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In this episode of ETF Spotlight, I speak with Jay Jacobs, U.S. Head of Thematics & Active Equity ETFs at BlackRock, about the 2024 thematic investing outlook.

Mega-cap stocks surged last year, thanks largely to the AI Bonanza. With AI adoption and spending expected to expand this year, new avenues for business growth will open up for tech companies beyond the Magnificent Seven.

We’ll see more enterprise spending on AI due to increasing use cases and significant cost savings. According to BlackRock, investors should focus broadly on the AI value chain and specifically on semiconductors.

NVIDIA (NVDA - Free Report), AMD (AMD - Free Report), and Broadcom (AVGO - Free Report) are the top holdings in the iShares PHLX Semiconductor ETF (SOXX - Free Report). The iShares Robotics and Artificial Intelligence Multisector ETF (IRBO - Free Report) includes many small- and mid-cap companies that are attractively valued compared to mega caps.

Biotech companies struggled last year as interest rates surged. In addition to attractive valuations, companies specializing in genomics and neuroscience are poised to benefit from AI-driven medical innovation.

The iShares Biotechnology ETF (IBB - Free Report) and the iShares Genomics Immunology and Healthcare ETF (IDNA - Free Report) are worth considering.

Many American companies are now focusing on nearshoring, friend-shoring, and reshoring to make their supply chains safer and more reliable. India and Mexico are among the biggest beneficiaries of this trend.

Running Length: 00:23:27

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