NVIDIA Corp NVDA is still the undisputed monarch of hedge fund portfolios, but second-quarter filings show a new challenger climbing the stairs to the throne: Lam Research Corp LRCX.
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According to WhaleScore's 13F heat map, while Nvidia remained the most widely held and highest-conviction artificial intelligence name among institutional investors, a silent underdog has been gaining hedge fund confidence.
Nvidia’s GPUs are still the lifeblood of generative AI data centers. But the real story is Lam Research, which surged up the rankings for the information technology sector for the second quarter this year. Per the map, Lam Research was the second “hottest” stock among 13F filers for the second quarter, behind only Nu Holdings Ltd NU.
Nvidia? Well, it trailed behind at rank 13!
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Why Lam? Hedge funds appear to be betting not just on the AI chips themselves, but the machinery needed to produce them at scale.
With demand for cutting-edge 3nm and 2nm nodes soaring, Lam's etching and deposition tools are critical for chipmakers like Taiwan Semiconductor Manufacturing Co Ltd TSM and Samsung Electronics Co., Ltd SSNLF. That positions Lam research as an essential "picks and shovels" play in the AI gold rush.
Meanwhile, Advanced Micro Devices Inc AMD, at rank 9, and Qualcomm Inc QCOM, at rank 16, slipped lower in the rankings, suggesting hedge funds are less enthusiastic about chip designers that lack Nvidia's dominance or Lam's equipment moat. KLA Corp KLAC, at rank 12, also made strides, reinforcing the institutional tilt toward semiconductor equipment.
While Nvidia is still the crown jewel, hedge funds are broadening exposure down the AI supply chain. If Lam Research's momentum continues, it may signal a new phase in the trade — from chasing the AI leader to building a diversified semiconductor ecosystem bet.
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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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