According to the latest October active fund holdings data released by Bank of America (BofA), capital allocation in the U.S. semiconductor and electronic design automation (EDA) sector has shown significant divergence, with NVIDIA (NVDA.US) remaining the most widely held semiconductor stock among institutions. BofA analyst Vivek Arya's team noted that as of October, NVIDIA was held by 76% of U.S. active fund managers, marking a 219 basis point (bps) increase from the previous quarter and a 539 bps year-over-year rise, underscoring its reinforced dominance in the AI wave. NVIDIA's relative portfolio weighting stood at 1.11x, slightly above the median (1.06x) of the top 16 holdings in the technology and communication services sector.
In contrast, AMD, despite being one of the best-performing stocks in the Philadelphia Semiconductor Index (SOX.US) this year, remains under-owned by institutions. Only 24% of fund managers held AMD in October, up from 20% in July but still well below the 38% level seen in the same period of 2024. BofA highlighted that AMD's relative weighting in funds dropped sharply to 0.19x from 0.59x a year earlier. The bank maintained its "Buy" rating on AMD with a $300 price target, anticipating that the company’s upcoming Analyst Day on November 11 would provide updates on its total addressable market (TAM) for AI accelerators, serving as a potential catalyst.
Quarterly changes showed Synopsys (SNPS.US) and AMD as the fastest-growing holdings. Synopsys saw a 466 bps increase in ownership following its $35 billion acquisition of Ansys, while AMD rose 438 bps, buoyed by "key customer support." Conversely, Qualcomm (QCOM.US), ON Semiconductor (ON.US), and Microchip Technology (MCHP.US) faced the largest reductions, declining 356 bps, 192 bps, and 137 bps, respectively, reflecting weaker prospects in the analog and industrial semiconductor segments.
By ownership proportion, AMD, Teradyne (TER.US), and Intel (INTC.US) ranked top three, with quarterly increases of 43%, 34%, and 21%, respectively. Meanwhile, ON Semiconductor, Micron Technology (MU.US), and Qualcomm saw weightings drop by 32%, 17%, and 16%. Overall, the semiconductor sector's relative weighting in the S&P 500 stood at 0.96x, slightly lower than December 2023's 0.97x but higher than August 2024's 0.95x.
Separately, SoftBank Group sold its entire NVIDIA stake in October, realizing approximately $5.83 billion to expand AI investments, drawing further market attention. The news weighed on tech stocks, with NVIDIA down over 3.3%, Micron sliding more than 4%, and AMD falling over 1.6% at the time of reporting. Notably, this isn’t SoftBank’s first exit from NVIDIA—it fully divested in 2019 before repurchasing a small position in 2020 and increasing holdings to around $3 billion by March 2024. NVIDIA’s market cap surged over $2 trillion during the AI boom, contributing to SoftBank’s ¥2.5 trillion ($162 billion) net profit in Q2 FY2024, far exceeding expectations.