As we approach 2025, investment trends are shifting toward crucial sectors that stand to benefit significantly from the ongoing artificial intelligence (AI) revolution. Recently, Jay Jacobs, the U.S. lead for thematic and active ETFs at BlackRock, underscored the burgeoning opportunities within infrastructure and cybersecurity as key players in this impending growth. The AI boom, characterized by an acceleration in data processing and machine learning applications, is laying the groundwork for a substantial transformation across various industries. Jacobs emphasizes that we are only at the dawn of AI adoption, indicating that the real growth potential is just beginning to unfold.
One of the most compelling aspects of AI development is the pressing need for robust data infrastructure. Companies involved in AI are rapidly expanding their data centers to accommodate explosive growth in data usage and processing requirements. This surge necessitates enhanced cybersecurity measures to protect sensitive information. Jacobs points out, “As your data becomes more valuable, investing in cybersecurity becomes not just important but imperative.” This statement encapsulates a fundamental shift in how businesses approach data management and security, reinforcing the notion that anticipated revenue growth in cybersecurity is directly tied to AI advancements.
Despite the digital nature of modern technology, Jacobs stresses a vital point: the underlying physical infrastructure that supports these innovations is crucial. “Whether it’s power supply, data centers, real estate, or semiconductor components, technology is grounded in real-world resources,” he notes. This reminder serves as a caution against overlooking the tangible elements that facilitate the cloud and AI to function. Demand for commodities like copper and physical facilities necessary for data storage and processing will surge as technology evolves. Hence, investors are urged to broaden their scope beyond conventional tech giants and consider the entire ecosystem that supports this digital evolution.
In light of these trends, Jacobs proposes that investors should diversify their portfolios to capture the full benefits of AI’s growth. “It’s not just about megacap tech names,” he explains. “There are abundant opportunities within semiconductor firms, data center operators, and various software developers that are experiencing rapid expansion as a result of AI’s rise.” To navigate these waters, BlackRock offers specific investment vehicles, such as the iShares Future AI & Tech ETF (ARTY) and the iShares AI Innovation and Tech Active ETF (BAI).
Both the iShares Future AI & Tech ETF and the iShares AI Innovation and Tech Active ETF have demonstrated robust performance in the current financial environment, reflecting a growing confidence among investors in these sectors. As the world evolves and integrates more AI technologies, sectors like infrastructure and cybersecurity are expected to flourish in underlining their foundational support. For investors, the message is clear: stay ahead of the curve by embracing a holistic approach that considers not just the digital aspects of technology but the indispensable physical infrastructure that underpins it. The landscape of investment is shifting, and those who adapt will likely reap substantial rewards in the coming years.