Black Rock Expect infrastructure and cybersecurity to shine in 2025.
Jay Jacobs, the firm's U.S. head of thematic and active ETFs, cites the AI 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 build their own data centers. In addition, keeping this data secure is also a sound investment for the new year.
“If you think about your data, you want to spend more on cybersecurity because it becomes more valuable,” he said. “We think this will really benefit the software (and cybersecurity) community that is seeing very rapid revenue growth based on this AI.”
Jacobs also sees a broader impact in terms of supporting infrastructure.
“I think what people forget is that it's kind of magical, like technology, there are real physical things on the ground running that technology, whether it's energy, whether it's data centers or real estate, whether it's chips. It's not just something that lives in the ether, in the cloud, there 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 some kind of physical infrastructure behind it,” he added.
So, for Jacobs, the issue is broadening the scope of investing.
“It's not just about the big tech names,” he said. “There are other semiconductor companies, there are other data center companies, there are other software companies that benefit from the emergence of this topic.”
Jacobs cited BlackRock's iShares Future AI & Tech ETF (ARTY) and iShares AI Innovation and Tech Active ETF (BAI) as potential ways to capitalize on the rise of AI. The iShares Future AI & Tech ETF is up about 13% for the year so far, while the iShares AI Innovation and Tech Active ETF is up about 13% from its launch on October 21 through Friday's close.
