Calpers Cuts Tech Exposure Amid Market Uncertainty

Calpers, the pension fund managing over 600 billion dollars, reduced its direct stake in the seven largest U.S. technology companies by 26 percent. This shift took place during the first half of this year.

The decision reflects concerns regarding the high valuations of these firms and the sustainability of massive investments in artificial intelligence. The affected group includes giants such as Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, and Tesla.

Anton Orlich, the fund's managing investment director, stated that stock prices in the public market appear expensive. Calpers is now seeking to diversify its portfolio by increasing exposure to private equity to reduce reliance on a few market leaders.

The climate of uncertainty regarding returns on technology spending has also impacted neocloud companies. The sector is facing pressure as shares of firms like CoreWeave, Cipher Digital, and IREN decline in the financial market.

Institutional caution toward the tech sector may increase risk aversion regarding volatile assets and strengthen the search for reserve assets or yields outside the traditional stock market.