Hedge Funds Shift Focus to Semiconductor Stocks
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 43 minutes ago
0mins
Source: CNBC
- Investment Trend Shift: According to Goldman Sachs, the weight of semiconductor stocks in hedge fund long portfolios has reached an all-time high, while the weight of software stocks has dropped to its lowest since 2019, indicating strong market confidence in the semiconductor sector.
- Popular Stock Additions: Hedge funds have increased their positions in semiconductor stocks such as Lam Research Corp, Applied Materials Inc, and ASML Holding, while mutual funds have added Intel Corp and SiTime Corp, reflecting a shift in capital towards technology hardware.
- Strong Shared Holdings Performance: Goldman noted that stocks like Boeing Co., Mastercard Inc., Marvell Technology Inc., and Visa Inc. have emerged as popular holdings in both hedge fund and mutual fund portfolios, outperforming the S&P 500 by 3 percentage points with a year-to-date return of 10%.
- Cash Allocation Adjustments: Despite mutual funds raising cash allocations amid rising geopolitical tensions from a record low of 1.1% at the start of 2026 to 1.4% at the beginning of April, cash balances as a share of assets remain extremely low relative to historical levels, reflecting market uncertainty.
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Analyst Views on ASML
Wall Street analysts forecast ASML stock price to fall
12 Analyst Rating
12 Buy
0 Hold
0 Sell
Strong Buy
Current: 1592.000
Low
1385
Averages
1583
High
1911
Current: 1592.000
Low
1385
Averages
1583
High
1911
About ASML
ASML Holding N.V. is a holding company based in the Netherlands. The Company operates through its subsidiaries in the Netherlands, the United States, Italy, France, Germany, the United Kingdom, Ireland, Belgium, South Korea, Taiwan, Singapore, China, Hong Kong, Japan, Malaysia and Israel. The Company operates through one business segment which is engage in development, production, marketing, sales, upgrading and servicing of advanced semiconductor equipment systems, consisting of lithography, metrology and inspection systems. The Company offers TWINSCAN systems, equipped with lithography system with a mercury lamp as light source (i-line), Krypton Fluoride (KrF) and Argon Fluoride (ArF) light sources for processing wafers for manufacturing environments for which imaging at a small resolution is required. TWINSCAN systems also include immersion lithography systems (TWINSCAN immersion systems).
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Alphabet's Full-Stack Advantage: Alphabet boasts significant dominance across multiple markets, generating $60.4 billion in search revenue in Q1 2026, a 19% year-over-year increase, and its robust financial position with $64.4 billion in free cash flow provides a buffer against future market fluctuations.
- ASML's Unique Technology: ASML commands nearly 100% of the extreme ultraviolet (EUV) lithography market, reporting net sales of €8.8 billion in Q1 2026, and despite a decline from the previous quarter, it raised its full-year sales forecast to between €36 billion and €40 billion, underscoring its critical role in semiconductor production.
- Long-Term Investment Confidence: The competitive moats of Broadcom, Alphabet, and ASML instill investor confidence during market volatility, as historical performance indicates these companies can maintain strong results even in economic downturns.
See More
Long-Term Investment Opportunities in AI Stocks
- Market Leadership: Broadcom holds approximately 70% of the custom AI accelerator market, with AI revenue soaring 106% to $8.4 billion in Q1 2026, demonstrating its strong market position amid rising demand for AI infrastructure.
- Financial Resilience: Alphabet generated $60.4 billion in revenue in Q1 2026, a 19% year-over-year increase, and boasts $64.4 billion in free cash flow, showcasing its financial strength and capacity for sustained investment during market fluctuations.
- Technological Barriers: ASML commands nearly 100% of the extreme ultraviolet (EUV) lithography market, with its latest High NA machines costing over $400 million each, highlighting its irreplaceable role and high technical barriers in semiconductor manufacturing.
- Future Growth Outlook: ASML raised its full-year net sales projection to between €36 billion and €40 billion for 2026, with the midpoint reflecting a 16% increase from 2025, indicating ongoing demand and market potential in high-end chip production.
See More
Hedge Funds Shift Focus to Semiconductor Stocks
- Investment Trend Shift: According to Goldman Sachs, the weight of semiconductor stocks in hedge fund long portfolios has reached an all-time high, while the weight of software stocks has dropped to its lowest since 2019, indicating strong market confidence in the semiconductor sector.
- Popular Stock Additions: Hedge funds have increased their positions in semiconductor stocks such as Lam Research Corp, Applied Materials Inc, and ASML Holding, while mutual funds have added Intel Corp and SiTime Corp, reflecting a shift in capital towards technology hardware.
- Strong Shared Holdings Performance: Goldman noted that stocks like Boeing Co., Mastercard Inc., Marvell Technology Inc., and Visa Inc. have emerged as popular holdings in both hedge fund and mutual fund portfolios, outperforming the S&P 500 by 3 percentage points with a year-to-date return of 10%.
- Cash Allocation Adjustments: Despite mutual funds raising cash allocations amid rising geopolitical tensions from a record low of 1.1% at the start of 2026 to 1.4% at the beginning of April, cash balances as a share of assets remain extremely low relative to historical levels, reflecting market uncertainty.
See More
Huawei Unveils New Semiconductor Technology Amid Sanctions
- Technological Breakthrough: Huawei announced the development of a new engineering method called 'Logic Folding' aimed for its Kirin smartphone chips in fall 2026, which will help maintain competitiveness in the global semiconductor market despite U.S. sanctions.
- Market Share Recovery: The launch of Huawei's Mate 60 smartphone in 2023, featuring advanced 5G connectivity, has successfully regained market share from Apple, demonstrating strong recovery capabilities in the Chinese market.
- Future Development Goals: Huawei anticipates that by 2031, its new chip technology could achieve capabilities equivalent to 1.4-nanometer processes, although industry experts express skepticism regarding the feasibility of this target, citing unresolved manufacturing challenges.
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- Geopolitical Impact: Should the agreement be reached, it would help ensure the safety of shipping through the Strait of Hormuz, thereby stabilizing global oil supply chains and reducing the risk of price volatility.
- Negotiation Dynamics: Trump's remarks indicate an active U.S. government stance in addressing tensions in the Middle East, which could influence international investor confidence in the region.
- Market Reaction Expectations: The market may respond positively to this news, with investors closely monitoring subsequent negotiation developments to assess potential impacts on the energy market.
See More
Laffont Cuts Cloud Stakes, Increases Semiconductor Holdings
- Portfolio Adjustment: Billionaire investor Philippe Laffont of Coatue Management significantly reduced his stakes in major cloud providers like Amazon, Alphabet, and Microsoft in Q1, while completely exiting Oracle, indicating a reassessment of the cloud computing sector.
- Increased Semiconductor Investment: Laffont boosted his stake in Taiwan Semiconductor Manufacturing Co. (TSMC), making it his top holding, and initiated a new position in ASML Holding, reflecting his optimism towards semiconductor infrastructure, particularly amid the rapid growth of AI infrastructure.
- Market Position of TSMC: As the world's largest foundry, TSMC holds a near-monopoly in manufacturing logic chips due to its high yields and advanced packaging technology, and it is expected to enhance its strong pricing power and margins through planned multiyear price hikes.
- Technological Edge of ASML: ASML monopolizes extreme ultraviolet (EUV) lithography, and as demand for advanced logic chips rises, TSMC and other foundries will increasingly require ASML's machines, thereby solidifying ASML's foundation for future growth.
See More
Three AI Stocks with Market Dominance
- Broadcom's Market Leadership: Broadcom holds approximately 70% of the custom AI accelerator market, with AI revenue soaring 106% to $8.4 billion in Q1 2026, while total net revenue increased by 29% to $19.3 billion, reflecting its strong performance amid rising AI infrastructure demand.
- Alphabet's Full-Stack Advantage: Alphabet boasts significant dominance across multiple markets, generating $60.4 billion in search revenue in Q1 2026, a 19% year-over-year increase, and its robust financial position with $64.4 billion in free cash flow provides a buffer against future market fluctuations.
- ASML's Unique Technology: ASML commands nearly 100% of the extreme ultraviolet (EUV) lithography market, reporting net sales of €8.8 billion in Q1 2026, and despite a decline from the previous quarter, it raised its full-year sales forecast to between €36 billion and €40 billion, underscoring its critical role in semiconductor production.
- Long-Term Investment Confidence: The competitive moats of Broadcom, Alphabet, and ASML instill investor confidence during market volatility, as historical performance indicates these companies can maintain strong results even in economic downturns.
See More
Long-Term Investment Opportunities in AI Stocks
- Market Leadership: Broadcom holds approximately 70% of the custom AI accelerator market, with AI revenue soaring 106% to $8.4 billion in Q1 2026, demonstrating its strong market position amid rising demand for AI infrastructure.
- Financial Resilience: Alphabet generated $60.4 billion in revenue in Q1 2026, a 19% year-over-year increase, and boasts $64.4 billion in free cash flow, showcasing its financial strength and capacity for sustained investment during market fluctuations.
- Technological Barriers: ASML commands nearly 100% of the extreme ultraviolet (EUV) lithography market, with its latest High NA machines costing over $400 million each, highlighting its irreplaceable role and high technical barriers in semiconductor manufacturing.
- Future Growth Outlook: ASML raised its full-year net sales projection to between €36 billion and €40 billion for 2026, with the midpoint reflecting a 16% increase from 2025, indicating ongoing demand and market potential in high-end chip production.
See More
Hedge Funds Shift Focus to Semiconductor Stocks
- Investment Trend Shift: According to Goldman Sachs, the weight of semiconductor stocks in hedge fund long portfolios has reached an all-time high, while the weight of software stocks has dropped to its lowest since 2019, indicating strong market confidence in the semiconductor sector.
- Popular Stock Additions: Hedge funds have increased their positions in semiconductor stocks such as Lam Research Corp, Applied Materials Inc, and ASML Holding, while mutual funds have added Intel Corp and SiTime Corp, reflecting a shift in capital towards technology hardware.
- Strong Shared Holdings Performance: Goldman noted that stocks like Boeing Co., Mastercard Inc., Marvell Technology Inc., and Visa Inc. have emerged as popular holdings in both hedge fund and mutual fund portfolios, outperforming the S&P 500 by 3 percentage points with a year-to-date return of 10%.
- Cash Allocation Adjustments: Despite mutual funds raising cash allocations amid rising geopolitical tensions from a record low of 1.1% at the start of 2026 to 1.4% at the beginning of April, cash balances as a share of assets remain extremely low relative to historical levels, reflecting market uncertainty.
See More
Huawei Unveils New Semiconductor Technology Amid Sanctions
- Technological Breakthrough: Huawei announced the development of a new engineering method called 'Logic Folding' aimed for its Kirin smartphone chips in fall 2026, which will help maintain competitiveness in the global semiconductor market despite U.S. sanctions.
- Market Share Recovery: The launch of Huawei's Mate 60 smartphone in 2023, featuring advanced 5G connectivity, has successfully regained market share from Apple, demonstrating strong recovery capabilities in the Chinese market.
- Future Development Goals: Huawei anticipates that by 2031, its new chip technology could achieve capabilities equivalent to 1.4-nanometer processes, although industry experts express skepticism regarding the feasibility of this target, citing unresolved manufacturing challenges.
- Pursuit of Academic Recognition: Over the past six years, Huawei has designed and mass-produced 381 chips based on the 'τ Scaling Law', aiming to enhance semiconductor technology through new system optimization principles, despite ongoing challenges in heat management and large-scale manufacturing.
See More
Trump Claims Interim Agreement on Strait of Hormuz is Close
- Agreement Progress: President Trump stated that an interim agreement regarding the Strait of Hormuz is close to being finalized, although negotiations are still ongoing, which may alleviate market concerns over geopolitical tensions in the region.
- Geopolitical Impact: Should the agreement be reached, it would help ensure the safety of shipping through the Strait of Hormuz, thereby stabilizing global oil supply chains and reducing the risk of price volatility.
- Negotiation Dynamics: Trump's remarks indicate an active U.S. government stance in addressing tensions in the Middle East, which could influence international investor confidence in the region.
- Market Reaction Expectations: The market may respond positively to this news, with investors closely monitoring subsequent negotiation developments to assess potential impacts on the energy market.
See More
Laffont Cuts Cloud Stakes, Increases Semiconductor Holdings
- Portfolio Adjustment: Billionaire investor Philippe Laffont of Coatue Management significantly reduced his stakes in major cloud providers like Amazon, Alphabet, and Microsoft in Q1, while completely exiting Oracle, indicating a reassessment of the cloud computing sector.
- Increased Semiconductor Investment: Laffont boosted his stake in Taiwan Semiconductor Manufacturing Co. (TSMC), making it his top holding, and initiated a new position in ASML Holding, reflecting his optimism towards semiconductor infrastructure, particularly amid the rapid growth of AI infrastructure.
- Market Position of TSMC: As the world's largest foundry, TSMC holds a near-monopoly in manufacturing logic chips due to its high yields and advanced packaging technology, and it is expected to enhance its strong pricing power and margins through planned multiyear price hikes.
- Technological Edge of ASML: ASML monopolizes extreme ultraviolet (EUV) lithography, and as demand for advanced logic chips rises, TSMC and other foundries will increasingly require ASML's machines, thereby solidifying ASML's foundation for future growth.
See More
