BofA Survey Shows Global Semiconductor Stocks Are the Most Crowded Trade on Record

Global fund managers remain bullish on artificial intelligence chip stocks, even as concern grows that the trade has become excessively crowded.

BlockBeats reported on July 17 that 82% of respondents in Bank of America’s July global fund manager survey identified global semiconductor stocks as the world’s most crowded trade. That was the highest reading on record.

The result does not mean investors are broadly betting on an immediate decline in chip stocks. Net overweight positions in technology shares fell to 18% from 26%, but the sector remained overweight. That suggests investors are trimming some long positions rather than shifting decisively into shorts.

The survey also showed that 61% of respondents do not expect hyperscale cloud companies to cut capital spending this year. That indicates many investors still do not believe the AI infrastructure investment cycle is over.

At the same time, concern about an AI bubble increased sharply. In BofA’s survey, the share of respondents who cited an AI bubble as the biggest tail risk rose to 45% in July from 28% in June.

BlockBeats said some investors see AI stocks as already in bubble territory, while more investors still view the sector as being in a boom phase that continues to attract inflows. Even so, crowded positioning and valuation pressure are both rising.

The survey was conducted from July 2 to July 9 and included 210 fund managers overseeing about $555 billion in assets.