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Pimco: Funds Begin Paring back Holdings in 'Magnificent 7', Rotating Capital Into Asian Markets; CN Financial and Healthcare Favored
2026-09-04 17:10:04 Pimco fund manager Emmanuel Sharef said the next winners of the AI boom will not arise from large US tech companies, but from Asian equipment suppliers, China financial and healthcare stocks. As surging AI spending increases corporate debt burdens and affects earnings prospects, the appeal of many of the largest US tech companies has faded. Sharef said Pimco is reducing holdings in most hyperscale cloud service providers and most of the "Magnificent 7" owing to alarmingly high valuations, believing investors do not necessarily need to hold the most expensive stocks to capture specific themes or market trends. Meanwhile, Pimco remains Overweight on Asia because of strong earnings growth in the region and is investing in downstream companies within the AI supply chain. He added that the massive scale of AI capex implies substantially higher demand for chip components, cooling equipment, cable interconnections, optical equipment, power suppliers, construction equipment, metals and all materials required for data center construction. Besides, Pimco was also optimistic about the biotechnology and life sciences sectors. He said the largest sector allocation of Pimco in the China market is financial stocks because of their relatively lower volatility. At the same time, he is also bullish on materials stocks. ~ AASTOCKS Financial News Website: www.aastocks.com | |