As we gaze into the horizon of investment landscapes for the year 2025, a profound shift is anticipated, particularly within the realms of infrastructure and cybersecurity. As noted by BlackRock’s Jay Jacobs, the U.S. head of thematic and active ETFs, the surge associated with artificial intelligence (AI) is catalyzing substantial transformations in these sectors. Jacobs emphasizes that we are only at the nascent stages of AI adoption, suggesting a potential for considerable growth as more companies integrate AI into their operations and services.
The advent of AI technologies is expected to engender a need for robust infrastructure, primarily due to the increased demand for data processing. This is particularly evident in the necessity for expansive data centers capable of housing and managing vast swathes of data. Jacobs highlights the criticality of cybersecurity in this context, positing that as data becomes more valuable, the imperative to safeguard it intensifies. This dual focus on infrastructure and cybersecurity complements one another and opens up lucrative investment opportunities.
One of Jacobs’ key insights revolves around the misconception that technology exists solely in a virtual realm. He underscores the tangible components essential to technological advancement, such as energy supplies, data centers, real estate, and semiconductor manufacturing. For investors, understanding this nuance is vital; the continued rise of AI technologies necessitates a reevaluation of where value lies. Investing in the physical infrastructure that supports these tech innovations could yield substantial returns as demand escalates.
In light of these revelations, Jacobs advocates for an expansive investment approach that goes beyond the dominant mega-cap technology companies. He identifies a plethora of opportunities among smaller semiconductor firms, specialized data center operators, and niche software companies that stand to gain from the AI revolution. This strategy encourages investors to diversify their portfolios and explore sectors that concurrently benefit from technological growth.
For those interested in capitalizing on this wave of change, Jacobs pointed to BlackRock’s iShares Future AI & Tech ETF (ARTY) and the iShares AI Innovation and Tech Active ETF (BAI) as promising vehicles. Both funds have demonstrated impressive performance metrics, with ARTY reflecting a 13% gain for the year prior to October 21 and BAI showing similar growth since its recent launch. These investment options provide a pathway for investors to effectively align their portfolios with the anticipated trajectory of AI and its associated infrastructure.
The expectations for 2025 are marked by a fusion of technological advancement and a pressing need for foundational infrastructure. As AI continues to penetrate various industries, the concurrent rise in demand for cybersecurity and tangible resources becomes evident. Investors must strike a balance between acknowledging high-profile tech players and discovering emerging opportunities throughout the supporting sectors. The journey into 2025 promises both challenges and opportunities, contingent upon our ability to adapt to a rapidly evolving digital landscape.