As we approach 2025, the landscape of investment opportunities is shifting dramatically, particularly in the realms of infrastructure and cybersecurity. According to Jay Jacobs, the U.S. head of thematic and active ETFs at BlackRock, the surge in artificial intelligence (AI) adoption is poised to be a significant driver of growth in these sectors. Jacobs emphasizes that we are still in the nascent phases of AI integration into various industries, suggesting that the market has yet to fully realize the potential of AI technologies.
The crux of this anticipated growth lies in the fundamental changes AI brings, notably the necessity for advanced data management. Companies that are pioneering AI solutions will require robust data centers to support their operations, creating a ripple effect in sectors that provide the hardware and physical infrastructure necessary for these advancements. From power generation to real estate and semiconductor production, the implications of AI on infrastructure investment are profound.
Alongside the demands of infrastructure, the growing reliance on AI brings heightened concerns regarding data security. Jacobs points out that as data becomes increasingly valuable, the imperative for enhanced cybersecurity measures becomes paramount. “You want to spend more on cybersecurity as it gets more valuable,” Jacobs notes. His assertion underscores a critical investment opportunity—cybersecurity companies are positioned to experience rapid growth driven by the escalating need to protect digital assets.
The intertwining of AI and cybersecurity creates a compelling narrative for investors. With data breaches becoming more common and the stakes of digital security continuously rising, the financial market is predicted to allocate a larger share of investments toward companies specializing in cybersecurity solutions. This trend is underscored by an overall increase in revenue within the cybersecurity software community, further validating the importance of investing in this space.
Jacobs’ vision for investment strategies in the upcoming years extends beyond conventional mega-cap tech names. He encourages investors to broaden their outlook, considering other key players involved in the AI ecosystem. There are numerous semiconductor firms, data center operators, and software companies that stand to benefit from the unfolding AI narrative. “You really have to think about the physical infrastructure that underlies it,” Jacobs asserts, hinting at an often-overlooked aspect of technological advancement.
For investors eager to capitalize on this trend, BlackRock offers several ETFs that focus on AI and technology. Notable mentions include the iShares Future AI & Tech ETF and the iShares AI Innovation and Tech Active ETF, both of which have demonstrated strong performance since their inception. With a year-to-date increase of approximately 13%, these funds are reflective of the broader market sentiment around AI and its associated sectors.
As we look ahead to 2025, the integration of AI into various sectors presents a robust opportunity for investors willing to navigate the evolving landscape. The combined demands for infrastructure enhancements and cybersecurity measures, underpinned by the data revolution triggered by AI, make for a compelling investment narrative. Jacobs’ insights from BlackRock serve as a guiding beacon, encouraging a diversified approach that captures a multitude of players contributing to the AI ecosystem. In doing so, investors can position themselves optimally for a future where technology and infrastructure coalesce to create unprecedented growth opportunities.