BlackRock sees shift in artificial intelligence trade. Where investors are putting their money now.
News Summary
BlackRock observes a shift among Big Tech investors, with capital moving from traditional tech stocks to AI-specific thematic ETFs. Jay Jacobs, the firm's U.S. head of equity ETFs, notes that products like BlackRock's iShares A.I. Innovation and Tech Active ETF (BAI) are attracting significant funds. The ETF provides exposure to the AI ecosystem, from semiconductor manufacturers to large language models, with top holdings including Nvidia, Broadcom, Meta Platforms, and Microsoft. Despite a recent dip, BAI has risen 36% since its inception last October. Jacobs is also bullish on blockchain-related stocks, highlighting strong enthusiasm around Ethereum that has fueled significant investor interest in BlackRock's iShares Ethereum Trust ETF (ETHA), which is up almost 42% over the past 12 weeks. He views Ethereum as a bet on blockchain technology and its applications through stablecoins and tokenization. Christian Magoon, Amplify ETFs founder and CEO, also sees opportunity in the cryptocurrency space, emphasizing President Donald Trump's GENIUS Act stablecoin legislation, signed in July 2025, as a regulatory tailwind boosting investor confidence in stablecoins. Amplify's Transformational Data Sharing ETF (BLOK) has gained nearly 89% over the past year.
Background
Since the mid-2020s, artificial intelligence and blockchain technologies have been central drivers of global technological innovation and investment. With the increasingly broad application of AI across various industries and the maturation of blockchain technology in financial services, supply chain management, and digital assets, investor interest in these disruptive technologies has remained high. In 2025, during President Donald Trump's second term, the U.S. government's regulatory stance on digital assets has become clearer. The signing of the GENIUS Act, in particular, marks a critical step in establishing a regulatory framework for stablecoins in the U.S., aiming to provide legitimacy and clarity to this rapidly evolving market, which could attract greater institutional investment into the digital asset space.
In-Depth AI Insights
What deeper market signals does the shift from broad tech stocks to AI-specific ETFs convey? - This indicates a market transitioning from an early-stage “thematic hype” to a more mature “refined allocation” phase. In nascent sectors like AI, investors are no longer content with indirect exposure via broad tech indices but seek purer, more concentrated investments in specific verticals. - This shift reflects a pursuit of capital efficiency and risk-adjusted returns. Through AI-specific ETFs, investors can better isolate and capture the value of core AI drivers, avoiding the dilution effect of diversified business lines in traditional tech giants. - It may also foreshadow increased market recognition for sub-segments within AI, such as specific investment preferences for semiconductors, model development, or cloud infrastructure, potentially leading to further differentiation in future AI capital flows. What are the strategic implications of the Trump administration's GENIUS Act for stablecoins and the broader digital asset market? - The signing of the GENIUS Act can be viewed as a strategic move by the U.S. to establish global leadership in the digital asset space. By providing regulatory clarity, the U.S. aims to attract stablecoin issuers and related financial institutions to operate domestically, thereby reinforcing the dollar's dominance in the global digital economy. - The Act provides legitimacy and confidence for institutional investors and traditional financial entities to enter the stablecoin market, potentially accelerating the integration of stablecoins with conventional financial systems. This extends beyond payments and settlements to more complex applications like asset tokenization, expanding the practical boundaries of blockchain technology. - However, it could also spark a global competition for digital asset regulatory supremacy, with other major economies potentially emulating or introducing their own frameworks, affecting international interoperability and market structure for digital assets. Given the strong performance of AI and blockchain-related ETFs, how should investors assess their potential risks and future volatility? - The significant returns from these high-growth thematic ETFs often come with higher valuation risks. Investors need to scrutinize whether the earnings capabilities and fundamentals of their constituent holdings can sustain current valuation levels, guarding against potential “bubble” indicators. - Concentrated investment in specific themes also implies higher industry concentration risk. Any regulatory changes, technological bottlenecks, or shifts in market sentiment targeting AI or blockchain could impact these ETFs more severely than the broader market. - Furthermore, rapidly evolving technological fields entail “winner-take-all” dynamics and technological obsolescence risks. Currently leading companies might face challenges from emerging competitors or disruptive technologies, requiring investors to closely monitor technological advancements and evolving competitive landscapes.