Nvidia is most-owned chip stock in active funds - but another is moving up fast

By Emily Bary

Broadcom continues to see its ownership grow

It's perhaps no surprise that the most-owned semiconductor stock among active fund managers is Nvidia Corp., according to data from BofA Equity Strategy.

But the data also reveal some more interesting tidbits, including the rapid growth in ownership of Broadcom Inc. shares (AVGO). Broadcom's stock was owned by 45.8% of active fund managers in the month of June, up from 44.9% in May - and just 28.7% in June 2023.

In June of last year, there were six semiconductor names with higher ownership than Broadcom shares. Now, Broadcom ranks second, ahead of Applied Materials Inc. (AMAT) and Advanced Micro Devices Inc. (AMD) shares.

Read: Why Broadcom's stock just got its most upbeat endorsement yet

Applied Materials itself made a move in June, assuming the third spot, with 39.5% ownership, which was up from 38.9% in May. By contrast, AMD ownership fellow to 39.3% from 40.3%.

Broadcom and Applied Materials saw the biggest quarter-over-quarter expansion in ownership, with Broadcom's rising to 45.8% from 41.7% and Applied Materials' increasing to 39.5% from 36.1%.

Still, BofA analysts led by Vivek Arya found that Nvidia (NVDA) and other highly-owned chip stocks are often underweight in funds relative to their weightings in the S&P 500 SPX. For example, while Nvidia was owned by 68.4% of active managers, it had a "relatively low" weighting of 0.99x in June, despite "confidence" in the company's long-term outlook, according to Arya. That's down from its 1.08x relative weighting a year before.

See also: Nvidia faces an ever-higher bar. How Morgan Stanley says to play its stock.

And while Broadcom looks to have a higher relative weighting at 1.68x, that number comes down to 0.58x when factoring out the company's largest shareholder, Arya said.

It's also worth a glimpse at some of the losers from the BofA data. ON Semiconductor Corp. (ON), Analog Devices Inc. (ADI) and Intel Corp. (INTC) saw their ownership percentages fall the most sequentially from the end of the first quarter, the analysts noted.

ON Semi's ownership was 8.8% in June relative to 12.1% in March. Analog Devices' ownership was 22.9% in June versus 24.9% in March. And Intel ownership fell to 13.6% form 14.5% over that period.

Opinion: Pat Gelsinger was brought in to fix Intel. 3 years later, it still seems like a mess.

-Emily Bary

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

07-02-24 1048ET

Copyright (c) 2024 Dow Jones & Company, Inc.