BlackRock is observing a clear shift in investor behavior across the technology sector, as many move away from broad tech exposure toward more focused artificial intelligence (AI) investments.
Jay Jacobs, BlackRock’s U.S. head of equity ETFs, said that investors are increasingly targeting specific themes rather than holding traditional sector funds. “One of the biggest trades we’re seeing this year is people leaving the traditional tech sector and getting more granular into AI-specific ETFs, like BAI [the iShares A.I. Innovation and Tech Active ETF] from BlackRock,” Jacobs told CNBC’s ETF Edge this week.
Investors focus on AI ecosystem leaders
The BAI ETF provides exposure to companies spanning the AI value chain—from semiconductor manufacturers to developers of large language models. According to BlackRock’s iShares website, its top holdings include Nvidia, Broadcom, Meta Platforms, and Microsoft.
Data from FactSet shows that electronic technology and technology services stocks account for more than 85% of the fund’s portfolio. Despite a roughly 5% drop on Friday in line with the tech-heavy Nasdaq, the ETF has gained 36% since its launch on Oct. 21, 2024.
‘People want to play this potentially very disruptive theme’
Jacobs also highlighted growing enthusiasm for blockchain-related assets, with ethereum emerging as a major catalyst. He pointed to BlackRock’s iShares Ethereum Trust ETF (ETHA), a passively managed fund tracking the spot price of ether, which has climbed nearly 42% over the past 12 weeks.
“Ethereum is really a bet on blockchain technology and its broader applications, from stablecoins to tokenization,” Jacobs said. “People want to play this potentially very disruptive theme.”
Blockchain ETFs benefit from rising regulation and adoption
Christian Magoon, founder and CEO of Amplify ETFs, echoed the bullish sentiment, noting that blockchain adoption continues to expand beyond cryptocurrencies. Amplify’s Transformational Data Sharing ETF (BLOK) invests in companies developing or deploying blockchain infrastructure, providing investors with diversified exposure to the sector.
“There are a variety of use cases around blockchain—whether that’s stablecoins for payments or tokenization of assets such as real estate and stocks,” Magoon said in the same interview. “We think this is a major theme that’s going to impact not only technology but also fintech and the broader crypto community.”
Magoon cited new U.S. regulations as a potential tailwind for the industry, including the GENIUS Act stablecoin legislation signed into law by President Donald Trump in July, which aims to strengthen investor confidence in digital assets.
“We’re a pioneer in that space, and we think the upside is going to continue, especially given the current administration and some of the regulatory moves we’re seeing from exchanges and large capital market participants,” he added.
ETF performance remains strong despite volatility
While both BAI and BLOK slipped more than 5% on Friday amid broader market weakness, their long-term performance remains impressive. BAI has surged 36% since inception, and BLOK is up nearly 89% over the past year, reflecting investors’ sustained appetite for high-growth, innovation-driven themes.
