Investors in the US are now moving money out of some of the giant companies in the “Magnificent Seven”, writes The Financial Times. The lustre around the group, which includes Nvidia, Meta, Apple, Microsoft, Alphabet, Amazon and Tesla, is fading.
Share prices are soaring, but the seven companies together fell around 10 percent in June. In real terms, this is a huge amount of money that has been wiped out.
At the same time, the prices of other chip manufacturers are rising sharply, as are those of other companies that benefit from AI developments. That's where investors' money is going instead.
It's completely logical and expected. Other companies are moving their positions forward, says Robert Bergqvist, senior economist at SEB.
Investors are questioning the sky-high valuations of the tech giants, and don't believe the companies will give them sufficient returns. AI development is behind it - at first it was concentrated in a few large companies, but now it is starting to spread to more, he explains.
We hope for more traction for AI development.
Competition is increasing
The iron grip of giant companies may loosen somewhat as competition increases.
There are also security policy reasons. They want to increase resilience and reduce dependence.
He explains that investor scepticism can partly be explained by the vulnerability of companies, as well as states, to becoming completely dependent on the services of the giants. Both companies and states want to free themselves and increase their resilience. This means that the high valuations of the tech giants can feel a bit shaky for those who are going to invest money.
It is difficult to value the big companies now. We are at a technological crossroads.
Swedish US ownership
Swedish investors, such as pension funds or global funds, have a fairly large exposure to US stock markets and tech giants. Although Swedish investors have not yet started to flee the tech giants.
We don't see any signs of it yet, but the idea is certainly there.
Robert Bergqvist thinks it is important that Sweden, and the EU, speed up when it comes to AI and technology.
Two countries, the US and China, are at the forefront when it comes to technology and AI. Sweden is doing better than the EU average. But Sweden needs to think that its competitors are the US and China, not other EU countries. It is moving too slowly in the EU, he says.
The stock prices of "The Magnificent Seven" - the seven giant companies Nvidia, Meta, Apple, Microsoft, Alphabet, Amazon and Tesla - as a group fell around 10 percent in June.
Just over 22 trillion kronor has disappeared, which can be compared to Sweden's entire GDP being just over 6.5 trillion kronor this year.
Since the turn of the year, the fall has been around 3 percent.
