As we move toward 2025, the investment landscape is poised for transformative changes, particularly in the realms of infrastructure and cybersecurity. Jay Jacobs, head of thematic and active ETFs at BlackRock, emphasizes that the ongoing boom in artificial intelligence (AI) is a significant driving force in this evolution. The widespread adoption of AI technologies is still in its nascent stages, presenting unique opportunities for investors who are willing to adapt their strategies.
Jacobs argues that the increased reliance on AI will necessitate substantial investment in data management and security. The need for robust data centers is critical as AI companies expand their operations. According to Jacobs, as businesses continue to value data more highly, investments in cybersecurity will also escalate. “As your data becomes more precious, so does the need for safeguarding it,” he remarked, highlighting the intertwined relationship between AI advancements and cybersecurity investments.
Many analysts often overlook the tangible elements that support the digital world. Jacobs points out that technology, despite its seemingly ethereal nature, is grounded in physical infrastructures—such as power sources, data centers, and real estate. “You cannot forget the vital physical components that enable technology to function,” Jacobs said, underscoring the need for a holistic view of the investment landscape that includes these foundational elements.
Investors should also consider essential materials, like copper, which are integral to developing AI and related technologies. The demand for these resources is likely to surge as technological innovations continue to proliferate. Thus, recognizing the correlation between the digital and physical realms will be crucial for capitalizing on upcoming trends.
Given the broad impact of AI across various sectors, Jacobs advocates for a diversified investment approach. It is not just large tech firms that will benefit; numerous semiconductor manufacturers, data center operators, and innovative software companies will also see significant gains. This perspective pushes the boundaries of traditional tech investments, pointing to a more nuanced strategy that draws from wide-ranging sectors.
Two noteworthy funds highlighted by Jacobs are the BlackRock iShares Future AI & Tech ETF (ARTY) and the iShares AI Innovation and Tech Active ETF (BAI). These investment vehicles have performed well, with ARTY showing a promising 13% increase this year while BAI, which launched later, achieved the same percentage gain shortly after its debut. This performance demonstrates the momentum and interest in AI-focused investments.
As we approach 2025, profound shifts driven by AI technologies are imminent, calling for strategic investment in both infrastructure and cybersecurity. By expanding one’s investment horizons beyond just megacap tech names and embracing a wider spectrum of supporting sectors, investors stand to benefit significantly. Jacobs’ insights reveal an investment paradigm that recognizes the indispensable interplay between digital advancements and their physical counterparts, setting the stage for a thriving investment environment in an increasingly AI-centric world. The key for investors will be to remain vigilant and adaptable in this rapidly changing landscape.
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