Active fund managers are making large bets on six already high-performing stocks.
The Data: A post on X relayed data from Bank of America research.
Magnificent 5 + GLP-1 are overweight by active funds pic.twitter.com/JzyaTF9iFi
— Mike Zaccardi, CFA, CMT (@MikeZaccardi) June 26, 2024
Long-only active funds are overweight on the following companies relative to their weighting in the SPDR S&P 500 ETF Trust (NYSE:SPY): Microsoft Corp (NASDAQ:MSFT), NVIDIA Corp (NASDAQ:NVDA), Amazon.com Inc (NASDAQ:AMZN), Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL), Meta Platforms Inc (NASDAQ:META) and Eli Lilly And Co (NYSE:LLY).
All of the companies mentioned above are trading at or near all-time highs following historic rallies in 2023 and 2024. NVIDIA has added over $2 trillion in market cap in the past year while the already-large Microsoft, Eli Lilly and Alphabet saw enormous gains as well.
Around 90% of the active funds indexed by the chart currently own Microsoft. Meta and Eli Lilly (an outlier here among technology companies) are weighted nearly twice as much among active funds than the S&P 500.
Large bets on momentum plays indicate a continued confidence that Big Tech's rally has legs going into the remainder of 2024. Fund manager sentiment has reached relative highs in June on the back of artificial intelligence-related optimism.
Other experts have pumped the brakes on pervading bullish sentiment, describing "warning flags" pointing toward a "bubble-ish" market at risk of a substantial drawdown.
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