America’s Largest Investor Dumps Apple Stock

By Douglas A. McIntyre Published May 28, 9:15AM EDT

Quick Read

America’s largest pension fund dumped Apple Inc. (NASDAQ: AAPL) stock in the first quarter.
Investors are concerned about Apple’s AI integration and tariffs.

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America’s Largest Investor Dumps Apple Stock — © Bet_Noire / Getty Images

The California Public Employees’ Retirement System (CalPERS) dumped Apple Inc. (NASDAQ: AAPL | AAPL Price Prediction) stock in the first quarter, according to SEC filings. It is America’s largest pension fund, managing $540 billion.

CalPERS did not give a reason, though it stated its overall intentions. “Calpers’ public assets investments are index-oriented and optimized using systematic and quantitative investment strategies, not driven by any single period’s events,” management wrote in a letter to Barron’s. That leaves investors to guess.

At the same time, it sold Apple but also bought Meta Platforms Inc. (NASDAQ: META), Advanced Micro Devices Inc. (NASDAQ: AMD), and McDonald’s Corp. (NYSE: MCD). It turned out to be a smart move. For example, Meta’s shares are up 10% this year, while the market is flat. Apple is down 29% and AMD is 5% lower.

The Trouble With Apple

What did CalPERS management see? Apple is behind the industry in adopting artificial intelligence (AI) for its products. Management has announced that it will not do so until next year. Apple has not found a China-based partner to launch its AI products in the world’s largest smartphone market. Smartphone penetration in China is nearly a billion, which is about three times the number in the United States.

Apple also faces sudden 25% tariffs on products it imports into the United States. President Trump was angered that as Apple moves production out of China, it will shift much of that to India. The company relies on these low-cost labor markets to maintain its profits. Making them in America is simply too expensive.

Apple investors have also been concerned about the future of the iPhone. Each generation of smartphones requires some degree of upgrade to attract new buyers. Those upgrades tend to be less and less impressive. A better camera and fast processor will eventually lose their charm.

Apple has been the world’s most valuable company based on market cap for most of the past four years. Those days may have come and gone.

Why Is No One Talking About Apple’s Long-Term Artificial Intelligence Plans?

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.