Andrei Berezovskii/iStock Editorial via Getty Images
The semiconductor industry was in the spotlight on Tuesday as Bank of America noted that recent data showed relative weighting for the industry continued to decline amongst active manager, despite the strong performance for the sector year-to-date.
The relative weighting fell 9% quarter-over-quarter to 0.99x and has consistently fallen from June 2023 levels, when it was 1.16x and below the March 2017 peak of 1.36x, the investment firm said.
Despite the declines in relative weighting, Nvidia (NASDAQ:NVDA) still has the broadest ownership, owned by 68% of fund managers, up 830 basis points year-over-year. That’s still a historical peak, the investment firm said, and up 10 basis points quarter-over-quarter, indicating that fund managers are still adding the semiconductor giant to their portfolios.
The greatest quarter-over-quarter expansion in exposure was seen in Broadcom (AVGO), Applied Materials (AMAT), Micron (NASDAQ:MU), Cadence Design Systems (CDNS) and Qualcomm (NASDAQ:QCOM), while On Semiconductor (ON), Analog Devices (ADI) and Intel (INTC) saw the greatest declines.
The greatest increase quarter-over-quarter in depth and overweighting belong to Synopsys (SNPS), Teradyne (TER), Cadence Design Systems and Texas Instruments (TXN), while Qorvo (QRVO), Microchip Technology (MCHP), On Semiconductor and Intel saw the greatest decline in weighting.
Long-only investors were the most overweight in Microchip Technology, On Semiconductor, Texas Instruments, KLA Corp. (KLAC) and Synopsys. Conversely, hedge funds were the most overweight Teradyne, Qualcomm, Lam Research, Micron, Cadence Design Systems. and Qorvo.
Nvidia is still the most widely owned semiconductor in the S&P 500, followed by Broadcom (45.8%), Applied Materials (39.5%), AMD (39.3%), Lam Research (32.8%) and Texas Instruments (28.5%). All six saw increases quarter-over-quarter, though AMD and Texas Instruments saw declines in ownership year-over-year.
Semiconductor stocks in the S&P 500 that are the most overweight in portfolios include Synopsys (1.77x compared to its weight in the index), KLA Corp. (1.71x), Broadcom (1.68x), Micron (1.35x) and Cadence Design Systems (1.32x).
Qualcomm, Qorvo, Skyworks Solutions (SWKS) and Teradyne were the least overweight compared to its weight in the index.