Nvidia(US:NVDA) Hua Er Jie Jian Wen·2025-08-20 03:13Core Insights - Nvidia has become the most underweighted large-cap tech stock among institutional investors despite being the highest market cap company globally, indicating a significant disconnect between its market position and actual holdings [1][3] - The weight of Nvidia in the S&P 500 index is 7.37%, while its average holding in institutional investor portfolios is only 4.2%, resulting in an underweight of 2.41 percentage points, the largest among 15 major tech companies tracked by Morgan Stanley [1][3] - The stock has surged nearly 1300% over the past five years due to the AI boom, but geopolitical and supply chain risks have made some investors cautious about increasing their positions [1] Institutional Investor Behavior - Other large tech stocks like Microsoft, Apple, and Amazon also show underweight positions, but to a lesser extent: Microsoft by 2.39 percentage points, Apple by 1.66 percentage points, and Amazon by 1.40 percentage points [3] - Conversely, some tech stocks are in an overweight position, such as Intuit by 0.83 percentage points, Oracle by 0.32 percentage points, and Dell by 0.25 percentage points [3] Future Performance Expectations - Historically, underweighted stocks tend to perform better over time as investors gradually increase their holdings to match their index weight, indicating a statistically significant relationship between low active holdings and future stock performance [3] - Despite the underweight position, Morgan Stanley analysts remain optimistic about Nvidia's fundamentals, citing strong indicators of computing demand and easing supply chain constraints [3] - Nvidia's stock price has increased by 35% over the past year, outperforming the S&P 500 index by approximately 10%, driven by robust demand for its GPUs used in AI and cloud applications [3]