Nvidia, Broadcom Lead Fund Manager Buys Even As Semiconductor Sector Cools: Analysts

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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