As we move toward 2025, investors are eyeing sectors that could potentially deliver robust returns. BlackRock, a titan in financial management, points to infrastructure and cybersecurity as two vital areas poised to capitalize on the technological revolution spurred by artificial intelligence (AI). Jay Jacobs, the company’s U.S. head of thematic and active exchange-traded funds (ETFs), emphasizes that we are merely at the inception of the AI adoption wave, suggesting a plethora of investment opportunities yet to be realized.
The enthusiasm surrounding AI is not without reason. Jacobs notes that the burgeoning demand for AI capabilities necessitates substantial physical resources, particularly data centers. These data centers are critical for processing the massive volumes of data generated by AI applications. As companies strive to enhance their AI offerings, the resources that support these technological advancements—such as energy, raw materials like copper, and real estate—are set to experience heightened demand. The underlying physicality of technology, often overshadowed by the allure of intangible digital solutions, remains an important aspect that investors must not overlook.
With the increasing value of data comes an escalating need for robust cybersecurity strategies. Jacobs underscores that as businesses collect and store more sensitive information, the imperative to safeguard this data intensifies. Cybersecurity is evolving from a mere operational necessity into a strategic investment opportunity. Jacobs predicts that companies within the cybersecurity sector, alongside software firms catering to this demand, will witness significant revenue growth. This sector’s growth is not just a response to immediate challenges; it potentially represents a long-term trajectory driven by the transformation of how we conceive and handle data in the AI landscape.
Jacobs advocates for a broader investment strategy that encompasses more than the traditional megacap technology firms. He brings attention to the rising stars in the semiconductor and data center space, as well as lesser-known software companies that are all integral to supporting AI infrastructures. This diversification is crucial; as the AI ecosystem expands, so too does the breadth of companies benefiting from this transformation. Jacobs points investors to specific ETFs, such as BlackRock’s iShares Future AI & Tech ETF (ARTY) and iShares AI Innovation and Tech Active ETF (BAI), which reflect this evolving investment thesis.
As we stand on the brink of 2025, the implications of AI on investment strategies are profound. The intertwining of infrastructure and cybersecurity within the technology sector presents unique and valuable opportunities. Jacobs’ insights serve as a clarion call for investors to recalibrate their perspectives and explore the broader investment landscape that goes beyond conventional tech giants. By acknowledging the foundational elements that sustain AI advancements and the imperative of data protection, investors can position themselves to navigate the complexities and capitalize on the tremendous possibilities that lie ahead. In short, the future looks promising for those willing to adapt and broaden their investment horizons.