CalPERS, the world’s fifth-largest pension fund, is pulling back from big tech. The California fund, which manages more than $600 billion, cut its combined direct shareholdings in the so-called Magnificent Seven tech stocks by 26% in the first half of 2026, according to the Financial Times, as concerns mount over stretched valuations and the sustainability of the artificial intelligence investment boom.
CalPERS (Credits: CoinDesk)
The Magnificent Seven comprises Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta Platforms and Tesla. The Roundhill Magnificent Seven ETF is up 7% year to date, led by Apple’s 34% gain and Nvidia’s 12% rise, while Meta, Alphabet and Tesla are all down for the year, CoinDesk reports.
CalPERS Pulls Back From Big Tech Amid AI Valuation Jitters
CalPERS is increasing its exposure to private equity instead, seeking to spread its investments across a broader range of companies and reduce its dependence on a handful of stock market leaders. Deputy chief investment officer Anton Orlich told the FT that public equity valuations looked expensive and that the technology giants could underperform other investments.
The shift comes as investors question the payoff from soaring AI spending. Shares in so-called neocloud companies fell in Monday’s pre-market trading, with CoreWeave, Cipher Mining and IREN lower after Elon Musk warned of tightening financing for AI data center companies.
What the CalPERS Big Tech Pullback Signals
CalPERS’ move is notable because of its size and influence: when one of the world’s largest pension funds trims exposure to the market’s biggest winners, other allocators pay attention. The fund’s reasoning, as reported, is not a prediction about any single company, but a broader judgement that public equity valuations look expensive relative to other opportunities.
For now, the AI trade faces a two-sided debate: the technology giants continue to spend heavily on AI infrastructure, while investors increasingly ask when that spending turns into returns. CalPERS, it seems, is answering that question by diversifying away from the very stocks that have driven the market.
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Source: CoinDesk — read the full story there.
