (AI) revolution. Jay Jacobs, head of thematic and active ETFs at BlackRock, made a compelling case on CNBC’s “ETF Edge,” highlighting that we are still in the nascent stages of AI adoption. This insight opens up a plethora of investment opportunities, particularly in sectors that support the underlying infrastructure vital for AI technologies.
The continuing growth in AI means that companies are increasingly focusing on establishing robust data centers to manage vast amounts of data. As data becomes more valuable, the need for cybersecurity grows. Jacobs highlights a fundamental truth about the modern economy: as we collect, store, and analyze more data, the importance of protecting that information from cyber threats cannot be overstated. This creates a fertile ground for investments in cybersecurity firms and related software businesses that are experiencing rapid revenue increases as they adapt to the rising demand for data protection solutions.
Jacobs emphasizes the often-overlooked aspect of technological growth: the physical infrastructure that underpins it. Many investors may become so enamored with the shiny allure of tech breakthroughs that they forget the necessity of tangible assets supporting these innovations. Power sources, data centers, and the necessary real estate for deploying technological solutions all play vital roles in facilitating the promise of AI. Furthermore, the demand for raw materials like copper is likely to surge, as these physical components become even more critical in an AI-dependent future.
The recognition of these physical needs calls for a broader investment strategy. This perspective challenges the conventional focus on megacap tech stocks, urging investors to explore opportunities within the semiconductor sector, data center operations, and even lesser-known software companies that stand to gain from this technological evolution. This holistic approach is central to Jacobs’s investment philosophy, encouraging a diversified portfolio that captures the emerging themes in tech.
To facilitate engagement with these rapidly evolving sectors, BlackRock offers investment vehicles designed with foresight in mind. Notably, the iShares Future AI & Tech ETF (ARTY) and the iShares AI Innovation and Tech Active ETF (BAI) have emerged as prime choices for investors looking to capitalize on the rise of AI. These ETFs track companies that are either notable leaders in the AI space or those providing essential infrastructure and cybersecurity solutions.
The performance of these ETFs underscores their potential. As of recent reports, both funds have shown promising growth, reflecting a keen interest from investors in tapping into the AI wave. This suggests a broader trend where market players are not just taking a wait-and-see approach but are actively positioning themselves in anticipation of significant technological advancements.
BlackRock’s insights provide a roadmap for investors in 2025. By focusing on both infrastructure and cybersecurity in the context of an AI-driven world, there’s a unique opportunity to unlock value in diverse sectors. As technology continues to advance, investment strategies must also adapt to reflect these changes, ensuring that portfolios are well-equipped to thrive in an increasingly digital future.