Calpers Trims Big Tech Holdings and Leans Into Private Equity as AI Doubts Grow

California’s public pension fund, the fifth largest in the world with more than $600 billion under management, is pulling back from major US technology names. Calculations based on regulatory filings show it reduced the combined number of shares it holds directly in the Magnificent Seven by 26% in the first half of 2026. Deputy chief investment officer Anton Orlich said public equity valuations look expensive and that the tech giants could trail other investments. The fund is putting more money into private equity to spread its bets across a wider range of companies and lean less on a few market leaders.

How the Magnificent Seven Have Performed

The group covers Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta and Tesla. A Roundhill ETF that tracks them is up 7% so far this year, driven by Apple’s 34% gain and a 12% rise for Nvidia. Meta, Alphabet and Tesla are all lower for the year.

AI Spending Worries and Neocloud Selloff

The move adds to growing doubts about the payoff from heavy AI spending. SpaceX recently raised $40 billion in debt to buy GPUs, and Elon Musk warned that financing has mostly dried up for companies without major revenue beyond AI data centers, predicting consolidation among neocloud providers.