Franklin Resources 13F Portfolio

The biggest buys table tells a very clear story: Franklin is betting that the monetization phase of AI will accrue first to hyperscale platforms and the chipmakers that feed them. Apple climbed to 4.34% of the book with a 42.4% share increase and an estimated $6.0B add, while Microsoft’s stake was lifted by 24.4%, adding about $3.5B. Amazon, at 3.06% of the portfolio, saw another $1.3B in capital.

Underneath the platforms, the fund is dramatically increasing exposure to AI capacity. Advanced Micro Devices was boosted by +111.0%, adding roughly $2.8B, and Micron by +84.0% for another $1.9B; both moves signal a belief that GPU competition and memory demand still have a long runway even after strong price performance. Lam Research and Applied Materials also saw double‑digit share increases, reinforcing the bet on the equipment layer.

The most interesting non‑tech adds are in health care. AbbVie’s position grew +36.9% (about $1.4B), while UnitedHealth jumped +52.3% (~$1.2B), and Merck rose +20.2%. That cluster, along with incremental adds to Eli Lilly, looks like an intentional build-out of a second core: durable, high‑ROIC compounders that can grow through multiple cycles and help smooth the ride if AI enthusiasm cools.

The trims are not a retreat from tech so much as a cleanup of crowded trades and legacy exposures. Alphabet’s GOOGL line was cut by -38.6%, freeing about $5.0B, even as the GOOG line was increased; this looks like tax or index housekeeping around class structure rather than an outright view downgrade. More telling: Nvidia was cut -5.5% (roughly $1.1B) and Broadcom -13.7% (~$1.5B), classic profit‑taking after enormous gains.

On the networking side, Cisco absorbed a -25.5% reduction (about $1.7B), a clear indication that legacy routing and switching are not where Franklin wants incremental AI dollars. In financials, Citigroup was trimmed -7.6% ($0.4B), Goldman Sachs -14.1% ($0.3B) and PNC -2.2%; the pattern says big balance sheet and capital‑markets cyclicality are now funding sources rather than growth centers.

Cyclicals saw similar treatment. Tesla (-8.8%), General Motors (-13.2%) and Hilton (-10.4%) all came down, and Walmart was reduced by -8.2%. Franklin isn’t abandoning the consumer or autos, but it is clearly less willing to pay up for capital‑intensive or macro‑sensitive stories when AI infrastructure and health-care defensives are competing for the same dollar.

At the sector level, the shift is incremental in percentages but meaningful in signal. Technology climbed to 46.66% from 45.43%, driven by larger stakes in Apple, Microsoft, AMD, Micron, Lam Research and Applied Materials, even after trimming Nvidia and Broadcom. At the same time, the one truly legacy tech exposure, Cisco, was aggressively cut, driving Telecommunications down to 2.14% from 3.03%.

Finance is drifting lower to 11.04% from 11.75% as capital exits Citigroup, Goldman Sachs, PNC and, to a lesser degree, Bank of America, while Schwab and Allstate get modest adds. That’s a subtle upgrade from capital‑intensive lenders and traders toward fee‑based and insurance economics. Health care moved up to 11.78% from 10.99% on the back of AbbVie, Merck, UnitedHealth and incremental adds elsewhere, consolidating it as a co‑anchor to tech.

Elsewhere, Franklin is essentially holding its ground. Energy is flat-to-down marginally, with a slight add to Exxon offset by a small Chevron trim. Consumer Discretionary eased to 12.36% from 12.54% as Walmart and Hilton came down even while Amazon and housing‑linked Pulte and equipment name United Rentals ticked higher. Utilities rose to 0.80% from 0.50% via a 69.4% surge in NRG, adding a small but pointed inflation‑hedge and power‑price lever.

Taken together, the moves say Franklin wants to own AI’s cash-flow winners, not its froth. Trims in Nvidia and Broadcom free up capital for Apple, Microsoft, Amazon and the second tier of AI beneficiaries in semis and equipment, where upside is more about earnings catching up than multiple expansion alone. The portfolio is effectively trading some pure‑play AI beta for broader platform duration.

The simultaneous build-out in health care suggests an explicit barbell: innovation and compute on one side, defensible drug and managed‑care cash flows on the other. Adds to AbbVie, Merck, Eli Lilly and UnitedHealth create a ballast that can compound even if the AI narrative stutters, while still participating in long‑term demographic and innovation tailwinds.

On the risk side, the steady de‑emphasis of big banks, legacy networking hardware and capital‑intensive cyclicals hints that Franklin expects a more discriminating market ahead. If volatility rises or growth expectations reset, this book is now less reliant on leverage‑heavy financials and more levered to software, semis and healthcare pricing power. For outside observers, the 2026 Q2 13F reads like a mature, late‑cycle AI positioning: still bullish on the theme, but increasingly picky about where in the stack the next dollar goes.