The artificial intelligence (AI) trade is evolving, and BlackRock says investors are getting more selective. Instead of sticking with broad Big Tech exposure, money is flowing into AI-specific exchange-traded funds (ETFs) and blockchain-related plays, reflecting a sharper focus on disruptive technologies.
From Big Tech to AI-Specific ETFs
According to Jay Jacobs, BlackRock’s U.S. head of equity ETFs, one of the biggest trades this year has been investors rotating out of traditional tech sector funds and into AI-focused ETFs. Speaking on CNBC’s ETF Edge, Jacobs pointed to the iShares A.I. Innovation and Tech Active ETF (BAI) as a prime example.
The fund provides exposure across the AI ecosystem, from semiconductor manufacturers to companies developing large language models. As of this week, Nvidia (NVDA), Broadcom (AVGO), Meta Platforms (META), and Microsoft (MSFT) were listed as top holdings.
Data from FactSet shows that electronic technology and technology services stocks make up more than 85% of BAI’s portfolio. While the ETF fell about 5% on Friday alongside the Nasdaq, it remains up 36% since its launch in October 2024.
"People want to play this potentially very disruptive theme," Jacobs said, noting that investors are increasingly looking for granular exposure to AI rather than broad tech baskets.
Blockchain and Ethereum ETFs Gain Traction
Jacobs also highlighted growing enthusiasm for blockchain-related stocks, particularly those tied to Ethereum. BlackRock’s iShares Ethereum Trust ETF (ETHA), which tracks the spot price of ether, has surged nearly 42% over the past 12 weeks.
"Ethereum is really a bet on blockchain technology and other ways to use it through things like stablecoins and tokenization," Jacobs explained. He argued that blockchain represents another disruptive theme attracting investor capital.
Amplify’s BLOK and the Broader Blockchain Play
It’s not just BlackRock leaning into blockchain. Christian Magoon, CEO of Amplify ETFs, pointed to his firm’s Amplify Transformational Data Sharing ETF (BLOK) as another vehicle for investors seeking blockchain exposure. BLOK is actively managed and invests in companies directly involved in developing or deploying blockchain infrastructure.
"There are a variety of use cases around blockchain, whether that’s stablecoins for payments or tokenization of assets like real estate or stocks," Magoon said. He added that new regulations could provide a tailwind for the sector.
In July, President Donald Trump signed the GENIUS Act stablecoin legislation into law, a move Magoon believes could boost investor confidence in digital assets. "We’re a pioneer in that space, and we think the upside is gonna continue, especially given the current administration and some of the regulatory moves we’re seeing from exchanges as well as large capital market participants," he said.
Despite falling more than 5% on Friday, BLOK is still up nearly 89% over the past year, underscoring the strength of investor demand.
The Bigger Picture: Targeted Themes Over Broad Exposure
The shift into AI and blockchain ETFs reflects a broader trend in markets: investors are moving away from broad sector bets and toward targeted themes. For many, the appeal lies in capturing the upside of technologies that could reshape industries, from semiconductors and cloud computing to fintech and tokenized assets.
At the same time, the volatility of these funds—BAI and BLOK both fell sharply on Friday—shows that thematic investing comes with risks. Concentrated exposure can amplify both gains and losses, particularly when tied to fast-moving sectors like AI and crypto.
Still, the long-term growth story remains intact. Nvidia’s dominance in GPUs, Microsoft’s integration of AI into enterprise software, and Ethereum’s role in blockchain innovation all point to structural shifts that investors are eager to capture.
The Bottom Line
BlackRock’s latest insights suggest that AI and blockchain are no longer niche trades—they’re becoming mainstream themes for both institutional and retail investors. With ETFs like BAI, ETHA, and BLOK attracting capital, the market is signaling that investors want more than just broad tech exposure. They want to bet directly on the technologies they believe will define the next decade.
For now, the message is clear: AI and blockchain are where the money is moving, even if the ride comes with volatility.