Nvidia, Broadcom Lead Fund Manager Buys As Semiconductor Sector Cools – Applied Mat (NASDAQ:AMAT), Analog Devices (NASDAQ:ADI)

Bank of America analysts examined how heavily U.S. fund managers are invested in semiconductor and electronic design automation stocks in the S&P 500.

Based on data from the end of April, the relative weighting of semiconductor stocks are 0.90x — down considerably year-to-date (1.01x in December 2024).

Nvidia Corp NVDA maintains the broadest ownership. Roughly 73% of fund managers own the stock. Positions grew consistently throughout the past year (+67bps Q/Q, +518bps Y/Y).

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The relative weighting of 1.05x remains below the top 16 owned infotech/comm services peers (1.11x median) despite 3x+ faster sales growth prospects per consensus (30% CAGR versus 10% peers).

Within semiconductors, the survey found:

Broadcom Inc AVGO, Applied Materials, Inc AMAT, and Texas Instruments Inc TXN made up 29% to 65% of fund manager ownership.
Skyworks Solutions, Inc SWKS remained the least-owned semi stock with ownership of 3%-4% across all active manager funds.
The most significant expansions in ownership Q/Q were in Broadcom, Intel Corp INTC, KLA Corp KLAC, Nvidia, and Synopsys, Inc SNPS.
The most significant declines Q/Q were in Advanced Micro Devices, Inc AMD, Qualcomm Inc QCOM, Applied Materials, and NXP Semiconductors NXPI.
The greatest increases in depth/overweighting were in Intel, Skyworks Solutions, Micron Technology, Inc MU, Cadence Design Systems, Inc CDNS
The greatest decrease in weighting were for AMD, Teradyne, Inc TER, Applied Materials, Analog Devices, Inc ADI, Microchip Technology Inc MCHP.
Long-only investors were the most overweight in Synopsys, Broadcom, KLA Corp, Micron, and Cadence Design Systems.
Hedge funds were the most overweight Lam Research Corp LRCX, Teradyne, KLA Corp, and Cadence Design Systems.

Russell 1000

Nvidia, Broadcom, Applied Materials, Tesax Instruments, Lam Research had the largest percentage of holdings by active fund managers for Russell 1000 stocks.
At the median, Russell 1000 semis were held by 7.4% of active fund managers, about 400bps below overall tech.
Overall, semiconductors were generally underweight (at 0.47x) relative to the Russell 1000 index, similar to all of tech (0.63x).
Marvell Technology, Inc MRVL, GlobalFoundries Inc GFS, Broadcom, Micron, KLA Corp had the highest weightings.

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