Nvidia Lags as Sandisk Shines in Tech Positioning Divergence
Morgan Stanley's latest analysis reveals that mega-cap tech stocks continue to be under-owned by active institutional managers relative to their S&P 500 weights. The gap between ownership and index weight widened in the second quarter to -129 basis points, with Nvidia leading the pack as the most under-owned large-cap tech stock at a -2.53% gap versus its S&P 500 weighting.
This trend is statistically significant, according to Morgan Stanley, which found that low active ownership relative to the S&P 500 is linked to subsequent stock outperformance after controlling for market cap and earnings beats. Nvidia's under-ownership has increased by 14 basis points on a quarter-over-quarter basis, reaching near all-time highs.
Outside of mega-cap tech, non-mega-cap stocks are over-owned by active managers, with a +39 basis points spread between institutional ownership and S&P 500 weights. Sandisk stands out as the most 'over-owned' large-cap tech name, with its institutional ownership exceeding its S&P 500 weighting by +2.30%.
Morgan Stanley notes that there is a distinct tilt in institutional positioning within the technology complex, with active manager ownership remaining high in memory and storage-related names but low in software stocks. This bias towards 'AI picks and shovels' or bottlenecks is seen as a continued clear institutional preference.