In recent years, AI has broadened beyond data centre-led infrastructure spending into adjacent industries such as cyber security, autonomous vehicles, and robotics.
Organisations are expected to spend approximately $6.2 billion on information security and risk management in 2025, a 14.4 per cent increase from the year prior, according to Gartner.
“This trend will continue to provide investors access to other structural growth dynamics that would not otherwise be found in traditional stocks and bonds,” Lam said.
“Thematic ETFs often capture these emerging themes and allow investors to build diversified and differentiated portfolios with the potential for enhanced risk-adjusted returns,” he added.
China is one of the key players in AI investment and advanced manufacturing, fundamentally shifting global supply chains.
“China’s strategic pivot from traditional goods exports to AI and advanced manufacturing will likely provide strong tailwinds for the country’s longer-term growth prospects,” the investment strategist said.
Emerging areas like humanoid robotics may increase the productive capacity of China’s economy, particularly as it faces headwinds from an ageing population and traditional manufacturing jobs gradually becoming displaced.
As a result, supply chains are being rerouted to neighbouring countries like Vietnam and Bangladesh.
“Competition will only increase from here which fosters innovation and growth of new products and services for end consumers,” Lam said.
“But as the global powerhouses of technology in the US and China collide, we will also see geopolitical power dynamics shift back and forth as both countries strive to win the AI arms race,” he added.
While it is undeniable that AI and the broader technology theme are here to stay, it is important that investors are able to distinguish between fads and more legitimate structural growth opportunities, according to Lam.
“Being able to do so will allow financial professionals to add differentiated growth drivers to a broader investment portfolio and potentially enhance risk-adjusted returns.”
To hear Hugh Lam speak further on AI advancement in the face of China’s technological development, come along to the Australian Wealth Management Summit 2025. Attendance is free for financial advisers.
Run in partnership with principal partner, Metrics, the summit will take place on Friday, 22 August 2025 at Sofitel Sydney Wentworth. Click here to buy tickets.
To learn more about the event, including the speakers and agenda, click here.
