As we move toward 2025, financial analysts anticipate significant growth in infrastructure and cybersecurity sectors, driven largely by the accelerated adoption of artificial intelligence (AI). Jay Jacobs, the U.S. head of thematic and active ETFs at BlackRock, emphasizes that we are at an early stage in the AI adoption cycle. This period is expected to generate potent investment opportunities in the coming years, particularly as organizations rush to enhance their technological capabilities to harness AI’s potential.
Jacobs articulates a fundamental aspect of AI’s growth: the companies pioneering these technologies must invest heavily in their foundational infrastructure, specifically data centers. These facilities are crucial for processing the immense amounts of data that AI systems require. However, it’s not just the physical assets like data centers that will see increased investment, but also the fortification of cybersecurity measures. As businesses recognize the sensitivity and value of their data, the demand for robust security solutions is expected to surge. Jacobs reinforces that investing in cybersecurity is not merely prudent but essential, as this sector is poised for rapid revenue growth alongside the proliferation of AI technologies.
One of the often-overlooked components in the AI narrative is the tangible infrastructure that enables these technologies to function. Jacobs points out that despite the allure of virtual innovations, a solid foundation of physical resources is necessary. Essential elements like energy supply, data centers, semiconductor production, and even real estate play pivotal roles in supporting AI capabilities. As these industries expand to meet growing demands, investors should broaden their perspectives and recognize various sectors that contribute to the AI ecosystem.
Diversification in Investment Strategies
Jacobs argues for a diverse investment approach, highlighting that reliance solely on well-established tech giants may limit future opportunities. Instead, he encourages investors to explore a broad array of stocks, including lesser-known semiconductor firms and specialized software companies that cater to AI’s rising prominence. He mentions BlackRock’s iShares Future AI & Tech ETF (ARTY) and the iShares AI Innovation and Tech Active ETF (BAI) as exemplary tools for navigating this landscape. The performance of these funds has already shown promise, with substantial gains reflecting market interest and confidence in AI-driven entities.
The transformative nature of AI and its intertwined relationship with infrastructure and cybersecurity presents a compelling investment thesis for 2025 and beyond. The dynamics of the AI market underscore the need for a comprehensive investment strategy that recognizes the importance of both technological advancement and the physical assets required to support it. As we advance, savvy investors will likely look beyond traditional tech stocks to embrace a wider array of sectors, ultimately positioning themselves to benefit from the unfolding AI revolution.