Welcome to Extreme Investor Network, where we provide you with the latest insights and trends in the world of investing. Today, we’re diving into the growing love that fund managers have for artificial intelligence-related stocks.
According to a recent analysis by Bank of America, many tech companies focused on AI have become essential holdings in the portfolios of actively managed U.S. large-cap equity mutual funds. The analysis looked at the S&P 500 to identify stocks that saw the largest increase in ownership breadth over the past year, measured by the percentage of funds owning each name. Surprisingly, 9 out of the top 10 stocks on the list are tied to the AI boom.
One standout on the list is Broadcom, which saw the biggest increase in fund ownership, with 45% of active managers holding the stock as of April. The chipmaker issued optimistic guidance, expecting $10 billion in revenue from AI chips this year. Other notable chipmakers on the list include Arista Networks, Applied Materials, and the clear AI winner, Nvidia. Nvidia’s shares have doubled in the past year, fueled by increasing sales to companies like OpenAI and Microsoft.
But it’s not just chipmakers benefiting from the AI trend. Companies like Meta Platforms, Uber Technologies, Netflix, and ServiceNow have also seen a rise in popularity among active fund managers. Bank of America noted that the change in fund managers’ ownership has been positively correlated with the number of “AI” mentions on earnings calls.
As you can see, the AI revolution is in full swing, and fund managers are taking notice of the potential for growth in this sector. Stay tuned to Extreme Investor Network for more insights and analysis on investing in the ever-evolving world of artificial intelligence-related stocks.