M&A: An Overlooked ETF Investing Zone of AI Boom?

Core Insights - Global data-center dealmaking reached a record high through November 2025, driven by immense demand for computing infrastructure to support the growth of artificial intelligence (AI) [1][10] - The total deal value for data-center transactions was just under $61 billion, surpassing the previous record of $60.81 billion set in 2024 [2][5] - The tech sector, particularly AI hyperscalers, has significantly increased interest in data centers, with major capital expenditures planned to scale infrastructure [3] Data-Center Investment Trends - More than 100 data-center transactions occurred through November, contributing to a total deal value of nearly $61 billion [2] - Since 2019, data-center dealmaking in the U.S. and Canada has totaled approximately $160 billion, while the Asia-Pacific region reached nearly $40 billion and Europe $24.2 billion [2] - Data-center investments, including mergers, acquisitions, asset sales, and equity investments, have set new records in 2025 [5] M&A Activity and Projections - Bain & Company projects that 2025 will see the second-highest total deal value on record at $4.8 trillion, marking a 36% year-over-year increase [6] - Tech M&A deal value has increased by over 76% year to date, reaching $478 billion, with a significant portion involving AI-native companies [7] Economic Factors Influencing M&A - The Federal Reserve's three rate cuts in 2025 may lower long-term bond yields, making debt financing cheaper and potentially boosting M&A activities [8] - Despite rate cuts, global economic growth remains uncertain, and policy uncertainty may affect business confidence [8] Investment Opportunities - Investors are encouraged to monitor ETFs such as NYLI Merger Arbitrage ETF (MNA), which has risen about 8.7% this year, as deal-making benefits investment banks [9] - ETFs like iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI) and Invesco KBW Bank ETF (KBWB) are expected to benefit from increased M&A activities [9] - The Roundhill Generative AI & Technology ETF (CHAT) is projected to gain traction, having increased by approximately 47.2% this year [11]