TLDR
- Nvidia is the most under-owned large-cap tech stock among active institutional investors, with a gap of -2.53% versus its S&P 500 weighting
- The under-ownership spread for mega-cap tech widened to -129 basis points in Q2, up from -125 basis points in Q1
- Sandisk is the most over-owned large-cap tech stock, with a gap of +2.30% above its S&P 500 weighting
- Bank of America sees Nvidia’s August 26 earnings as a key moment, with a fair value target of $267.97 and analyst target of $300+
- Nvidia revenue grew from $60.9 billion in fiscal 2024 to $215.9 billion in fiscal 2026, a 70.7% year-over-year increase
Active institutional investors are holding less Nvidia than its weight in the S&P 500 would suggest, according to Morgan Stanley’s latest large-cap ownership tracker. The gap between institutional ownership and S&P 500 weighting for mega-cap tech names widened to -129 basis points at the end of the second quarter, from -125 basis points at the end of the first quarter.
The data comes from 13F filings tracking the top 100 actively managed institutional portfolios across 28 large-cap tech companies.
Nvidia sits at the top of the under-owned list, with a gap of -2.53% between its index weighting and what institutions actually hold. That gap widened by 14 basis points quarter-over-quarter and is near all-time highs. Apple follows at -2.33%, then Microsoft at -1.54% and Amazon at -1.29%.
Morgan Stanley noted that institutional ownership of software names remains low. Companies like IBM, Oracle, Palo Alto Networks, ServiceNow and Adobe are among the least-owned relative to their index weights. The bank described this as a “clear institutional bias towards AI picks and shovels and bottlenecks.”
Sandisk Leads the Over-Owned List
On the other side of the ledger, Sandisk is the most over-owned large-cap tech stock with a gap of +2.30% above its S&P 500 weighting. That is about 1.5 times the premium seen in KLA, the next most over-owned name.
Sandisk’s institutional ownership has been climbing steadily since its re-listing in the first quarter of 2025. The premium has held even after the stock was added to the S&P 500 in the fourth quarter of last year. Lam Research and Western Digital also rank among the most over-owned names.
Morgan Stanley said there is a statistically meaningful relationship between low active ownership and future stock performance, with under-owned stocks tending to get a technical lift over time.
Nvidia Earnings on August 26
With Nvidia’s earnings set for August 26, Bank of America is framing the report as a key test. The bank has a fair value estimate of $267.97, which represents a 19.1% upside from its recent price of $225.01. Its analyst target is $320.
Revenue at Nvidia has nearly quadrupled over two fiscal years, rising from $60.9 billion in fiscal 2024 to $215.9 billion in fiscal 2026. Free cash flow climbed from $27 billion to $96.7 billion over the same period.
The company has committed $105 billion to OpenAI and is part of a $500 billion private capital consortium for AI infrastructure involving Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR.
Bank of America noted that if AI demand slows, the stock’s valuation at 24.9 times forward earnings and its exposure to non-investment-grade customers could become a liability. The August 26 call is expected to offer more detail on those off-balance-sheet commitments.
Nvidia’s net margin stands at 55.6% with a debt-to-equity ratio of just 6.6%.
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