Microsoft, Apple are the most under-owned megacap tech stocks: Morgan Stanley
Microsoft emerged as the most under-owned megacap stock among institutional investors, signaling a rebound could be on the horizon, according to Morgan Stanley. The Wall Street firm looked at new regulatory filings from the 15 largest tech companies in its coverage and then figured out each firm’s average weighting within the top 100 actively managed institutional portfolios. Morgan Stanley thinks that stocks tend to experience a technical pull higher when active ownership is much lower than their weightings in the S & P 500, and vice versa. The gap between Microsoft’s S & P 500 weighting and institutional ownership stood at 2.08% by the end of the third quarter, making it the most under-owned Big Tech name, Morgan Stanley said. Shares of Microsoft have underperformed the broader market significantly this year, up about 10% versus the S & P 500’s nearly 24% advance in 2024. The company recently released a forecast that called for slower growth than expected. Outside suppliers are late in delivering data center infrastructure to Microsoft. This means the company won’t be able to meet demand in the fiscal second quarter. After Microsoft, Apple is the second-most under-owned megacap tech stock coming out of the third quarter. The iPhone maker has also lagged the broader market this year with an 18% gain. On the flip side, the most over-owned tech stock at the end of September is software company Intuit , which could see a technical downward pull soon, according to Morgan Stanley. Intuit, which makes the TurboTax tax filing software, saw its shares fall more than 5% on Tuesday after a report said President-elect Donald Trump ‘s government efficiency team is considering creating a free tax filing app. The stock is up just 3% in 2024. Adobe is another tech name embraced by institutions. The company’s shares took a beating in September after Adobe released fourth-quarter guidance that came up short. The stock is down nearly 17% this year.