Sandisk Stock Drops Amid Institutional Over-Ownership

Sandisk stock plummeted by 8.1% on Tuesday morning, but Morgan Stanley's latest report may not be as negative as it seems.

In a note to investors, Morgan Stanley pointed out that several tech stocks, including Nvidia and Sandisk, are 'over-owned' by institutions, with large investors holding about 2.3% more Sandisk stock than its weighting in the S&P 500 index.

This is not necessarily bad news for Sandisk, as it may indicate that institutional investors see the company's stock as undervalued and ripe for a growth spurt.

In fact, most analysts expect Sandisk's profits to soar by 40% annually over the next five years, making its current price of about 22 times earnings seem reasonable if not cheap.