Capital World Investors 13F Portfolio

The biggest buys make the thesis plain: Capital World is betting that AI capex, data intensity and physical bottlenecks are just getting started. Instead of chasing another leg in the same AI leaders, they are scaling the next layer down in the stack and the balance‑sheet assets tied to it.

Key conviction adds:

• Apple (AAPL) was boosted by 45.0%, a roughly $3.53B move, signaling comfort buying a compounder at only a modest 42.1% gain vs average cost.
• Western Digital (WDC) jumped 39.7% (+$3.01B), a classic post‑GPU trade on storage demand as AI data sets explode.
• Alphabet class A (GOOGL) rose 12.2% (+$2.86B), keeping them overweight the core cloud and ad platform powering AI workloads.
• Amazon (AMZN) increased 21.4% (+$2.57B); at only a 41.5% gain vs cost, they’re still willing to pay up for AWS and retail scale.
• Applovin (APP) was the most aggressive add, up 156.4% (+$2.56B) despite being 21.2% below average buy — a rare, explicit averaging‑down in an adtech/AI‑driven software name.
• Broadcom (AVGO), already the top holding at 5.44%, was lifted another 4.9% (+$2.15B), cementing their view of it as core AI infrastructure.
• KLA (KLAC) saw an 11.0% increase (+$1.35B), a pure bet that semi‑equipment spend has more to run.
• On the real‑asset side, Welltower (WELL) was ramped 57.4% (+$1.66B), pairing health‑care real estate with the broader pharma and managed‑care basket.

Taken together, they’re willing to buy high‑quality platforms at higher bases, but the real size is going into the picks‑and‑shovels of the AI build‑out and income‑producing assets that can ride higher nominal growth.

The trims are not broad risk‑off; they’re surgical profit‑taking and a sector reshuffle. Capital World is cashing in where gains are enormous and where AI enthusiasm is most fully priced, then recycling into what they see as the next beneficiaries.

Notable funding sources:

• Micron (MU) looks like a partial de‑risk after a huge run: shares are down 29.9% this quarter (‑$14.53B) but it still sits at 4.02% of the book and over 1,017.1% above average cost.
• Nvidia (NVDA) and Intel (INTC) were cut 16.2% (‑$4.23B) and 30.9% (‑$3.44B) respectively, each sitting on several‑hundred‑percent gains; these are classic “cash machine” trims, not thesis breaks.
• Microsoft (MSFT) fell 10.7% (‑$2.46B) even as it remains deeply profitable to them (+804.3% vs cost), freeing capital for other large‑cap tech and infra.
• In financials, Bank of America (BAC), Citigroup (C) and JPMorgan (JPM) were all cut (‑19.7%, ‑17.4%, ‑6.1%), signaling less enthusiasm for rate‑sensitive balance‑sheet plays.
• Consumer discretionary stalwarts were tapped as well: Starbucks (SBUX) was reduced 11.5% (‑$1.21B), Home Depot (HD) 18.4% (‑$1.05B), and Netflix (NFLX) 11.9% (‑$0.84B), suggesting they see better risk‑reward outside crowded U.S. consumer names.

Even some defensives like Wheaton Precious Metals (WPM) were clipped 13.0%; gold exposure is no longer the main hedge when they can balance growth with utilities, energy and REITs instead.

On the surface, tech exposure barely budged, drifting from an estimated 52.5% to 51.19% of the book. Underneath, however, the composition changed: less in the most speculative or fully‑priced semis and consumer names, more in diversified platforms and the physical infrastructure AI will depend on.

The clearest gainer is health care, rising from 16.83% to 17.42%. Adds in Eli Lilly (LLY), Vertex (VRTX), UnitedHealth (UNH), AstraZeneca (AZN) and AbbVie (ABBV) show a preference for durable, innovation‑driven cash flows — a counterweight to tech multiple risk.

Real assets are also quietly marching higher. Energy climbed from 2.66% to 2.91% on increased Canadian Natural Resources (CNQ) and EOG Resources (EOG); real estate rose from 2.11% to 2.62% via big buys in Welltower and more Visa (mis‑tagged but functionally a toll‑road on global commerce); utilities ticked up from 0.98% to 1.10% on Southern (SO). Finance shrank from 4.16% to 3.67%, and consumer discretionary nudged down from 8.72% to 8.61%, as banks and U.S. consumer leaders were used as liquidity.

Net‑net, this is an AI‑heavy portfolio being paired with health‑care innovation and value‑tilted hard assets. They are not abandoning growth; they’re surrounding it with earnings and assets that can survive tighter financial conditions.

This quarter’s pattern suggests Capital World thinks the AI build‑out has years left, but the leadership will broaden from a handful of GPUs into memory, storage, equipment, and the platforms with real pricing power. The heavy adds to Micron’s value chain cousins like Western Digital and KLA, plus reinforcement of Broadcom, Apple, Alphabet and Amazon, all underscore a belief that AI spend will diffuse across the stack.

At the same time, they seem unwilling to run a one‑factor book. Rising stakes in pharma, managed care, health‑care REITs, energy producers and utilities say they want cash flows tied to demographics, real assets and regulated returns — not just ad budgets and cloud capex.

Going forward, expect them to keep using mega‑cap tech and banks as an internal funding wheel: trimming where gains are extreme or narrative is hottest, recycling into the “second‑derivative” AI winners and into resilient, income‑oriented assets. If rate volatility or AI sentiment spike again, this positioning gives them room to lean either way without blowing up the core thesis: that the combination of digital infrastructure and real‑world cash generators will continue to compound.