California’s public pension fund is reducing its direct exposure to the biggest U.S. technology companies as investors reassess the valuations and future payoff of the artificial-intelligence boom. The shift comes as financing pressure weighs on companies building data centers for AI workloads and raises fresh questions about how long the current technology investment cycle can continue.
According to CoinDesk, the Financial Times reported that Calpers cut the combined number of shares it directly held in the so-called Magnificent Seven by 26% during the first half of 2026. The group consists of Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta Platforms and Tesla.
Calpers manages more than $600 billion and is described as the world’s fifth-largest pension fund. Its move does not represent a withdrawal from technology as a whole, but it does reduce the fund’s direct dependence on a small group of highly valued public companies that have led parts of the U.S. stock market.
Why Calpers is changing its exposure
The pension fund is increasing its allocation to private equity while seeking broader exposure across companies. Private equity involves investing in businesses that are not publicly traded, unlike direct holdings in listed shares. In this case, the change is intended to diversify Calpers’ investments and reduce reliance on a handful of major stock-market leaders.
Anton Orlich, Calpers’ deputy chief investment officer, told the Financial Times that valuations in public equities appeared expensive. He also said the large technology companies could underperform other investments.
The move reflects a debate that has grown alongside the rapid expansion of AI spending. Investors have been putting substantial capital into chips, computing capacity and data centers needed to run AI systems. At the same time, concerns have increased over whether the earnings generated by that spending will justify the prices attached to technology companies and the infrastructure built around them.
Calpers’ reported reduction applies to its direct shareholdings. It does not, based on the information available, establish that the fund has eliminated all exposure to the companies or to technology-related investments through other vehicles.
AI infrastructure faces financing pressure
The pension fund’s repositioning coincides with warnings about companies known as neocloud providers. These businesses supply specialized cloud and data-center capacity, including infrastructure used for AI calculations.
Elon Musk has warned that financing is tightening for AI data-center companies whose revenue is not substantial outside that business. He also predicted consolidation among neocloud providers. The warning followed a $40 billion debt raising by SpaceX to purchase graphics processing units, or GPUs, for AI calculations. GPUs are processors widely used for the large-scale computing tasks required by many AI systems.
The concerns were visible in Monday’s pre-market trading. CoreWeave, Cipher Digital and IREN all fell before the regular U.S. market session, according to the source material. The moves showed how sensitive AI infrastructure companies can be to changes in financing conditions and expectations about future demand.
A tightening funding environment can matter especially to companies that must spend heavily on data centers and computing equipment before their revenue base is fully established. The source material does not provide the size of the pre-market declines, but it identifies the three companies as being under selling pressure after Musk’s comments.
Market performance and Moneyiar data
The Roundhill Magnificent Seven ETF, which tracks the group, was up 7% year to date in the figures cited by the source. Performance within the group has been uneven: Apple had gained 34%, while Nvidia was up 12%. Meta Platforms, Alphabet and Tesla were down for the year. The source does not provide year-to-date figures for Microsoft or Amazon.
Moneyiar market data recorded at approximately 10:38 p.m. on October 25, 2026, showed mixed performance among the selected digital assets:
- Ethereum Name Service (ENS) was priced at $5.2749448818, down 0.45% over 24 hours and 2.02% over seven days.
- Neo (NEO) was priced at $2.1034990512, up 0.62% over 24 hours but down 3.41% over seven days.
- DeepBook Protocol (DEEP) was priced at $0.0164056385, down 1.11% over 24 hours and 14.74% over seven days.
- FUNToken (FUN) was priced at $0.0089182414, up 1.62% over 24 hours and 0.08% over seven days.
These figures are Moneyiar data at the stated time and cover digital assets rather than the U.S. technology shares discussed above. Together with the reported shift by Calpers and the pressure on neocloud stocks, they illustrate a market environment in which performance is diverging sharply between assets and where investors are paying closer attention to valuations, funding and the durability of growth expectations.
