As we look towards 2025, the investment landscape is poised for transformation, driven largely by advancements in artificial intelligence (AI) and the essential surrounding infrastructures. Jay Jacobs, a prominent figure in thematic investment at BlackRock, emphasizes the significance of this duality—AI is not just a digital phenomenon; it is intricately linked to the physical world and infrastructure that supports its growth. According to Jacobs, the early stages of AI adoption represent a critical turning point for investors seeking to capitalize on the opportunities that lie ahead.
One of the lesser-discussed aspects of the AI revolution is its dependency on robust physical infrastructure. Jacobs highlights that while AI technologies have the potential to be transformative, the tangible assets required to facilitate these innovations—such as data centers, energy sources, and semiconductor manufacturing—must not be overlooked. This interconnectedness serves as a reminder that technology isn’t exclusively ethereal; it requires real-world materials and energy. As organizations ramp up AI implementation, the demand for these foundational resources is expected to surge, leading to greater investment opportunities across various sectors.
Alongside infrastructure needs, investment in cybersecurity emerges as a vital priority. Jacobs notes that as the value of data escalates intricately tied to AI applications, the imperative to protect this data intensifies. Enterprises will increasingly allocate resources to fortifying their cybersecurity measures, translating to tangible growth for companies specializing in cybersecurity solutions. This changing landscape presents significant avenues for investment, particularly for firms that offer innovative security technologies adapted for the AI era.
Jacobs advises investors to broaden their horizons, noting that reliance solely on large-cap technology stocks may be a limiting approach. Instead, he advocates for a diversified investment strategy that includes lesser-known semiconductor manufacturers, real estate firms engaged in data center operations, and specialized software providers that stand to gain from the AI surge. Such a multifaceted strategy not only enhances the potential for returns but also mitigates risks associated with market volatility by spreading investments across a range of interconnected sectors.
For those interested in tapping into the expected growth driven by AI and cyber protection, BlackRock’s product offerings—such as the iShares Future AI & Tech ETF (ARTY) and the iShares AI Innovation and Tech Active ETF (BAI)—are worthy of consideration. Both funds have demonstrated promising performance, reflecting Jacobs’ insights about the sector’s potential. With recent gains of approximately 13%, these ETFs epitomize the fertile intersection of AI advancements and the surrounding infrastructure and security needs.
2025 promises to be a pivotal year for investors, particularly those willing to explore areas beyond the conventional tech giants. The confluence of infrastructure enhancement, robust cybersecurity, and the expanding footprint of AI will provide fertile ground for strategic investments. By aligning investment strategies with these emerging trends, stakeholders can position themselves for considerable long-term benefits in a rapidly evolving digital economy.