Mega-Cap Tech: Most Under-Owned in 17 Years
At end-Q4, mega-cap tech stocks were the most under-owned vs. S&P 500 weights in 17 years (Morgan Stanley, 13-F analysis of institutional ownership).
The blue diamonds in the chart below reflect the S&P 500 index weight of the stock while the reds indicate the actual ownership level.
MOST UNDER-OWNED (names on the top):
• Nvidia
• Apple
• Microsoft
• Amazon
• Broadcom
— the most profitable companies in the world with the strongest balance sheets, dominant market share and pricing power in their domains!
MOST OVER-OWNED (names at the bottom):
• SanDisk (memory chips)
• KLA Corporation (semiconductors)
• Salesforce
• IBM
• Oracle (debt fueled expansion)
HISTORICALLY, stocks with low active ownership relative to index weights tend to outperform, as positioning normalizes.