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• Institutional investors increased holdings in AI infrastructure, semiconductor, data centre and utility companies during the first quarter of 2026, according to SEC filings reviewed by Reuters.
• Companies such as Oracle, Arista Networks, Vertiv and Digital Realty saw strong institutional buying activity.
• Investors remained cautious on major technology firms within the “Magnificent Seven” group, including Meta and Microsoft, amid concerns over AI spending and growth sustainability.
• The software-as-a-service sector witnessed net selling pressure as investors assessed the possible impact of AI on traditional business models and profitability.
• Semiconductor stocks continued to attract strong investor interest, with more than 4,100 institutions either increasing holdings or initiating fresh positions during the quarter.
Institutional investors significantly increased their holdings in companies linked to artificial intelligence infrastructure during the first quarter of 2026, according to a Reuters review of regulatory filings submitted to the U.S. Securities and Exchange Commission (SEC). Advertisement
The filings, submitted by nearly 6,000 hedge funds, pension funds, college endowments and other large asset managers, showed strong interest in companies expected to benefit from the rapid expansion of AI-related infrastructure. Investors largely favoured businesses connected to data centres, semiconductors, networking equipment and utilities, while showing a more cautious approach toward some of the largest technology companies.
More than 4,000 institutional investors either increased their existing holdings or opened new positions in a group of nine AI infrastructure-focused companies. These included Oracle, Arista Networks and Vertiv. In contrast, only 146 institutions reduced or exited their holdings in this segment, accounting for just 2.5% of investors that had filed their positions so far.
The quarterly 13-F filings offer insight into how major institutional investors adjusted their portfolios during the three-month period amid growing interest in AI and rising concerns around spending, profitability and market concentration. Large investment firms are required to disclose portfolio changes to the SEC within 45 days after the end of every quarter.
The Reuters review also showed strong buying activity in data centre companies and utility firms. Investors continued to view data centres as critical infrastructure for AI growth due to increasing demand for cloud computing capacity and high-performance computing facilities. Companies such as Digital Realty benefited from this trend as institutions expanded exposure to the sector.
Utility companies also attracted significant investor interest because AI data centres require substantial electricity and power infrastructure. Regulatory filings indicated that nearly 3,500 institutional investors added utility stocks to their portfolios during the quarter, while no major selling activity was reported in the segment.
At the same time, institutional investors appeared more selective with the so-called “Magnificent Seven” technology companies, a group that includes Meta and Microsoft. Investors weighed concerns over whether these companies could maintain aggressive AI spending while sustaining profit growth. As a result, sellers slightly outnumbered buyers in this category during the quarter.
The filings also highlighted growing investor interest in data analytics and AI software company Palantir Technologies. Among the institutions initiating fresh positions was Mubadala Capital, the sovereign wealth fund of the UAE, which disclosed a stake valued at USD 9.9 million during the quarter.
Mubadala Capital also opened a position in Shopify, reflecting selective interest in software companies despite broader weakness across the software-as-a-service sector. Investors remained cautious toward several SaaS businesses amid concerns that rapid advancements in AI could disrupt existing operating models and pressure future profitability.
Across a group of 20 US-listed software-as-a-service companies reviewed by Reuters, institutional investors were overall more inclined to sell rather than buy. Nearly 400 investors completely exited one or more positions during the quarter as concerns around earnings visibility and AI-driven competition weighed on sentiment.
Semiconductor companies, however, continued to attract strong institutional demand. More than 4,100 investors either increased holdings or initiated fresh positions in chip-related firms even as stock prices in the segment rallied sharply during the quarter. The trend reflected continued confidence that semiconductor manufacturers and suppliers will remain central to the expansion of AI infrastructure globally.
The growing institutional focus on AI infrastructure and supporting sectors comes as companies across industries continue increasing investments in cloud services, AI computing systems and large-scale data centre expansion. Market analysts have also noted that power availability, semiconductor supply and digital infrastructure are becoming key factors shaping long-term AI growth strategies globally.
Source Reuters
5th Jun, 2025
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