Capital International Investors Rotates From Mega‑Cap AI to Defensive Growth

The biggest incremental bet is a new, sizable stake in AstraZeneca. At 1.58% of the book and about $6.72B, it instantly joins the top tier of holdings, signaling a view that large-cap pharma can offer multi-year innovation and pricing power without AI-style valuation froth.

Health care isn’t just getting a new name; it’s getting reinforcement. Capital International increased AbbVie by +23.3%, lifting it to roughly $3.13B, building out a clear cluster in cash-flow-heavy biopharma alongside existing Eli Lilly and others.

On the cyclical side, they’re leaning into physical infrastructure and connectivity rather than pure cloud. Additions include:

• Costco: stake up +329.4% to about $2.74B, turning it from a token position into a core defensive consumer compounder.
• Caterpillar: shares up +61.7% and value up roughly $935.4M, a call on sustained capex and infrastructure build-out.
• Amphenol: +49.2% more shares, adding about $1.47B; a classic "picks-and-shovels" play on electronic content across autos, industrials, and communications.
• Shopify and MicroStrategy: +30.6% and +52.5% share increases, respectively, show they’re not abandoning growth software or higher-volatility tech, just moving down the hype curve.
• Visa: a +10.2% add to a $7.17B position signals ongoing conviction in global payment rails as a secular winner.

Taken together, the buys skew toward businesses with durable moats and tangible cash generation, even when they sit in growth sectors.

The sell tape reads like a who’s who of the last cycle’s darlings. Broadcom, still the largest single line item at 6.09% and about $26.0B, was cut by -40.8%, freeing up an estimated $17.88B of capital while still leaving a massive residual bet on semiconductor infrastructure.

Alphabet, Microsoft, Apple, Amazon and Nvidia were all pared meaningfully. Apple was slashed by -49.5%, Microsoft by -32.8%, Alphabet’s GOOG line by -45.6% and GOOGL by -27.6%, Amazon by -36.9%, and Nvidia by -5.9%. These are not thesis reversals; they are disciplined trims of positions sitting on triple-digit gains versus cost.

They also took a knife to more cyclical and rate-sensitive exposures. Examples:

• Taiwan Semiconductor and Micron: cut by -55.9% and -59.5%, respectively, after huge run-ups, pointing to reduced appetite for memory and foundry cyclicality.
• GE Aerospace, RTX, Northrop, TransDigm: all reduced double-digits, monetizing aerospace/defense strength while keeping exposure intact.
• JPMorgan and Truist: JPM slashed -52.7%, Truist -22.0%, echoing a view that the easy money from the rate cycle has been made.
• High-quality defensives like Philip Morris, Abbott, Amgen, UnitedHealth and Mondelez were also trimmed, suggesting they’re being used as funding sources now that more compelling risk/reward exists elsewhere.

Across the book, the pattern is consistent: sell down-size winners and fully valued defensives, not problem children.

On the surface, sector weights barely budge: technology only dips from 51.61% to 47.69%. Underneath, though, the character of that tech exposure is shifting away from a concentration in hyperscalers and front-page AI semis toward a more distributed mix including payments, software platforms, and electronic components.

Health care is the clear winner on the margin, up from 12.33% to 13.72%. The combination of a new AstraZeneca stake and an AbbVie add, against trims in Philip Morris, Abbott, Amgen and UnitedHealth, shows a rotation within health care toward higher perceived growth and pipeline leverage.

Industrials and energy also quietly rise. Industrials move from 8.65% to 9.32% as Caterpillar remains a key add and FTAI and Danaher only partially trimmed, effectively expressing confidence in a real-economy investment cycle. Energy grows from 3.77% to 4.08% even after cuts in ConocoPhillips and Exxon, thanks to steady conviction in integrated oil and gas cash flows.

Consumer exposure is being retooled rather than expanded. Consumer discretionary edges up from 6.92% to 7.50% as Costco is scaled dramatically, even while Royal Caribbean, Amazon and Yum are trimmed. Real estate-weighted holdings (Visa, Mastercard, MercadoLibre, Welltower by label) rise from 6.85% to 7.92%, but in practice this bucket represents a blend of payments, e-commerce, and health-care REITs — more structural growth than property beta.

This quarter’s moves sketch a clear roadmap: Capital International wants a barbell of durable, cash-rich compounders and targeted exposure to real-asset and infrastructure cycles, financed by trimming stretched AI and mega-cap winners. They are not abandoning technology leadership, but they are consciously lowering top-name concentration and adding ballast elsewhere in the book.

Rising weights in health care and industrials hint at where they see multi-year opportunity. Large-cap biopharma (AstraZeneca, AbbVie, Eli Lilly) gives them innovation and pricing leverage with less sentiment risk than pure AI plays, while Caterpillar, Amphenol and FTAI keep them tied to infrastructure, reshoring and aviation spending.

On the consumer and financial side, the focus is on rails, not riders. Visa, Mastercard, Costco, Shopify and MercadoLibre form a network of tollbooth-like businesses across payments and distribution; trims in banks and high-beta travel (JPMorgan, Truist, Royal Caribbean) suggest less enthusiasm for traditional cyclical exposure.

If the macro environment gets choppier or multiples compress further, this portfolio should lean on its upgraded health care and infra ballast while still owning upside through a diversified tech sleeve. If AI and growth continue to melt up, they will participate — just with less single-name risk than in prior quarters.