Bank of America: Active Long-Only Funds Sold Off $44.4 Billion in Semiconductor Stocks Last Month

BlockBeats News, August 25th. According to Bank of America data, actively managed long funds significantly reduced their holdings of global semiconductor stocks last month, with sales totaling around $44.4 billion. This indicates that institutional funds are exiting from the most crowded AI trades. Fund flows are shifting towards sectors such as telecom, energy, materials, and grid modernization, reflecting a more pronounced reallocation within the AI theme.

This data partly explains some of the recent pressures in the market. Prior to NVIDIA's earnings report, the market had high expectations for AI demand, but semiconductor stocks had previously risen too sharply, with positions more concentrated. Once long-term interest rates rise, AI revenue expectations cool down, or cloud vendor capital expenditure returns are questioned, the semiconductor sector will be the first to face selling pressure. Bank of America also pointed out that the themes with the most selling by funds in the past year include AI computing and quantum computing, indicating that funds have not completely exited AI but are reducing exposure to highly crowded tracks.

Bank of America expects that in the short term, semiconductor stocks will continue to be influenced by NVIDIA's performance, cloud vendor guidance, and interest rate trends; in the medium term, funds may be more willing to allocate to sub-sectors such as power, equipment, networking, and storage that can benefit from AI infrastructure spending.