The majority of active managers tracked by BofA have Nvidia positions — but the stock’s relative weighting in funds is still not aggressive, which could come as some relief
Nvidia Corp. gets plenty of love on Wall Street, but by one measure, big investors still aren’t overly bullish on the semiconductor name.
BofA Global Research analyst Vivek Arya and his team recently took his quarterly look at semiconductor-stock ownership among active managers. It found that while Nvidia NVDA1.68% is the most owned semiconductor stock, it’s still ”relatively underweight.”
Given all the attention around Nvidia lately, it may seem that the stock is highly popular among fund managers to the point where some would need to trim their exposure as the price goes up and creates risk for the stock. But there are actually numerous other large technology names that have higher exposure in funds relative to their respective weightings in the S&P 500 SPX 0.90%.
Nvidia has a 0.99x relative weighting, the BofA analysts noted, which is “well below” the top-16-owned peers in the information-technology and communication-services sectors. That’s even as Nvidia has the potential to grow sales more than five times faster.
The relative weighting for Nvidia has come down since BofA last looked at semiconductor ownership three months back and deemed Nvidia’s relative weight to be 1.04x as of the end of June.
Among the names with higher relative weightings than Nvidia: Meta Platforms Inc. META 2.26%, Salesforce Inc. CRM 2.43%, Microsoft Corp. MSFT-0.12% and Alphabet Inc. GOOG0.81% GOOGL0.72%
Within semiconductors, Applied Materials Inc. AMAT1.19%, KLA Corp. KLAC1.66% and Micron Technology Inc. MU0.42% are among a number of names with higher relative weightings. But the highest-owned chip stocks are relative underweights, the analysts wrote, mentioning Broadcom Inc. AVGO2.76% as another example. Broadcom has a 1.54x relative weighting on paper, but when excluding its largest shareholder, that relative weighing amounts to just 0.7x.
Nvidia and Broadcom are still the most owned semiconductor names, by far, when looking at the number of funds that own specific names. Nvidia has about 70% ownership, while Broadcom is at 52% and Advanced Micro Devices Inc. AMD4.94% is near 39%.
The BofA team conducted its analysis earlier this week. Nvidia shares eked out a small positive gain Monday before falling 3.7% in Tuesday action and then getting back on better footing in the following two sessions. The stock was up 2.8% toward the end of Thursday’s trading day, after rising 1.6% in Wednesday’s action.