Primecap Management Co Ca 13F Portfolio

The biggest adds are not moonshot growth stories; they’re scaled operators where Primecap thinks the market is mispricing durability and cyclical recovery.

On the health-care side, they are very obviously upgrading from low-growth big pharma to procedural and biotech upside:

• Boston Scientific (BSX) is the standout: position up +55.3% and +$767.9M, to 1.28% of the book. That is a clear vote that device volumes and pipeline optionality are still underappreciated versus traditional pharma.
• Biogen (BIIB), already a core name at 1.94%, gets another +2.7% shares and +$85.8M. Primecap is signaling confidence that its neurology and rare-disease portfolio still isn’t fully valued.

In cyclicals, they are deliberately buying what most investors still hate:

• American Airlines (AAL) is up +44.4% in shares and +$392.9M in value, even though it sits -42.6% versus their own average cost. This is a textbook Primecap averaging-down into a stressed balance sheet they expect to survive.
• United (UAL) and Southwest (LUV) both see fresh capital (+4.5% and +3.7% shares; +$96.7M and +$88.9M), rounding out an industry basket that now spans the U.S. majors.

On the financials / payments side, they’re leaning into fee franchises that benefit from nominal GDP more than credit beta:

• Charles Schwab (SCHW) gets +7.2% more shares and +$154.9M, pushing it to 1.37% of the book, a statement that the earnings drag from higher short rates is finite.
• Visa (V) is quietly built up +5.1% in shares and +$71.5M, a classic tollbooth on global consumption.
• Adobe (ADBE) is another notable add in software, up +10.5% shares and +$101.7M; they’re siding with entrenched creative and enterprise software moats rather than the most speculative AI names.

The sell blotter makes the funding sources obvious: they’re taking a victory lap in the biggest AI and semi winners, plus trimming slower-growth pharma to pay for higher-upside health-care and cyclicals.

On the tech side, they are not questioning the AI data-center buildout; they are questioning how much of it is already embedded in prices:

• Micron (MU), still a massive 13.12% position, is trimmed -12.1% in shares, freeing up about $3.07B. With the stake showing an 8,230.7% gain versus cost, this is pure risk management, not a thesis reversal.
• KLA (KLAC) is cut -15.8% and -$1.16B, Texas Instruments (TXN) -11.8% and -$339.7M, and Applied Materials (AMAT) -11.2% and -$94.9M; together they show Primecap pulling back from the most cyclical parts of the AI equipment chain after extraordinary multiple expansion.
• Flex (FLEX) and Alphabet (GOOG/GOOGL) are also modestly reduced, crystallizing large legacy gains while keeping them firmly in the core.

In health care, the pattern is rotation rather than retreat:

• Amgen (AMGN) is slashed -23.9% and -$766.7M; Novartis (NVS) is down -12.9% and -$152.8M. Both are classic cash-rich, lower-growth pharmas whose capital is being reallocated into higher operational torque at BSX and BIIB.

Even in transportation, they’re refining the mix:

• FedEx (FDX) sees a -20.8% share cut and -$672.4M. If you’re going to own volume-sensitive transport, Primecap seems to prefer operating leverage to pure parcel exposure right now, shifting that risk budget toward passenger airlines where valuation compression has been brutal.

Despite the trims, Primecap remains a technology-centric shop: tech is 51.54% of these disclosed holdings versus an estimated 53.36% last quarter. The important nuance is that the marginal tech dollar is moving from capex-sensitive semis and equipment into stickier software like Adobe, while the freed-up capital is redirected into health care and travel.

Health care’s weight has nudged up to 22.38% from 21.59%, but the internal mix has changed more dramatically than the headline. Big, slower-growth pharmas like Amgen and Novartis were notable funding sources, while Boston Scientific, Biogen, and other higher-torque names gained ground. This is Primecap expressing a view that procedure growth and specialty biology justify more risk than patent cliffs.

Consumer discretionary rises to 12.49% from 12.11%, powered not by e-commerce but by old-fashioned planes and off-price retailers. American, United, Southwest, and a maintained stake in Delta form an airline complex that now rivals their Amazon and FedEx exposure. They are effectively betting that U.S. consumer and corporate travel will remain resilient enough to delever these balance sheets.

Finance edges up to 4.48% from 4.25%, led by Schwab and steady positions in Raymond James, JPMorgan, and Northern Trust. Industrials, energy, and the Sony stake in consumer electronics all see modest absolute increases; collectively, they signal a manager who wants more participation in a real-economy upcycle without abandoning their structural tech and health-care bias.

Taken together, the moves point to a manager who believes we are transitioning from an AI story to a broader, nominal-GDP-and-procedures story. They’re not fighting AI — Micron, Nvidia, Intel, and Microsoft still loom large — but they are actively diversifying away from the narrowest AI beta into businesses that can compound cash flows even if AI multiples cool.

The aggressive buying of U.S. airlines, especially in a name like AAL that sits far below their cost, says Primecap thinks recession risk is mispriced relative to capacity discipline and demand. If they’re right, the airline basket will provide operating leverage just as investors rediscover travel cyclicals. If they’re wrong, the damage is contained because it’s funded by enormous embedded gains elsewhere.

On the health-care front, the reshuffle toward BSX and BIIB suggests they expect procedure volumes, innovation, and specialty drugs to be the next leg of defensible growth after GLP-1s and mega-cap pharma reratings. The incremental buys in Schwab and Visa round out the thesis: own scaled platforms that monetize activity levels, not spread volatility.

Going forward, expect Primecap to keep running a barbell: oversized legacy winners in semis and platforms on one end, and a contrarian basket of airlines, medtech, and financial fee machines on the other. If AI optimism broadens into a real-economy expansion rather than collapsing into a bust, this quarter’s reallocation should leave them with more ways to win and fewer tail-risk exposures to a single narrative.