Group 1 - The core viewpoint is that the recent decline in megacap tech stocks, particularly after the AI correction, is beneficial for investors as it leads to more realistic valuations while still offering solid growth potential [1] - In February, the "Magnificent Seven" tech stocks experienced a decline of almost 7%, despite representing nearly 40% of the S&P 500 index, which remained flat for the month [1] - The article raises questions about whether the adjustment in stock prices was underanticipated or overanticipated, and discusses the importance of following capital movements to protect equity and capitalize on opportunities [1]

Core Viewpoint - Norges Bank Investment Management (NBIM) has modeled a severe "AI correction" scenario, predicting a 53% decline in equities and a 35% drop in the fund's total value, while fixed income is expected to rise by 10% [1][2]. Group 1: NBIM's Modeling - In the "AI correction" scenario, the failure of the capex boom to yield real productivity gains leads to significant equity losses [2]. - The model indicates that central banks would respond by lowering yields, which would partially offset the equity losses with gains in fixed income [2]. - The concentration of the market makes the current AI scenario more detrimental, resulting in a larger equity decline [2]. Group 2: Market Implications - NBIM is the largest single stock owner globally, holding approximately 1.5% of all listed equities [3]. - Prediction markets, such as Polymarket, estimate an 18% risk of a major sector crash related to the "AI bubble burst" by December 31, 2026 [4]. - The Norwegian model suggests that in a tech-led deflationary crash, policy support would lower yields, making bonds a viable offset again, despite criticisms of the "60/40 portfolio" [5].