Nvidia or Sandisk? BofA reveals which stock is under-owned and which is crowded

Morgan Stanley’s latest institutional ownership tracker suggests mega-cap technology stocks remain under-owned relative to their S&P 500 weights, and the ownership gap widened in Q2 to -129 bps from -125 bps in Q1. Nvidia stands out as the most under-owned large-cap tech name, with its gap widening to -2.53%, while Apple, Microsoft, and Amazon also remain under-owned. Outside the seven mega-cap names, most other large-cap tech stocks are modestly over-owned, especially hardware and memory/storage names like Sandisk, Lam Research, and Western Digital. The report also highlights a persistent institutional preference for AI infrastructure “picks and shovels” and bottlenecks, while software names such as IBM, Oracle, Palo Alto Networks, ServiceNow, and Adobe are relatively under-owned. Morgan Stanley argues that low active ownership versus S&P 500 weight has historically correlated with better future performance, implying a potential tailwind for under-owned names and relative pressure on crowded holdings.