Victory Capital Management Inc Tilts From AI Winners To Software And Services

The biggest dollar adds lay out a clear roadmap: Victory wants to own the monetization layer of AI and digital transformation, not just the chips. They are leaning into scalable, high-switching-cost platforms even when those stocks are under near-term pressure versus their own cost basis.

• Accenture: Up 262.2% in shares, adding about $594.0M, despite being 32.6% below their average buy price. This is a bold call that global IT consulting and outsourcing will be the gatekeeper that turns corporate AI hype into billable work.
• ASML: Shares up 329.7%, with roughly $553.8M added, expressing conviction that lithography capacity remains a non-negotiable choke point in the semi cycle.
• ServiceNow: Nearly doubled (up 97.2%) for about $393.2M more, even though the position sits 36.5% below Victory’s cost, signaling a view that workflow software is a structural AI winner, not a trade.
• Meta Platforms and Adobe: Adds of roughly $324.8M and $162.8M respectively show faith in ad- and creator-driven software models, even amid volatility and drawdowns relative to Victory’s entry in Adobe.
• Netflix, US Foods, and Booking: In consumer and services, adds of $225.9M, $116.3M, and $57.6M lean into recurring, data-rich platforms with more cyclical but visible cash flows.

Taken together, the fund is deliberately averaging into high-quality software and service franchises on weakness, using AI-related chip and megacap gains as currency.

On the sell side, the message is blunt: take money off the table where narratives are crowded and gains are huge, and recycle into under-owned compounds. The heaviest trims are textbook profit-taking in names that have significantly rerated since Victory first bought them.

• Mega-cap tech and e-commerce: Amazon is cut 30.6% (about $1.56B freed), Nvidia 16.1% (about $1.10B), Apple 15.9% (about $900.5M), Microsoft 17.9% (about $864.0M), and Alphabet (GOOGL) 21.3% (about $771.2M). All except Microsoft sit on triple-digit percentage gains versus Victory’s cost.
• GLP‑1 and premium pharma: Eli Lilly is slashed 30.4% (about $751.0M), and Vertex by 43.7% (about $655.7M), implying skepticism that the recent drug euphoria will sustain its momentum at current valuations.
• Cyclical infrastructure and industrial winners: Quanta Services is more than halved (down 55.5%, about $888.9M trimmed), while EMCOR, Martin Marietta, UPS, and Freeport-McMoRan all see double-digit percentage reductions. Victory is clearly fading the late-cycle construction and energy-infrastructure trade.
• Other de-emphasized positions include Cisco, KLA, IBM, and a suite of retail/consumer holdings like BJ’s, TJX, Ross, and Home Depot, where gains are solid but the upside-to-risk trade-off now looks less compelling.

This is not a wholesale factor rotation out of growth: it’s a targeted removal of froth from the most crowded AI and infrastructure trades to fund new high-conviction software and services ideas.

The sector chart makes one thing clear: Victory is not abandoning technology; it is doubling down, but in a more refined way. Technology’s share of the disclosed book climbs from 45.82% to 47.9%, even though several of the largest market-cap tech names were trimmed.

Health care’s weight drops from 10.57% to 9.54%, driven by the sharp cuts in Eli Lilly and Vertex, plus trims in Johnson & Johnson and Intuitive Surgical. Industrials fall more sharply, from 8.42% to 6.72%, as Quanta, EMCOR, Martin Marietta, and UPS all shrink, signaling less appetite for late-cycle construction, engineering, and logistics.

Consumer discretionary stays roughly flat at 16.32% versus 16.46%, but its composition tilts slightly: more Netflix, US Foods, Booking, and a small add to Lowe’s, funded by trims in BJ’s, TJX, Ross, and Home Depot. Real-world services tied to payments and mobility (Visa, Mastercard, Uber, Accenture) push the “real estate”-tagged bucket up from 5.45% to 6.31%, while utilities edge from 2.4% to 2.8% via Constellation and NRG.

Finance and energy exposures are essentially steady, with marginal trims in Bank of America and Truist offset by a steady JPMorgan and modest change in Exxon. Overall, the portfolio tilts away from cyclical hard assets and experimental health care toward durable software, services, and cash-generating platforms that can compound through multiple macro regimes.

The pattern of adds and trims suggests Victory expects AI and digital transformation to remain the dominant profit pool, but believes the next leg of returns will accrue to software and services rather than just GPUs and hyperscale platforms. They are willing to stomach drawdowns versus their own cost in ServiceNow, Adobe, and Accenture to secure exposure to those durable franchises.

At the same time, heavy profit-taking in Amazon, Nvidia, Apple, Microsoft, Alphabet, Eli Lilly, and Vertex reads as a recognition that some early AI and GLP‑1 leaders now embed a lot of good news. Victory is not shorting those themes; they are simply asking those winners to fund new, underappreciated AI-on-top plays and service platforms.

The net reduction in industrials and construction-exposed names hints at caution on late-cycle capex and infrastructure, even as modest adds in utilities and stable financials keep a ballast of cash-flow resilience. Real-economy platforms like US Foods, Booking, and Netflix round out the picture: the fund still wants growth, but prefers it where data, scale, and recurring contracts create real pricing power.

If this quarter is a guide, expect Victory to keep a high overall tech weight but continue shifting from headline AI beneficiaries and cyclical infrastructure toward the workflows, integrators, and service platforms that monetize those technologies over a full cycle.