America’s largest public pension by assets has rejiggered its tech investments, bulking up an already large bet on electric vehicles.
California Public Employees’ Retirement System increased investments in EV makers
Tesla
(ticker: TSLA) and
Rivian Automotive
(RIVN), bought more shares of software firm
Palantir Technologies
(PLTR), and sold some of its stake in
Oracle
(ORCL) in the third quarter. Calpers, as the pension is known, disclosed the stock trades, among others, in a form it filed with the Securities and Exchange Commission.
Calpers declined to comment on the investment changes. The pension, which manages more than $450 billion in assets, is searching for a new chief investment officer. It has had at least six CIOs over the past two decades, while Investment chiefs at the 25 largest U.S. pension systems stay in their roles an average of six to seven years.
Calpers bought 2.3 million more Tesla shares to end the third quarter with 9.0 million shares. Tesla stock doubled in the first nine months of 2023, after a 65% plunge in 2022, but so far in the fourth quarter, shares are down 14%.
In comparison, the
S&P 500 index
rose 12% in the first nine months of 2023, after a 19% drop last year. It has risen 3.0% this quarter.
Tesla’s third-quarter earnings, reported in October, came up short as price cuts have eaten into the bottom line. One analyst referred to it as a “mini-disaster,” but others are upbeat about Tesla’s self-driving software becoming a major business line for the company.
In contrast to Tesla, Rivian reported a stronger-than-expected third quarter in early November, and raised production guidance. The report, however, came after Rivian in October lowered its forecast of sales for the quarter, and said it would raise more funds by issuing convertible notes. Rivian CEO RJ Scaringe just got a raise in his base salary to $1 million a year from $650,000, the company announced in late August.
Rivian stock gained 32% in the first nine months of 2023, after cratering 82% in 2022. So far in the fourth quarter, shares are down 37%. Calpers bought 215,405 more Rivian shares to end the third quarter with 976,594 shares.
Palantir stock surged 150% in the first nine months of 2023, after a 65% dive in 2022. So far in the fourth quarter, shares are up 23%. The pension bought 758,727 more Palantir shares to end the third quarter with 3.5 million shares.
Palantir’s earnings reports have been strong this year. CEO Alex Karp told Barron’s in August that Palantir will become “the most important enterprise company in the world,” driven by its work on artificial intelligence.
In early September, a disappointing fiscal-first-quarter report and outlook sent Oracle stock tumbling for its worst single trading day in two decades. Later that month, at the annual Oracle Cloud World conference, the company reiterated a previous forecast for $65 billion in revenue by the May 2026 fiscal year, and that it received a $1.5 billion AI pact. Also, Oracle has been pitching itself to potential customers as a lower-cost cloud-computing solution.
Oracle stock rose 30% in the first nine months of 2023, wiping out a 6.3% drop in 2022. So far in the fourth quarter, shares are up 6.7%. Calpers sold one million Oracle shares in the third quarter to lower its investment to seven million shares.
Inside Scoop is a regular Barron’s feature covering stock transactions by corporate executives and board members—so-called insiders—as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.
Write to Ed Lin at [email protected] and follow @BarronsEdLin.
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