For the fourth consecutive month, fund managers surveyed by Bank of America named long semiconductor positions as the most crowded trade in markets, with 53% of respondents in September, unchanged from August. This apparent dominance masks a sharp decline in conviction since summer, as the rate fell to 53% from 82% in July, its all-time high. Interest in semiconductors grew rapidly, rising from 25% in April to 73% in May, then 80% in June before peaking at 82%. AI-driven chip demand, driven by companies like Nvidia, AMD, and Taiwan Semiconductor, remains the underlying catalyst. Rising bond yields pose risks for long-duration growth stocks like semiconductors.
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