As we look toward the investment landscape of 2025, industry experts are predicting significant growth in sectors tied to infrastructure and cybersecurity. Jay Jacobs, BlackRock’s U.S. head of thematic and active ETFs, draws attention to the pivotal role of artificial intelligence (AI) as a foundational force driving these trends. With the acceleration of AI technologies, the demand for robust data infrastructure and enhanced cybersecurity measures is expected to surge, making these areas prime targets for investors.
The current phase of AI development is still in its early stages, according to Jacobs. This burgeoning technology requires substantial physical resources, particularly data centers to support the increasing volume of information generated by AI systems. As data becomes more integral to businesses, the necessity for comprehensive cybersecurity solutions becomes paramount. Jacobs emphasizes that as the value of data escalates, companies will inevitably allocate more resources to safeguarding this asset, thus benefiting the cybersecurity sector immensely.
An often-overlooked aspect of technological advancement is the underlying physical infrastructure that supports it. Jacobs highlights that technology, while often conceptualized as existing in the “cloud,” relies heavily on tangible elements such as data centers, energy supplies, and semiconductor materials. The demand for these physical infrastructures—ranging from copper wiring to the real estate housing data centers—will be crucial in meeting the needs of a digitally driven economy. Investors should consider the broader implications of technology’s reliance on these physical components when identifying lucrative opportunities.
The investment strategy proposed by Jacobs extends beyond traditional large-cap technology stocks. He encourages investors to diversify their portfolios by considering a range of companies involved in the AI ecosystem. This includes not only the megacap tech giants but also smaller semiconductor manufacturers, data center operators, and software firms that stand to gain from the AI revolution. By broadening their focus, investors can tap into a variety of growth prospects created by this technological shift.
For investors keen on capitalizing on these emerging trends, Jacobs points to several BlackRock ETFs designed to align with AI growth trajectories. The iShares Future AI & Tech ETF (ARTY) and the iShares AI Innovation and Tech Active ETF (BAI) are highlighted as promising vehicles for investment. So far, ARTY has shown impressive returns, up approximately 13% this year, while BAI has garnered similar growth since its launch in October. These ETFs not only represent the potential returns associated with AI advancements but also signify a strategic investment approach focused on the essential infrastructures that underpin technological progress.
The horizon for investment in infrastructure and cybersecurity looks exceptionally promising as the adoption of AI technologies continues to accelerate. Investors that recognize and adapt to these evolving dynamics will likely position themselves advantageously in the years ahead.