The stock market year 2025 is coming to an end and for investors it has been a lucky one, especially if you have focused on the US. The broad S&P 500 index is up 16 percent so far this year, driven by heavy tech companies, but the Stockholm Stock Exchange's OMXS30 index has also recently reached a new record level.
This is now causing more and more people to talk about a bubble warning. Among them is Michael Burry, the investor who predicted the US housing crash in 2008 and has now shorted AI companies such as Palantir and Nvidia, i.e. speculated that the shares would fall.
Broader development
Kristin Magnusson Bernard does not want to comment on individual companies such as Nvidia, which will present interim figures next week, but notes:
I think taking profits is generally healthy. The more you take a little profit and invest it in something else, the better chance there is over time for a broader and more favorable development for several companies.
But have we really seen such profit-taking, with the stock markets at record levels?
"What we have seen during the year is that in the short term, some capital was shifted out of the US as political uncertainty increased. Since then, many, including small savers, have moved capital back," she says.
Great giants
In the US, the tech giants, the so-called Magnificent 7 companies, now account for 40 percent of the total value of the S&P 500 index of the 500 largest companies. That concentration in particular can be problematic, admits Kristin Magnusson Bernard. But she sees a big difference compared to just under a year and a half ago when she last spoke to TT about the risk of a bubble.
What is different now is that it has become increasingly clear how AI and the technological developments associated with AI are also benefiting more and more companies. We are now starting to see increasingly clear effects in many different companies and for the economy at large what this technology can do.
At the same time, cryptocurrencies such as bitcoin have also risen sharply during the year. However, Kristin Magnusson Bernard sees it as highly unlikely that the AP Fund would start investing in cryptocurrencies.
It would require a change in the law that we are governed by. In a way, you could say that some of the currencies are quite close to commodities in nature and we are not allowed to invest in commodities. I don't think it will be of any use to us until the Riksdag takes the initiative to change the law and I don't see that happening anytime soon.
