Bank of America released the latest data on active fund holdings for October. NVIDIA Corporation (NVDA.US) remains a favorite among institutions.

Bank of America Corp(BofA) released its latest October active fund holdings data, showing a significant divergence in fund allocation in the US chip and electronic design automation (EDA) sectors. NVIDIA Corporation (NVDA.US) remains the most widely held semiconductor stock among institutions. BofA analyst Vivek Arya's team pointed out that as of October, NVIDIA Corporation was held by 76% of US active funds, an increase of 219 basis points from the previous quarter and 539 basis points year-on-year, demonstrating its further consolidation of a leading position in the AI wave. NVIDIA Corporation's relative weight in portfolios is 1.11 times, slightly higher than the median of other top 16 holdings in the technology and communication services sectors (1.06 times). In contrast, although AMD is one of the standout stocks in the Philadelphia Semiconductor Index (SOX.US) in terms of performance this year, institutional holdings remain inadequate. Only 24% of fund managers held AMD in October, a slight increase from 20% in July, but still far below the 38% held in the same period last year. BofA pointed out that AMD's relative weight in funds is only 0.19 times, a significant decrease from 0.59 times in the same period last year. BofA maintains a "buy" rating on AMD with a target price of $300 and expects the company to update the overall addressable market size (TAM) of its AI accelerator market on Analyst Day on November 11, which could serve as a catalyst. In terms of quarterly changes, Synopsys (SNPS.US) and AMD were the fastest growing holdings. Synopsys saw a 466 basis point increase in holdings due to the completion of the $35 billion acquisition of Ansys; AMD increased by 438 basis points, boosted by "key customer support." On the other hand, Qualcomm (QCOM.US), ON Semiconductor Corporation (ON.US), and Microchip Technology Incorporated (MCHP.US) recorded the largest reductions in holdings, with decreases of 356, 192, and 137 basis points respectively, reflecting weakening prospects in the analog and industrial semiconductor sectors. In terms of holdings, AMD, Teradyne (TER.US), and Intel Corporation (INTC.US) ranked in the top three, with quarterly increases of 43%, 34%, and 21%. Meanwhile, the weights of ON Semiconductor Corporation, Micron Technology, Inc. (MU.US), and Qualcomm decreased by 32%, 17%, and 16% respectively. Overall, the relative weight of the semiconductor sector in the S&P 500 is 0.96 times, slightly lower than 0.97 times in December last year, but higher than 0.95 times in August this year. Meanwhile, in October, SoftBank Group of Japan sold all of its NVIDIA Corporation shares, cashing in approximately $5.83 billion to expand its investments in the AI field, further grabbing market attention. As a result of this news, tech stocks in general softened on Tuesday, with NVIDIA Corporation falling over 3.3%, Micron Technology, Inc. falling over 4%, and AMD falling over 1.6% at the time of writing. It is worth noting that this is not SoftBank's first exit from NVIDIA Corporation. The company had previously cleared its holdings in 2019, reacquired a small amount of shares in 2020, and increased its holdings to around $3 billion by the end of March 2024. Riding on this wave of AI excitement, NVIDIA Corporation's market value soared by over $2 trillion in two years, helping SoftBank report a net profit of 2.5 trillion yen (approximately $16.2 billion) in the second quarter, far exceeding market expectations.