By Amy Miller ( September 15, 2025, 23:52 GMT | Insight) — The deep-pocketed tech industry has proven once again that it can block efforts to regulate artificial intelligence, even in California. Even though California legislators approved more than a dozen bills aimed at regulating AI, from chatbot safety, to transparency, to data centers, several proposals attempting to put guardrails around AI died after facing concerted opposition, including the closely watched Automated Decisions Safety Act, which would have set new rules for AI systems that make consequential decisions about individuals.The deep-pocketed tech industry has proven once again that it can block efforts to regulate artificial intelligence, even in California….
AI Insights
Why Infuse Asset Management’s Q2 2025 Letter Signals a Shift to Artificial Intelligence and Cybersecurity Plays
The rapid evolution of artificial intelligence (AI) and the escalating complexity of cybersecurity threats have positioned these sectors as the next frontier of investment opportunity. Infuse Asset Management’s Q2 2025 letter underscores this shift, emphasizing AI’s transformative potential and the urgent need for robust cybersecurity infrastructure to mitigate risks. Below, we dissect the macroeconomic forces, sector-specific tailwinds, and portfolio reallocation strategies investors should consider in this new paradigm.
The AI Uprising: Macro Drivers of a Paradigm Shift
The AI revolution is accelerating at a pace that dwarfs historical technological booms. Take ChatGPT, which reached 800 million weekly active users by April 2025—a milestone achieved in just two years. This breakneck adoption is straining existing cybersecurity frameworks, creating a critical gap between innovation and defense.
Meanwhile, the U.S.-China AI rivalry is fueling a global arms race. China’s industrial robot installations surged from 50,000 in 2014 to 290,000 in 2023, outpacing U.S. adoption. This competition isn’t just about economic dominance—it’s a geopolitical chess match where data sovereignty, espionage, and AI-driven cyberattacks now loom large. The concept of “Mutually Assured AI Malfunction (MAIM)” highlights how even a single vulnerability could destabilize critical systems, much like nuclear deterrence but with far less predictability.
Cybersecurity: The New Infrastructure for an AI World
As AI systems expand into physical domains—think autonomous taxis or industrial robots—so do their vulnerabilities. In San Francisco, autonomous taxi providers now command 27% market share, yet their software is a prime target for cyberattacks. The decline in AI inference costs (outpacing historical declines in electricity and memory) has made it cheaper to deploy AI, but it also lowers the barrier for malicious actors to weaponize it.
Tech giants are pouring capital into AI infrastructure—NVIDIA and Microsoft alone increased CapEx from $33 billion to $212 billion between 2014 and 2024. This influx creates a vast, interconnected attack surface. Investors should prioritize cybersecurity firms that specialize in quantum-resistant encryption, AI-driven threat detection, and real-time infrastructure protection.
The Human Element: Skills Gaps and Strategic Shifts
The demand for AI expertise is soaring, but the workforce is struggling to keep pace. U.S. AI-related IT job postings have surged 448% since 2018, while non-AI IT roles have declined by 9%. This bifurcation signals two realities:
1. Cybersecurity skills are now mission-critical for safeguarding AI systems.
2. Ethical AI development and governance are emerging as compliance priorities, particularly in regulated industries.
The data will likely show a stark divergence, reinforcing the need for investors to back training platforms and cybersecurity firms bridging this skills gap.
Portfolio Reallocation: Where to Deploy Capital
Infuse’s insights suggest three actionable strategies:
-
Core Holdings in Cybersecurity Leaders:
Target firms like CrowdStrike (CRWD) and Palo Alto Networks (PANW), which excel in AI-powered threat detection and endpoint security. -
Geopolitical Plays:
Invest in companies addressing data sovereignty and cross-border compliance, such as Palantir (PLTR) or Cloudflare (NET), which offer hybrid cloud solutions. -
Emerging Sectors:
Look to quantum computing security (e.g., Rigetti Computing (RGTI)) and AI governance platforms like DataRobot (NASDAQ: MGNI), which help enterprises audit and validate AI models.
The Bottom Line: AI’s Growth Requires a Security Foundation
The “productivity paradox” of AI—where speculative valuations outstrip tangible ROI—is real. Yet, cybersecurity is one area where returns are measurable: breaches cost companies millions, and defenses reduce risk. Investors should treat cybersecurity as the bedrock of their AI investments.
As Infuse’s letter implies, the next decade will belong to those who balance AI’s promise with ironclad security. Position portfolios accordingly.
JR Research
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AI Insights
This Artificial Intelligence (AI) ETF Has Outperformed the Market By 2.4X Since Inception and Only Holds Profitable Companies
For well under $100, you can buy one share of this under-the-radar AI exchange-traded fund (ETF) that looks poised to continue to outperform the market.
For this article, I asked myself: Where would I start investing if I had less than $100 to invest?
Image source: Getty Images.
An AI ETF that’s concentrated and full of leading and profitable companies
This answer to my question popped into my head: I’d want a concentrated exchange-traded fund (ETF) focused on leading and profitable companies heavily involved in artificial intelligence (AI), but with enough differences among themselves.
Why an ETF? Because I’d not want to put all my (investing) eggs in one basket.
Why AI? Because it’s poised to be the biggest secular trend in many decades or even generations.
Why concentrated? Because I believe if investors are going to buy a very diversified ETF, they might as well buy the entire market, so to speak, and buy an S&P 500 index ETF. Indeed, buying an S&P 500 index fund is a good idea for many investors, and recommended by investing legend Warren Buffett. That said, over the long run, I think an AI ETF full of only leading and profitable companies will beat the S&P 500 index.
Roundhill Magnificent Seven ETF (MAGS): Overview
And bingo! There is such an ETF — the Roundhill Magnificent Seven ETF (MAGS 1.92%). It has seven holdings — the so-called “Magnificent Seven” stocks: Alphabet (GOOG 4.38%) (GOOGL 4.53%), Amazon (AMZN 1.42%), Apple (AAPL 1.06%), Meta Platforms (META 1.18%), Microsoft (MSFT 1.01%), Nvidia (NVDA -0.10%), and Tesla (TSLA 3.54%). This ETF closed at $62.93 per share on Friday, Sept. 12.
These megacap stocks (stocks with market caps over $200 billion) were given the Magnificent Seven name a couple of years ago by a Wall Street analyst due to their strong growth and large influence on the overall market. The name comes from the title of a 1960 Western film.
Two other main traits I like about this ETF:
- Its expense ratio is reasonable at 0.29%.
- It provides equal-weight exposure to the seven stocks. At each quarterly rebalancing, the stocks will be reset to an equal weighting of about 14.28% (100% divided by 7).
Since its inception in April 2023 (almost 2.5 years), the Roundhill Magnificent Seven ETF has returned 160% — 2.4 times the S&P 500’s 65.9% return.
Roundhill Magnificent Seven ETF (MAGS): All stock holdings
Stocks are listed in order of current weight in portfolio. Keep in mind the ETF is rebalanced quarterly to make stocks equally weighted.
|
Holding No. |
Company |
Market Cap |
Wall Street’s Projected Annualized EPS Growth Over Next 5 Years |
Weight (% of Portfolio) |
1 Year/ 10-Year Returns |
|---|---|---|---|---|---|
|
1 |
Alphabet | $2.9 trillion | 14.7% | 17.72% | 55.9% / 677% |
|
2 |
Nvidia | $4.3 trillion | 34.9% | 15.00% | 49.3% / 32,210% |
|
3 |
Apple | $3.5 trillion | 8.8% | 14.13% | 5.6% / 812% |
|
4 |
Tesla | $1.3 trillion | 13.4% | 13.81% | 72.3% / 2,270% |
|
5 |
Amazon | $2.4 trillion | 18.6% | 13.30% | 22% / 762% |
| 6 | Meta Platforms | $1.9 trillion | 12.9% | 13.16% | 44.3% / 725% |
| 7 | Microsoft | $3.8 trillion | 16.6% | 12.76% | 20.3% / 1,250% |
|
Overall ETF |
N/A |
Total net assets of $2.86 billion |
N/A |
100% |
40.5% / N/A |
|
N/A |
S&P 500 |
N/A |
N/A |
N/A |
19.2% / 300% |
Data sources: Roundhill Magnificent Seven ETF, finviz.com, and YCharts. EPS = earnings per share. Data as of Sept. 12, 2025.
All these companies are profitable leaders in their core markets, and heavily involved in AI. Nvidia produces AI tech that enables others to use AI, while the other companies mainly use AI to improve their existing products and develop new ones.
Alphabet’s Google is the world leader in internet search. Its cloud computing business is No. 3 in the world, behind Amazon Web Services (AWS) and Microsoft Azure. The company also has other businesses, notably its driverless vehicle subsidiary, Waymo. (You can read here why I believe Nvidia is the best driverless vehicle stock.)
Nvidia is often described as the world’s leading maker of AI chips — and that it is. But it’s much more. It’s the world leader in supplying technology infrastructure for enabling AI. It’s also the global leader in graphics processing units (GPUs) for computer gaming.
Apple’s iPhone holds the No. 2 spot in the global smartphone market, behind Samsung. However, it dominates the U.S. market. The company’s services business is attractive, as it consists of recurring revenue and has been steadily growing.
Amazon operates the world’s No. 1 e-commerce business and the world’s No. 1 cloud computing business. It also has many other businesses, notably its Fresh and Amazon Prime Now (Whole Foods) grocery delivery operations.
Meta Platforms operates the world’s leading social media site, Facebook, as well as Instagram, Threads, and messaging app WhatsApp.
Microsoft’s Word has long been the world’s leading word processing software. Word is part of Microsoft Office, a suite of popular software for personal computers (PCs). Its Azure is the world’s second-largest cloud computing business.
Tesla remains the No. 1 electric vehicle (EV) maker, by far, in the U.S. despite struggling recently. In the first half of 2025, China’s BYD surpassed Tesla as the world’s leader in all-electric vehicles by number of units sold. CEO Elon Musk touts that the company’s robotaxi and Optimus humanoid robot businesses will eventually be larger than its EV sales business.
In short, the Roundhill Magnificent Seven ETF is poised to continue to benefit from the growth of artificial intelligence. Technically, it doesn’t have a long-term history. But if it had existed many years ago, it’s easy to tell that its long-term performance would be very strong because the long-term performances of all its holdings have been anywhere from great to spectacular.
Beth McKenna has positions in Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool recommends BYD Company and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
OpenAI is rolling out the GPT-5 Codex model to all Codex instances, including Terminal, IDE extension, and Codex Web (chatgpt.com/codex).
Codex is an AI agent that allows you to automate coding-related tasks. You can delegate your complex tasks to Codex and watch it execute code for you.
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Source: BleepingComputer.com
Even if you don’t know programming languages, you can use Codex to “vibe code” your apps and web apps.
But so far, it has fallen a bit short of Claude Code, which is the market leader in the AI coding space.
Today, OpenAI confirmed it’s rolling out the Codex-special GPT-5 model.
In a blog post, OpenAI stated the GPT-5 Codex model excels in real-world coding tasks, achieving a 74.5% success rate on the SWE-bench Verified benchmark.
In code refactoring evaluations, it improved from 33.9% with GPT-5 to 51.3% with GPT-5-Codex.
GPT-5-Codex is still rolling out. I don’t see it on my Terminal yet, even though I pay for ChatGPT Plus ($20).
OpenAI says it will be fully rolled out to everyone in the coming days.
46% of environments had passwords cracked, nearly doubling from 25% last year.
Get the Picus Blue Report 2025 now for a comprehensive look at more findings on prevention, detection, and data exfiltration trends.
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