Fund managers’ love for artificial intelligence-related stocks has grown as many of these tech companies have become their essential holdings in the portfolio, according to Bank of America’s analysis. The Wall Street firm looked at the holdings of U.S. large-cap equity mutual funds that are actively managed. It screened the S & P 500 for stocks that saw the largest increase in ownership breadth over the past 12 months, measured by the percent of funds owning each name. Bank of America found that 9 of 10 stocks on its list are tied to the AI boom. The exception is Eli Lilly , which has been benefiting from the rise of weight loss drugs. “What are your neighbors doing? Buying AI,” Bank of America strategists led by Savita Subramanian said in a note. “AI stocks are now core holdings.” Broadcom saw the biggest increase in fund ownership over the past year, with 45% of active managers holding the stock as of April. The chipmaker issued a rosy guidance in March, saying it expects $10 billion in revenue from AI chips this year. Other chipmakers that made the list are Arista Networks , Applied Materials and Nvidia. Nvidia has been a clear winner in the AI space with shares doubling again in 2024. In the past year, Nvidia sales have skyrocketed as companies such as OpenAI and Microsoft buy billions of dollars of its graphics processing units. Meta Platforms , Uber Technologies , Netflix and ServiceNow also experienced a rise in popularity among active fund managers, according to Bank of America. The Wall Street firm said the change in fund managers’ ownership has been positively correlated with the number of “AI” mentions on earnings calls.
