World’s largest wealth fund says there’s ‘clearly a lot of froth’ in the tech sector right now

The chief executive of Norway's gigantic sovereign wealth fund on Tuesday said there is "clearly a lot of froth" in the tech sector, suggesting that whether there is too much of it could depend on this week's tech earnings bonanza.

U.S. tech behemoths including Tesla, Meta, Microsoft and Google parent Alphabet are all scheduled to release results in the coming days.

Big Tech's earnings, which kicks off with Elon Musk's EV company Tesla on Tuesday after market close, follow a 5.5% fall for the Nasdaq Composite last week.

The slump of the tech-heavy index reflected its worst weekly performance since November 2022, with computer chipmaker and artificial intelligence darling Nvidia leading the losses.

"Using social psychology in investing is very, very interesting, because we look at how you make decisions, how you [make] unbiased decisions, your appetite towards risk and so on," Nicolai Tangen, CEO of Norges Bank Investment Management (NBIM), told CNBC's "Squawk Box Europe" on Tuesday.

"If I look at what we can read out of the current market, I would say that there is clearly a lot of froth within the technology sector. Whether it is too much or not, that is unclear — and I guess we will get the answer later in the week when we get all these results coming through."

NBIM manages the so-called Norwegian Government Pension Fund Global. The world's largest sovereign wealth fund, which was valued at 17.7 trillion kroner ($1.6 trillion) at the end of March, was established in the 1990s to invest the surplus revenues of Norway's oil and gas sector.

To date, the fund has put money in more than 8,800 companies in over 70 countries around the world, making it one of the largest investors across the globe.

Norway's wealth fund on Thursday