A major fund manager has significantly increased positions in Nvidia and SK Hynix while reducing exposure to software companies, according to a report by MarketWatch.
The portfolio adjustments highlight a growing institutional preference for the hardware layer of the artificial intelligence infrastructure build-out over the application layer.
The manager’s strategy centers on the principle of following capital flows, suggesting that the most immediate value in the AI boom is being captured by chipmakers and memory suppliers rather than software developers.
This rotation reflects a broader market sentiment that prioritizes tangible capacity constraints and supply-chain bottlenecks over speculative software valuations.
Nvidia and SK Hynix are central to this hardware-focused thesis.
Nvidia remains the dominant supplier of AI accelerators, while SK Hynix is a key provider of high-bandwidth memory (HBM) required for next-generation data centers.