Big Tech Stocks Show Bullish Signal Ahead of Earnings

Morgan Stanley has identified a bullish signal in some of America's biggest tech stocks, including Nvidia (NVDA), Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), and Google parent Alphabet (GOOGL). The bank notes that the gap between institutional ownership and S&P 500 weights for these stocks is at or near all-time highs.

Nvidia, in particular, stands out as the most 'under-owned' of the mega-cap stocks in Morgan Stanley's tech coverage. Its average weighting in institutional portfolios fell below 5% in the second quarter, while its weight in the S&P 500 index remains close to 8%. This gap suggests room for Nvidia's stock to rise.

The bank also notes that these companies are 'under-owned' relative to their importance and growth potential. Institutional positioning still favors AI infrastructure bottlenecks, with relatively high memory/storage and low software ownership.