Active long-term funds sold $44.4 billion in semiconductor stocks last month.

ChainCatcher report: On August 25, Bank of America data showed that active long-only funds significantly reduced their holdings in global semiconductor stocks last month, selling approximately $44.4 billion, indicating institutional capital is withdrawing from the most crowded AI-related trades. Capital flows have shifted toward telecommunications, energy, materials, and grid modernization, reflecting a clearer reallocation within the AI theme. This data helps explain part of the recent market pressure. Ahead of NVIDIA’s earnings report, market expectations for AI demand remain high, but semiconductor stocks had previously risen sharply and become overly concentrated in positioning. Should long-term interest rates rise, AI revenue expectations cool, or cloud providers’ capital expenditure returns come into question, the semiconductor sector will likely face the first wave of selling pressure. Bank of America also noted that over the past year, the most heavily sold themes by funds included AI computing and quantum computing, suggesting capital has not fully exited AI but is reducing exposure to over-crowded segments. Bank of America expects semiconductor stocks to remain sensitive in the short term to NVIDIA’s earnings, cloud provider guidance, and interest rate trends; over the medium term, capital may increasingly favor sub-sectors such as power, equipment, networking, and storage that can benefit from AI infrastructure spending.