gettyimagesbank

The National Pension Service (NPS) sold its Nvidia and other leading U.S. tech stocks to realize profits in the fourth quarter of last year, adjusting its portfolio to reflect the current shift in investor interest from artificial intelligence (AI) hardware to AI software, according to its regulatory securities report Tuesday.

According to the Form 13F report submitted by the NPS to the U.S. Securities and Exchange Commission (SEC), the NPS sold 789,000 shares of Apple, 1.2 million shares of Nvidia and 109,000 shares of Microsoft during the fourth quarter. These companies had ranked first to third in its U.S. stock portfolio holdings.

Based on end-of-year prices, the NPS realized profits of $200 million from Apple, $160 million from Nvidia and $46 million from Microsoft.

People receive a consultation at a Seoul office of the National Pension Service, Jan. 31. Yonhap

Considering its average purchase price for each stock, the fund secured gains of approximately $130 million each from Apple and Nvidia, while earning $27 million from Microsoft.

The NPS also sold portions of its holdings in Meta, Alphabet, Tesla and Netflix, among others, which delivered significant valuation gains in 2024.

The vacancies created in this process were filled with stocks poised to become the "next Nvidia."

Shifting its focus in line with the current trend from AI hardware to software, the NPS increased its holdings the most in Broadcom, Amazon, Palantir and Lam Research.

The fund purchased a net 320,000 shares of Broadcom at $74 million and 163,000 shares of Amazon at $36 million in 2024, increasing their portfolio weights by 0.5 percent.

It also bought 1.94 million shares of Palantir at $150 million and 3.04 million shares of Lam Research at $220 million, raising their portfolio weights by 0.25 percent and 0.21 percent, respectively.

Broadcom has gained attention as investors search for new AI-related plays beyond Nvidia. As major information technology firms like Microsoft, Amazon and Google seek to reduce their heavy reliance on Nvidia, Broadcom has emerged as an attractive alternative due to its strength in the design of application-specific integrated circuits — semiconductor chips designed for a specific use.

Notably, Broadcom's appeal is growing as it has established a strong foothold in both hardware and software.

"Broadcom's investment appeal can be summarized as the growing demand for AI-specific chip design and the expansion of AI-driven software. Its software business is also expanding through VMware, which it acquired in 2023," KB Securities analyst Kim Se-hwan said.

As for Palantir, Shinhan Securities analyst Shim Ji-hyun noted, "It is the software company where AI monetization is being observed most rapidly."

Form 13F is one of the reports required by the SEC, which must be filed quarterly by institutional investors managing over $100 million in assets. It is closely watched by global investors as it provides insight into the strategies and buy-and-sell lists of major funds.