Investing.com — Morgan Stanley’s analysis of large-cap institutional ownership reveals shifting dynamics in mega-cap technology stocks.
While the under-ownership of these stocks relative to their S&P 500 weighting has decreased, Microsoft (NASDAQ:MSFT) remains the most under-owned mega-cap tech stock, while Meta Platforms (NASDAQ:META) and Intuit (NASDAQ:INTU) top the list of over-owned names, according to the bank.
Morgan Stanley (NYSE:MS) says the overall gap between mega-cap tech stocks’ institutional ownership and their S&P 500 weighting narrowed by 17 basis points (bps) during the third quarter of 2024 (3Q24), moving from -113 bps in 2Q24 to -96 bps by the end of 3Q24.
Yet, “MSFT remains the most under-owned mega cap tech stock we track,” with a gap of -2.08%, despite narrowing by 34 bps quarter over quarter (QoQ).
The bank says other mega-cap stocks are also under-owned but less so than Microsoft. Apple (NASDAQ:AAPL), the second most under-owned, is said to have widened its gap by 14 bps in 3Q24 to -1.86%.
Nvidia (NASDAQ:NVDA), by contrast, reportedly saw the most significant improvement, narrowing its gap by 72 bps to -1.4%, a marked shift from -2.12% in the prior quarter.
On the other hand, Morgan Stanley said Intuit (INTU) and Adobe (NASDAQ:ADBE) are among the most over-owned stocks, with institutional ownership exceeding their S&P 500 weighting by +0.60% and +0.37%, respectively.
CRM (Salesforce (NYSE:CRM)) is also said to appear over-owned, with a +0.32% gap.
Morgan Stanley concludes that while mega-cap tech under-ownership has diminished, Microsoft continues to offer a potential opportunity for investors, given its persistent under-representation relative to its S&P 500 weighting.
Conversely, they believe the over-ownership of names like Intuit and Adobe may signal concentrated positioning in these stocks.