The Virtus Artificial Intelligence & Technology Opportunities Fund (AIO) is experiencing downward pressure due to several factors impacting the technology sector. A significant development is the ongoing competition to challenge Nvidia's dominance in AI chips, with companies like Amazon and AMD offering alternatives. This competition could lead to pricing pressures and market share shifts, affecting the broader AI technology landscape. Additionally, the Biden administration's expanded trade bans on China's chip industry are creating uncertainty, potentially disrupting supply chains and impacting companies reliant on Chinese technology markets.
Moreover, the U.S. stock market is facing a period of "bad breadth," where more stocks in the S&P 500 are declining than rising, despite the index's overall gains. This unusual market condition, not seen in over 20 years, is causing concern among investors and contributing to volatility in technology stocks. The S&P 500 Value Index has also experienced a record losing streak, highlighting the broader market's struggles. These factors collectively contribute to the pressure on technology-focused funds like AIO.
The AIO ETF is down 4.74% in pre-market hours on Friday, December 13, falling to $23.10 as of 6:03 AM ET.