Is there a bubble in tech stocks?

According to giant fund Capital Groups, a “moderate bubble” has begun to form in the Magnificent Seven stocks. A giant fund has issued a warning against the rally in the Magnificent Seven stocks, which consist of large-scale US technology companies Apple, Microsoft, Nvidia, Alphabet, Amazon.com, Meta Platforms and Tesla. Capital Groups, which manages approximately $2.5 trillion, stated that a “moderate bubble has begun to form” in US technology stocks. The fund’s equity investments director Andy Budden stated that they have reduced their positions in these stocks that have recently shown high performance and increased their shares in large chip companies other than Nvidia. Budden said, “When you look at other sectors where very important developments have taken place, you can see that valuations are attractive for active investors both in the US and outside the US.” The shares of the technology giants referred to as the Magnificent Seven had performed more than twice as well as the S&P 500, which has risen 24 percent this year. Some hedge funds also reduced their Magnificent Seven positions in the fourth quarter of 2023, and Bank of America strategists including Michael Hartnett noted in mid-February that there were some similarities between the course of technology stocks and past bubbles.