California Pension Giant Shifts Gears: Apple Out, Meta and AMD In Amid Trade Tensions

The California Public Employees' Retirement System, one of the largest pension funds in the United States, has recently made significant adjustments to its investment portfolio by selling off a substantial portion of its holdings in Apple Inc. Over the first quarter, the fund reduced its Apple shares by 5.1 million, bringing its total holding down to 34.7 million shares. This move comes amid Apple's declining stock performance, influenced by tariff-related challenges, with the tech giant's share price dropping 11% in the first quarter and another 12% in the second quarter.

This shift signals potential waning interest from major institutional investors in Apple, heightening concerns over the company's future prospects. The fund's divestment decision aligns with broader apprehensions about Apple's exposure to international trade tensions, exacerbated by recent comments from former President Donald Trump criticizing Apple's decision to build factories overseas rather than in the United States. Trump's threat to impose a 25% tariff on iPhones imported from foreign factories further pressured Apple's stock value.

In contrast, the pension fund has increased its stakes in other key companies, notably Meta Platforms, Advanced Micro Devices (AMD), and McDonald's. Specifically, it acquired 579,150 shares in Meta, now holding 5.5 million shares. Despite Meta's slight downturn of 1.6% in the first quarter, the stock has rebounded with an 8.8% rise in the second quarter. Meta's efforts to address rampant scams on its platforms demonstrate its proactive approach to enhancing user experience amid regulatory scrutiny.

The pension fund also added 325,180 AMD shares in the first quarter, raising its holdings to 3.3 million shares. Although AMD saw a 15% decline in the first quarter, its stock has since recovered, rising 7.4% since late March. AMD's strategic expansion in AI computing, alongside an enlarged stock repurchase program, reveals its proactive engagement in the AI domain, highlighted by a recent agreement to establish an artificial intelligence computing center in Saudi Arabia.

Furthermore, the fund purchased 494,290 shares of McDonald's, increasing its total shares to 3.5 million. McDonald's experienced a 7.8% stock increase in the first quarter, maintaining relative stability thus far in the second quarter. The fast-food company faces a mixed first-quarter performance, with a decline in U.S. customer traffic but was buoyed by successful promotional activities linked to the "Super Mario Bros" movie, boosting sales.