Nvidia's Underownership Sets Up Potential Buying Fuel

Nvidia NVDA is facing an interesting positioning setup in the market, according to Goldman Sachs data. The company remains the largest AI stock that U.S. large-cap mutual funds are reluctant to fully own, with a roughly 100 basis point underweight position.

This means that if Nvidia continues to perform well and deliver strong earnings results, institutional managers may be forced to increase their exposure to the stock in order to catch up with its performance.

Goldman Sachs' data also shows that other major AI-related stocks are underweight or only slightly overweight. For example, Advanced Micro Devices AMD is underweight by roughly 60 basis points, while Alphabet GOOGL and Microsoft MSFT are underweight by about 70 and 50 basis points, respectively.

The notable exception is Micron Technology MU, where large-cap mutual funds are overweight by approximately 40 basis points. This suggests that fund managers are already favoring parts of the AI supply chain where memory shortages and pricing strength can translate more directly into earnings.