Fund managers are heavily invested in semiconductors, with NVIDIA holding up to 67% and AMD at 35%.

Data Update: January 2024

Report Date: March 5, 2024

Source: BofA Securities Strategy Data (Percentage of holdings and changes by active fund managers in the United States)

Industry Overview

Semiconductor + EDA (Electronic Design Automation) stocks in the S&P 500 index as of the end of January 2024.

1. The relative weight of semiconductors decreased from 1.18 times in July 2023 to 1.09 times in January 2024 (a MoM decrease of 4%). It has been continuously decreasing monthly since January 2024 (a MoM decrease of 1%), still below its peak (1.36 times in March 2017).

2. NVIDIA maintains the highest proportion, held by 67% of fund managers, showing a continuous growth since June 2023 (a MoM increase of 30 basis points in January 2024), still at a historical high. Despite a relative weight of 1.01 times, lower than the average level of the top 16 peers in IT/communication services (1.13 times), its sales growth prospects are more than 9 times that of its peers (68% compound annual growth rate compared to peers' 8%), according to consensus.

3. The largest quarterly holdings growth are AVGO, MU, AMAT, INTC, NVDA, and CDNS, while the largest quarterly declines are MCHP, FSLR, ENPH, NXPI, AMD, QCOM, and KLAC.

4. The largest growth in deep/overweight positions are in INTC, ON, and AMD, while the largest weight declines are in FSLR, QRVO, TER, AMAT, and QCOM.

5. Pure stock funds (LO) are most overweight on MCHP, ON, ENPH, MPWR, AVGO, TXN, and NXPI, while hedge funds (HF) are most overweight on AMD, TER, SWKS, MU, CDNS, and QRVO.

Stocks that are overweight in both LO and HF: INTC, AMAT, KLAC, NVDA, ADI, SNPS, LRCX.

Top Six Semiconductor Companies in the S&P 500 Index

1. NVDA (67% of fund managers, quarterly growth of 176 basis points, annual growth of 880 basis points)

2. AVGO (40.8%, quarterly growth of 417 basis points, annual growth of 1473 basis points)

3. AMD (35.2%, quarterly decline of 145 basis points, annual growth of 119 basis points)

4. AMAT (35.2%, quarterly growth of 207 basis points, annual growth of 617 basis points)

5. LRCX (31.4%, quarterly decline of 2 basis points, annual growth of 145 basis points)

6. TXN (28.4%, quarterly decline of 4 basis points, annual decline of 767 basis points)

The median is 22.2%:

On the other hand, the most overweight chip stocks in the S&P 500 index include:

1. KLAC (overweight by 1.81 times relative to the S&P 500 index weight),

2. AVGO (1.7 times),

3. SNPS (1.55 times),

4. NXPI (1.34 times),

5. MU (1.34 times).

The least overweight compared to the S&P 500 index are QRVO, SWKS, QCOM, and TER. It is worth noting that although there is confidence in the long-term growth prospects of NVDA, the stock's weight is relatively low at 1.01 times, lower than the 1.03 times mentioned in the last update (November 2023) and 1.02 times in December 2023. AMD (the third largest holding) remains relatively underweight, increasing from 0.68 times in November 2023 to 0.77 times.

NVIDIA ranks fourth in the proportion of holdings in US stock funds

The top three are Microsoft, Apple, and Visa.