Dr Hendrik Leber of ACATIS Investment KVG mbH is sounding the alarm: the current technology sector, driven by AI hype, is characterised by oversized investments that are causing serious concern among experienced investors. Although the development of artificial intelligence (AI) is considered real and justified, and the technology is changing the world – with an annual increase in performance by a factor of 5 to 10 – too much money is currently being pumped into this area, often through the use of leverage or loans.

The global stock market is essentially driven by a handful of tech stocks, the so-called Magnificent 7 to 10 (supplemented by Oracle and Broadcom). Companies such as Nvidia are achieving unimaginably high market values of around 4 trillion USD. Leber sees this concentration and the high valuations as reflecting the mistaken belief in eternal growth that already prevailed in previous economic bubbles. He draws historical comparisons, including the tulip crisis in the 17th century, the railway boom in the 19th century, the Nifty Fifty bubble of the 1970s (with stocks such as Kodak and Xerox) and the dot-com bubble at the turn of the last century. In these cases, the underlying technology was correctly assessed, but too much capital flowed into it. The conclusion: ‘What goes up must come down.’

Leber sees an acute problem in the aggressive accounting practices of large tech companies, which invest enormous sums in tangible assets (data centres). Amazon, Alphabet and Meta invested USD 126 billion in the first half of the year alone. Given the rapid pace of technological development, with new generations of computers coming onto the market every year, Leber considers the current depreciation periods (Alphabet: 11 years, Meta: 9 years) to be overly conservative. Calculations show that with a more realistic depreciation period of five years, the market value of these three companies would have to be USD 1.4 trillion lower.

Coreweave, a hardware-heavy AI stock that holds assets worth $16 billion but is valued by the stock market at an enterprise value of $90 billion, serves as a prime example of this overheating. The question Leber asks is: are these ‘tin cans’ worth five times their value just because they are on a company's balance sheet? He points out that this company is making losses, has a high customer concentration (71% at Microsoft) and yet its management received hefty bonuses totalling USD 329 million. Given the general market situation, in which free cash flow returns in the US have become unattractive and ACATIS' internal margin of safety indicator is very cautious, investors need to exercise caution.

Active Management in Response to Overvaluation

As the portfolio manager of the ACATIS Aktien Global Fonds (ISIN DE0009781740), Dr. Hendrik Leber has responded to the looming “dark clouds” on the horizon and actively made the portfolio weatherproof.

In view of the overvaluation of large hardware-heavy tech stocks, the fund management made significant sales and reduced the weighting of these stocks significantly from 4–6% previously to 2.5% to 3%. For example, the fund reduced its position in Palantir to 2.5% after the price-earnings ratio (P/E) rose towards 400 and competition is expected. Similarly, ACATIS reduced the weighting of Nvidia to 3.0% in anticipation that overinvestment cycles will lead to customer reluctance to buy and the share price will suffer as a result. The weighting of Microsoft was also reduced to 3.0%, despite the company's strong customer loyalty.

At the same time, ACATIS reduced its overall US allocation to 48%, partly due to concerns about tariffs, government debt and the weak US dollar exchange rate.

The fund specifically shifted the freed-up funds to more attractive regions and sectors. In Europe, ACATIS built up European mid-caps in the expectation that the huge spending packages agreed by the German government and the European armament programmes would actually be implemented and support the economy in the coming years. In addition, the fund increased its Japan allocation to 9% and expanded its China allocation (together with Taiwan and Hong Kong) to a total of around 9%, as Asia is considered young and dynamic and China will inevitably play its technological trump cards despite domestic political weaknesses.

The fund also strengthened its positions in specialised semiconductor suppliers and equipment manufacturers such as Celestica, Jenoptik, Infineon and Aixtron, as they play an indispensable role in e-mobility and specialised semiconductors. At the same time, ACATIS focused on AI users – i.e. companies that benefit from the efficiency gains offered by AI – and increased its holdings in stocks such as Teleperformance (call centres), Salesforce (distribution systems) and Uber, which uses AI for pricing and route planning.

As the healthcare sector is considered to be undervalued compared to the IT sector (market value of the largest IT stock at USD 4 trillion vs. USD 500 billion for the largest pharmaceutical stock), the fund strengthened its position in this area by purchasing stocks such as ResMed, Novo Nordisk, Novonesis, Veeva and Lonza. Finally, ACATIS further expanded its positions in the infrastructure sector, including through the purchase of Kontron, which provides solutions for the Internet of Things, such as connecting the European rail network.

Dr Leber emphasises that a passively managed ETF cannot afford this necessary restructuring in times of upheaval and that only active fund management can respond flexibly to the looming market weaknesses. He notes that, over long periods, only equities create real value, regardless of currency or interest rate problems.
 

The text is a summary of the multimedia conference on the ACATIS Aktien Global Fonds held on 21 October 2025.

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