A Bullish Signal Could Point to Gains Ahead for These Big Tech Stocks

Key Takeaways

• A gap between institutional ownership and S&P 500 weights in some of America’s biggest tech stocks could signal potential gains ahead, according to Morgan Stanley.

• Nvidia is the most “under-owned” among the tech stocks in the bank’s coverage.

• The AI chipmaker is set to report earnings after the closing bell next Wednesday.

Some of America’s biggest tech stocks have been flashing a bullish signal lately, according to Morgan Stanley. 

A growing gap between institutional ownership of the stocks and their benchmark weights could point to gains ahead, based on the bank’s historical analysis, Morgan Stanley analysts told clients in a note this week. Stocks “appear to experience a technical pull higher when active ownership is much lower than the market, and vice versa,” the analysts wrote.

For Nvidia (NVDA), which saw its average weighting in institutional portfolios fall below 5% in the second quarter, lagging its close to 8% weight in the benchmark S&P 500 index, that gap is near all-time highs, suggesting room for the stock to rise. 

Nvidia is the most “under-owned” of the mega-cap stocks in the bank’s tech coverage, Morgan Stanley wrote, followed by Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), and Google parent Alphabet (GOOGL).

The most “over-owned” stock in the bank’s coverage is Sandisk (SNDK), the flash memory maker that’s seen its stock soar nearly 600% year-to-date, making it the best-performing stock in the S&P 500 for 2026. 

“Institutional positioning in large-cap tech still favors AI [infrastructure] bottlenecks, with relatively high memory/storage and low software ownership,” wrote Morgan Stanley. 

Nvidia is due to report earnings after the closing bell next Wednesday, with the chipmaker at the heart of the AI boom widely expected to deliver strong results. Its stock, which lost 1% Wednesday, has slipped 8% from its May highs after a broader pullback in the AI trade in recent weeks. 

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