Finance
AI growth is just getting started, BlackRock’s thematic ETF head says
BlackRock expects infrastructure and cybersecurity plays to shine in 2025.
Jay Jacobs, the firm’s U.S. head of thematic and active ETFs, cites the artificial intelligence boom as a major 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 out their data centers. Plus, keeping that data safe is also a sound investment play for the new year.
“If you think about your data, you want to spend more on cybersecurity as it gets more valuable,” he said. “We think this is really going to benefit the cybersecurity [and the] software community which is seeing very rapid revenue growth based off of this AI.”
Jacobs also sees a wider impact in terms of the supporting infrastructure.
“I think what people forget is kind of, magical as technology is, there’s real physical things on the ground that run that technology, whether it’s power, whether it’s data centers and real estate, whether it’s chips. It’s not just something that lives in the ether, in the cloud, there’s real physical things that have to happen, and that means energy, that means more materials like copper, that means more real estate. You really have to think about kind of the physical infrastructure that underlies it,” he added.
So, for Jacobs, the theme is widening one’s investment scope.
“It’s not just about megacap tech names. There’s other semiconductor companies, there’s other data center companies, there’s 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 in AI. The iShares Future AI & Tech ETF is up around 13% for the year so far, while the iShares AI Innovation and Tech Active ETF is up around 13% since its Oct. 21 launch as of Friday’s close.
‘The Big Money Show’ co-hosts discuss buy now, pay later spending options and the impact it will now have on your credit score.
Small, everyday purchases like a meal from DoorDash are now able to be financed through eat now, pay later options — a practice that some experts deem “predatory.”
“You’ve got to have enough sense to not follow the urge to finance a taco, okay? You have got to be an adult,” career coach Ken Coleman told “The Big Money Show,” Wednesday.
“This is predatory, and it’s going to get a lot of people in deep trouble.”
RISKS OF BUY NOW, PAY LATER: ‘TICKET TO OVERSPENDING,’ EXPERT SAYS
DoorDash and Klarna are now partnering up to extend buy now, pay later options to consumers. (Reuters, Getty / Getty Images)
Financial wellness experts are continuously sounding the alarm to cash-strapped consumers, warning them of the devastating impact this financial strategy could have on their credit score as some lenders will begin reporting those loans to credit agencies.
Consumers may risk getting hit with late fees and interest rates, similar to credit cards.
“So your sandwich might show up on your FICO score, especially if you pay for it late,” FOX Business’ Jackie DeAngelis explained.
EXPERTS WARN HIDDEN RISKS OF BUY NOW, PAY LATER
Major players like Affirm, Afterpay, and Klarna have risen to prominence at a time when Americans continue to grapple with persisting inflation, high interest rates and student loan payments, which resumed in October 2023 after a pause due to the COVID-19 pandemic.
Ramsey Solutions personal finance expert and ‘The Ramsey Show’ co-host George Kamel discusses the ‘buy now, pay later’ craze and the trend that celebrates the financial benefits of being childless.
“The Big Money Show” co-host Taylor Riggs offered a different perspective, suggesting that company CEOs have a “duty” to attract as many customers as they want.
“Unfortunately for me, this always comes down to financial literacy — which I know is so much in your heart about training people to save now by later,” she told Coleman, who regularly offers financial advice to callers on “The Ramsey Show.”
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Coleman continued to come to the defense of financially “desperate” consumers, arguing that companies are targeting “immature” customers.
“I’m for American businesses being able to do whatever they want to do under the law. That’s fine. But let’s still call it what it is: it’s predatory, and they know who their customers are,” Coleman concluded, “And I’m telling you, they’re talking about weak-minded, immature, desperate people.”
FOX Business’ Daniella Genovese contributed to this report.
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