BlackRock expects infrastructure and cybersecurity to shine in 2025.
Jay Jacobs, the firm's U.S. head of thematic and active ETFs, cites the artificial intelligence boom 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 need to expand their data centers. In addition, the security of this data is also a wise investment for the new year.
“When you think about your data, the more valuable it becomes, the more you want to spend on cybersecurity,” he said. “We think this will really benefit cybersecurity [and the] Software community that is experiencing very rapid revenue growth based on this AI.”
Jacobs also sees larger impacts in terms of supporting infrastructure.
“I think what people forget is somehow magical, as magical as technology is, there are real physical things on Earth that control that technology, whether it's electricity, whether it's data centers and real estate, whether it's chips. It's not just something that lives in it.” “In the ether, in the cloud, real physical things have to happen, and that means energy, that means more materials like copper, that means more real estate. You really have to think about the physical infrastructure that underlies it,” he added.
For Jacobs, it's about expanding the scope for investment.
“It’s not just about big tech companies. There are other semiconductor companies, other data center companies and other software companies that are benefiting from the rise of this theme,” he said.
Jacobs cited BlackRock's iShares Future AI & Tech ETF (ARTY) and iShares AI Innovation and Tech Active ETF (BAI) as potential ways to benefit from the rise of AI. The iShares Future AI & Tech ETF is up about 13% year to date, while the iShares AI Innovation and Tech Active ETF is up about 13% from its launch on Oct. 21 through Friday's close.