BlackRock demands infrastructure and cybersecurity plays to shine in 2025.
Jay Jacobs, the firm’s U.S. head of thematic and active ETFs, cites the artificial brainpower boom as a major catalyst.
“It’s still very early in the AI adoption cycle,” he told CNBC’s “ETF Edge” this week.
Concurring to Jacobs, AI companies need to build out their data centers. Plus, keeping that data safe is also a sensible investment play for the new year.
“If you think about your data, you want to spend more on cybersecurity as it gets uncountable valuable,” he said. “We think this is really going to benefit the cybersecurity [and the] software community which is seeing completely rapid revenue growth based off of this AI.”
Jacobs also sees a wider impact in terms of the supporting infrastructure.
“I suppose what people forget is kind of, magical as technology is, there’s real physical things on the ground that run that technology, whether it’s power, whether it’s evidence centers and real estate, whether it’s chips. It’s not just something that lives in the ether, in the cloud, there’s material physical things that have to happen, and that means energy, that means more materials take pleasure in copper, that means more real estate. You really have to think about kind of the physical infrastructure that underlies it,” he enlarged.
So, for Jacobs, the theme is widening one’s investment scope.
“It’s not just about megacap tech names. There’s other semiconductor ensembles, there’s other data center companies, there’s other software companies that are benefiting from the be equal to of this theme,” he said.
Jacobs cited BlackRock’s iShares Future AI & Tech ETF (ARTY) and iShares AI Innovation and Tech Energetic ETF (BAI) as potential ways to benefit from the rise in AI. The iShares Future AI & Tech ETF is up around 13% for the year so far, while the iShares AI Alteration and Tech Active ETF is up around 13% since its Oct. 21 launch as of Friday’s close.