More than half of global fund managers still see long semis as the most consensus position, even as conviction quietly fades from summer highs.
For the fourth consecutive month, global fund managers have named long semiconductors as the single most crowded trade in markets. Bank of America’s Global Fund Manager Survey, a closely watched barometer of institutional sentiment, shows that 53% of respondents flagged the position in September, unchanged from August.
That number sounds dominant until you look at where it was two months ago. In July, 82% of surveyed managers called long semis the most crowded trade. The drop from 82% to 53% in the span of two months tells a story of conviction slowly leaking out of the room, even as no one is willing to actually leave.
The anatomy of a crowded trade
The semiconductor trade didn’t become the consensus overnight. In April 2026, roughly 25% of fund managers identified it as the most crowded position. By May, that figure had nearly tripled to 73%. It hit 80% in June before peaking at 82% in July.
The June survey drew responses from 198 managers overseeing $540 billion in assets. July’s edition was slightly larger, with 210 managers representing $555 billion.
The underlying catalyst is familiar: AI-driven chip demand from the likes of Nvidia, AMD, and Taiwan Semiconductor has turned the semiconductor sector into the defining trade of the current cycle. The iShares Semiconductor ETF, known by its ticker SMH, had gained 99% year-to-date as of mid-June 2026. The Philadelphia Semiconductor Index notched multiple all-time highs during the same period.
Frozen bulls and the AI bubble question
The term that has emerged to describe current positioning is “frozen bulls,” managers who believe valuations are stretched but remain unwilling to reduce their exposure.
In June, 28% of fund managers identified an AI bubble as a top tail risk. That figure jumped to 45% in July, making it one of the fastest-rising concerns in recent survey history.
By September, AI bubble fears were overtaken by anxieties about rising bond yields.
Net overweight positioning in technology stocks fell to 18% as of July. That’s a notable pullback from prior months, though managers remained net long the sector.
What the sentiment shift actually means
The decline from 82% to 53% on the crowded trade metric deserves careful interpretation. It does not mean that half the fund management industry suddenly turned bearish on semiconductors. It means that fewer managers consider the trade to be the single most consensus position in the market.
The semiconductor trade went from being a growing consensus in April to near-universal agreement in July to a position where conviction is fragmenting in September. The trade remains number one, but it’s a weaker number one.
Higher yields increase the discount rate applied to future earnings, which hits long-duration growth stocks, like semiconductor companies, disproportionately hard.
