As we steer into 2025, the investment landscape is poised to undergo significant transformations, largely driven by the burgeoning field of artificial intelligence (AI). Jay Jacobs, who helms BlackRock’s thematic and active ETFs division in the U.S., identifies AI as a primary force propelling future growth opportunities. With the AI adoption curve still in its infancy, there exists a realm of compelling investment avenues waiting to be explored. The need for robust data management and security will not only sustain current demands; it is also set to escalate, positioning cybersecurity as a lucrative sector for savvy investors.
The development of physical infrastructure to support AI technologies is essential. Jacobs stresses the point that while AI may often evoke images of cloud computing and ethereal data, there exists an underlying reality of physical demands—data centers, real estate for those operations, and energy needs. As companies adapt to the mounting data influx, there will be a heightened need for hardware, including chips and additional materials like copper, which are critical for infrastructure development. Investors are urged to go beyond investing in well-known megacap tech firms and explore broader segments within the tech ecosystem, which includes semiconductor manufacturers and data center operators.
In an increasingly digital world, data security has emerged as a paramount concern, warranting increased financial dedication. With the exponential growth of AI, data not only serves a pivotal role but also becomes significantly more valuable, propelling investments in cybersecurity. Jacobs emphasizes this trend, predicting that organizations will prioritize cybersecurity protocols to safeguard their assets and customer information. This shift not only benefits dedicated cybersecurity firms but also enhances revenue growth for wider software communities riding the AI wave.
For investors seeking to capitalize on these trends, Jacobs recommends diversifying their investment portfolios beyond typical tech giants. BlackRock’s iShares Future AI & Tech ETF (ARTY) and iShares AI Innovation and Tech Active ETF (BAI) represent strategic avenues for those interested in the elevated AI narrative. Both funds are showing promising performance; ARTY has experienced a 13% rise this year, while BAI, freshly launched, has already mirrored this growth trajectory since its inception.
The 2025 horizon is illuminated with opportunities for investments driven by advancements in artificial intelligence, physical infrastructure development, and cybersecurity. Investors are encouraged to embrace a broader perspective by considering less conventional sectors while acknowledging the synergy between emerging technologies and established physical demands. By following these trends and adopting diverse investment strategies, the potential for significant returns remains vast in this changing landscape. The commitment to supporting both the digital and physical needs of this technological revolution may very well define the next chapter in investment success.