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Norges Bank Is Pulling Back on the ‘Magnificent Seven’

Norges Bank changes course on Magnificent seven 

The world’s largest investor in stocks has trimmed its exposure to the giant market winners from the artificial intelligence boom.

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Norges Bank

Nicolai Tangen, CEO of Norges Bank Investment Management, Norway’s $1.5 trillion sovereign fund, said the fund has cut its holdings in the “Magnificent Seven” stocks that soared last year partly on hopes for AI to transform business.

Norges tracks broad market indexes but has the discretion to own more or less of certain stocks. He said in the first half of 2023 the seven stocks—Microsoft, Alphabet, Apple, Tesla, Nvidia, Meta, and Amazon—generated nearly $50 billion in gains for the fund. He said the fund is now neutral weight in the stocks compared to the index.

“It is real what is happening in AI right now,” Tangen said. “You speak to Sam Altman and you see what’s happening to their business, and you speak to Microsoft, and so it is happening. It’s difficult to fine-tune these frothy situations.”

He spoke on the sidelines of the World Economic Forum in Davos, Switzerland.


Image: Norges Bank