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

Bank of America data shows that active long-term funds reduced their holdings in global semiconductor stocks last month, selling approximately $44.4 billion worth, indicating that institutional funds are withdrawing from crowded AI trades. The flow of funds has shifted towards sectors such as telecommunications, energy, materials, and grid modernization, reflecting a trend of reallocation within the AI theme. This set of data explains part of the recent market pressure. Although the market still holds high expectations for AI demand, the significant rise in chip stocks and concentrated positions mean that the semiconductor sector will face pressure to reduce holdings if long-term interest rates rise or AI revenue expectations cool. Bank of America pointed out that the themes most sold by funds over the past year include AI computing and quantum computing, indicating that funds have not completely exited AI but are reducing exposure to highly crowded sectors. Bank of America expects that in the short term, chip stocks will be influenced by Nvidia's performance, guidance from cloud providers, and interest rate trends; in the medium term, funds may prefer to allocate to segments such as power, equipment, networks, and storage that can share in AI infrastructure spending.

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