Bank of America said active long-only funds sold about $44.4 billion worth of global semiconductor stocks last month, pointing to a pullback from what it described as one of the most crowded artificial intelligence trades. The bank said capital was moving instead toward telecom, energy, materials and grid modernization, suggesting a clearer redistribution is taking shape within the broader AI theme.
According to BofA, the data helps explain part of the recent pressure seen in the market. Ahead of Nvidia’s earnings, expectations for AI demand remain high, but chip stocks had already posted large gains and positioning had become concentrated. The bank said semiconductor names would be the first to face selling pressure if long-end yields rise, if AI revenue expectations cool, or if investors begin to question returns on cloud providers’ capital spending.
BofA also said the themes seeing the most selling by funds over the past year included AI computing and quantum computing. In its view, that does not mean money has fully exited AI. Instead, investors are reducing exposure to the most crowded segments, while medium-term allocations may shift toward power, equipment, networking and storage, areas linked to AI infrastructure spending.
Bank of America data showed that active long-only funds sharply cut global semiconductor holdings last month, selling about $44.4 billion worth of chip stocks, according to a BlockBeats report published on Aug. 25.
The bank said the move signaled that institutional capital was pulling back from one of the most crowded AI trades. Flows were redirected toward telecom, energy, materials and grid modernization, indicating a more visible redistribution is taking place within the AI theme itself.
Pressure in chip stocks
BofA said the data helps explain part of the recent pressure in the market. Ahead of Nvidia earnings, expectations for AI demand remain elevated, but semiconductor shares had already risen significantly and positioning was more concentrated.
The bank said chip stocks would be first in line for position cuts if long-end interest rates move higher, if expectations for AI-related revenue cool, or if returns on cloud providers’ capital spending come under question.
Rotation within AI-linked trades
BofA also said the themes with the heaviest fund selling over the past year included AI computing and quantum computing. In the bank’s view, that shows money has not fully left AI, but is instead reducing exposure to crowded segments.
For the near term, BofA expects semiconductor stocks to keep tracking Nvidia’s results, guidance from cloud providers and the direction of interest rates. Over the medium term, it said capital may show a stronger preference for subsectors such as power, equipment, networking and storage, which can benefit from AI infrastructure spending.
This article was originally published by Bit.Fan. For more cryptocurrency news and market insights, visit www.bit.fan. Disclaimer:
The market information, project data, and third-party content displayed on this platform are for industry information sharing only and do not constitute any form of investment advice or return commitment.
Cryptocurrency trading carries high risks. Users should fully assess their risk tolerance and make independent decisions. All profits, losses, and legal responsibilities are borne by the users themselves.
