BlackRock expects infrastructure and cybersecurity activities to shine in 2025.
Jay Jacobs, the US head of the firm’s thematic and active ETFs, cites the rise of artificial intelligence as a key catalyst.
“It’s still very early in the AI adoption cycle,” he told CNBC’s “ETF Edge” this week.
According to Jacobs, AI companies must expand their data centers. Plus, keeping that data safe is also a good investment for the new year.
“When you think about your data, you want to spend more on cybersecurity as it becomes more valuable,” he said. “We think this will really benefit cybersecurity [and the] software community that is seeing very rapid revenue growth based on this AI.”
Jacobs also sees a broader impact in the area of supporting infrastructure.
“I think what people forget is a bit of magic, as magical as the technology is. There are real physical things on the ground that drive the technology, whether it’s power, whether it’s data centers and real estate, whether it’s chips are. It’s not just something that lives in the ether, in the cloud, there are real physical things that have to happen, and that means energy, that means more materials like copper, that means more real estate. You have to really think about the physical infrastructure underlying it, he added.
For Jacobs, the theme is broadening the investment space.
“It’s not just about mega-cap tech names. There are other semiconductor companies, there are other data center companies, there are other software companies that are benefiting from the rise of this theme,” he said.
Jacobs mentioned BlackRock’s iShares Future AI & Tech ETF (ARTY) and iShares AI Innovation and Tech Active ETF (BAI) as possible ways to benefit from the rise of AI. The iShares Future AI & Tech ETF is up about 13% so far this year, while the iShares AI Innovation and Tech Active ETF is up about 13% since its launch on October 21 as of Friday’s close.