(Bloomberg) — Capital Group Cos. is shuffling stakes in US technology names amid the blowout rally in the Magnificent Seven megacaps.

Most Read from Bloomberg

• Apple to Wind Down Electric Car Effort After Decadelong Odyssey

• How Much Wealth You Need to Join the Richest 1% Around the World

• Office Tower Deal for $1 Reveals Anxiety Among Longtime Buyers

• A Spike in Heart Disease Deaths Since Covid Is Puzzling Scientists

• Nvidia’s $70 Million Florida Supercomputer Hobbled by DeSantis Law

The $2.5 trillion manager trimmed holdings in stocks whose outperformance had markings of a “gentle bubble,” and raised stakes in some large semiconductor companies beyond the chip-making darling Nvidia Corp., Andy Budden, investment director for equities said at a briefing in Singapore.

The rejigging underscores how investors are increasingly questioning whether the cohort — comprised of Apple Inc., Microsoft Corp., Nvidia, Alphabet Inc., Amazon.com Inc., Meta Platforms Inc. and Tesla Inc. — can repeat last year’s performance, when an index of the seven stocks more than doubled versus the S&P 500’s 24% gain.

When “you look at all these other exciting industries where really important things are happening, both in the US and especially outside the US, you can say that for an active investor valuations are actually quiet attractive” in other parts of the market, Budden said.

Bedden’s view echoes some of his peers’. Some hedge funds have cut exposure to the Magnificent Seven group in the fourth quarter citing signs of extremes, while Cathie Wood’s exchange-traded funds have been paring exposure to Nvidia over many quarters. Bank of America Corp. strategists, including Michael Hartnett, argued in mid-February that a number of similarities between tech stocks now and previous bubbles suggest the Magnificent Seven is approaching — but not yet at — levels that may lead it to pop.

Capital Group has been selling its stake in Tesla for five straight quarters, while raising holdings in Microsoft, Meta and Taiwan Semiconductor Manufacturing Co. — which has a listing in the US — over two quarters through December, according to data compiled by Bloomberg.

Most Read from Bloomberg Businessweek

• Elon Musk’s Vegas Tunnel Project Has Been Racking Up Safety Violations

• Hong Kong’s Hottest New Store Is the Costco in Shenzhen

• There’s One Musk Endeavor That’s Not Doing So Great

• Transcript: Did Musk Buy Twitter to Keep His Movements Secret?

• The High Cost of Eating Out in America

©2024 Bloomberg L.P.