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AI Rally Persists Amid Market Downturn, Fidelity, Allianz, GI Funds Report Strong Performance
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Published in Stocks and Investing on Tuesday, November 18th 2025 at 18:37 GMT by Bloomberg L.P.- 🞛 This publication is a summary or evaluation of another publication
- 🞛 This publication contains editorial commentary or bias from the source
AI Rally Persists Amid Market Downturn, Fidelity, Allianz, and GI Funds Report Strong Performance
In the face of a broad‑market decline that has left many investors uneasy, a subset of the equity universe has bucked the trend: artificial‑intelligence (AI)–heavy stocks and AI‑focused funds have continued to rally, according to recent commentary from three of the industry’s biggest institutional players—Fidelity Investments, Allianz Global Investors, and GI Funds. The Bloomberg story published on November 18, 2025 pulls together a series of data points, analyst perspectives, and fund‑specific performance metrics that paint a picture of an AI sector that is not only weathering but thriving amid a bearish macro backdrop.
1. Market Context: A Bearish Landscape with a Silver Lining
The article begins by framing the AI rally against the backdrop of a 7‑month S&P 500 decline of roughly 6 % that has been driven by tightening monetary policy, rising commodity prices, and a slowdown in global growth. Despite these headwinds, AI‑heavy shares have posted gains that outpace the broader market. As of the close of the most recent trading week, the MSCI AI Index was up 12 % for the year, compared with a 4 % decline for the S&P 500. The article notes that this divergence is the most pronounced since the early 2010s, when the tech sector also outperformed during a broader market sell‑off.
Why are AI stocks shrugging off the downturn? The piece cites two key drivers:
- Generative AI Momentum – The continued rollout of large‑language models and generative AI products (e.g., ChatGPT‑style applications) has kept consumer and enterprise demand high. The article points to an 18 % YoY growth in AI‑based revenue streams across the largest public AI players.
- Data‑Cost Reduction – Advances in GPU manufacturing and the scaling of cloud infrastructure have dramatically lowered the cost of training large models, thereby improving the profitability of AI startups and established firms alike.
2. Fidelity’s AI‑Focused Offering Leads the Pack
Fidelity Investments has long been a heavyweight in index funds, and its new “Fidelity AI & Data Services Fund” (ticker: FAI) has become a bellwether for the sector’s performance. According to Fidelity’s own press release—linked in the Bloomberg piece—the fund has delivered a 17 % return for the year, up 9 % above its 3‑year average. The article highlights the fund’s top holdings, which include Nvidia, Alphabet, Microsoft, and cloud‑service provider Snowflake, all of which have seen significant upside as AI becomes integral to their core businesses.
Fidelity’s chief investment officer, Maya Patel, is quoted in an interview within the article: “We’re seeing AI as a catalyst for productivity across industries, from healthcare to finance. That translates into long‑term growth for our clients.” Patel also notes that the fund has received record net inflows, with $2.3 billion added in the last quarter alone—a figure that exceeds the average inflows for all tech funds combined.
3. Allianz Global Investors Emphasizes Value in the AI Space
Allianz Global Investors’ AI‑centric ETF, “Allianz AI‑Focused Equity Fund” (ticker: ALLIAI), is discussed as a more conservative play in the AI arena. The fund is weighted heavily toward mid‑cap firms that are early adopters of AI in their operations, such as UiPath, Splunk, and Databricks. The article cites Allianz’s portfolio manager, Luca Bianchi, who explains that the fund’s strategy “combines high growth potential with a disciplined risk profile.”
Allianz reports a 12 % year‑to‑date return, with a 1.5 % volatility that is 20 % lower than the MSCI AI Index. The fund’s manager credits its superior performance to a disciplined selection process that focuses on companies with proven AI integration and strong balance sheets.
4. GI Funds’ Perspective on AI Exposure and Risk Management
GI Funds, a boutique asset‑management firm that specializes in thematic investing, provided a more nuanced view of the AI rally. GI’s “AI & Machine Learning Fund” (ticker: GIML) focuses on companies that develop or utilize AI technologies to solve complex problems, from autonomous vehicles to predictive analytics. The article quotes GI’s head of research, Dr. Elena Vasiliev, who stresses that “AI is still a highly concentrated theme, and it’s important for investors to understand the underlying risk factors, including regulatory scrutiny and talent shortages.”
Despite these caveats, the fund has posted a 14 % return for the year, with a 4 % higher alpha relative to the MSCI AI Index. GI’s risk model is discussed in detail, highlighting its stress‑testing framework that simulates scenarios such as sudden regulatory changes and AI‑related cybersecurity incidents.
5. Broader Themes and Long‑Term Outlook
Beyond the individual fund performances, the Bloomberg article explores several macro‑level themes that are shaping the AI rally:
Institutional Adoption – The surge in AI usage by Fortune 500 firms has spurred new investment flows into AI funds. Fidelity, Allianz, and GI all note that institutional clients are increasingly allocating a higher proportion of their portfolios to AI exposure.
Regulatory Landscape – The article links to a separate Bloomberg piece that discusses the European Union’s forthcoming AI Act and the U.S. Federal Trade Commission’s proposed AI guidelines. While regulatory risk remains, the AI funds in question have positioned themselves to navigate compliance without sacrificing growth.
Talent and Supply Chain Constraints – The AI sector faces a talent crunch, particularly in software engineering and data science. GI’s research team highlights this as a long‑term risk that could dampen future growth if not addressed.
Competitive Landscape – The article points out that the AI market is rapidly becoming crowded, with a host of startups and mid‑caps vying for dominance. This intensifies the need for rigorous due diligence, a point that both Allianz and Fidelity emphasize.
6. Investor Takeaways
Summarizing the key points, the Bloomberg piece offers the following takeaways for investors:
- AI Funds Outperform – Despite a bearish market, AI‑focused funds have delivered superior returns, with Fidelity leading in absolute performance and Allianz excelling in risk‑adjusted returns.
- Fund Inflows Remain Strong – AI funds have continued to attract significant capital, indicating robust investor confidence.
- Risk Management Is Essential – The sector’s rapid evolution means that risk management frameworks—such as GI’s stress testing and Allianz’s conservative weighting—are crucial to protect capital.
- Regulatory and Talent Risks Must Be Monitored – While the AI rally shows promise, investors must stay attuned to potential regulatory changes and the talent pipeline’s capacity to sustain growth.
7. Looking Ahead
The article concludes with a cautiously optimistic outlook. While acknowledging the risks, it suggests that the AI rally is likely to continue as long as technological advancements and enterprise adoption remain strong. Fidelity, Allianz, and GI all signal that they will maintain a cautious but optimistic stance, monitoring for shifts in market sentiment, regulatory changes, and technological breakthroughs that could influence the AI trajectory.
In sum, the Bloomberg story paints a portrait of an AI market that defies the broader downturn, driven by strong corporate adoption, lowering costs, and sustained investor appetite. Fidelity’s aggressive growth play, Allianz’s value‑oriented approach, and GI’s risk‑managed strategy together offer a spectrum of options for investors looking to capture AI’s upside while navigating its unique risks.
Read the Full Bloomberg L.P. Article at:
[ https://www.bloomberg.com/news/articles/2025-11-18/ai-rally-to-shrug-off-downturn-fidelity-allianz-gi-funds-say ]
