Nvidia Becomes the Most Under-Owned Megacap Tech Stock
Morgan Stanley research shows Nvidia is now the most under-owned megacap tech stock compared to its weight in the S&P 500. Institutional investors hold only about 4.2% of Nvidia, while the company’s index weight is around 7.37%. This creates the widest gap among large tech companies, meaning many funds are missing out on one of the market’s strongest growth names.
Nvidia’s share price has already climbed more than 30% this year, far above the broader S&P 500’s gain. The rally is fueled by strong demand for its GPUs used in artificial intelligence, data centers, and cloud computing. With AI becoming a global trend, many analysts believe funds may eventually rebalance and increase their Nvidia holdings.
Forex Market Connection
For Forex traders, Nvidia’s position in the stock market is important. If institutional investors start adding Nvidia, it could lift US equity markets, giving support to the US Dollar. Stronger stock market confidence often attracts safe-haven demand for the Greenback, which can influence key forex pairs like EUR/USD, USD/JPY, and GBP/USD.
On the other hand, if investors remain cautious and under-weight Nvidia, global risk sentiment may weaken. That could encourage traders to shift towards riskier currencies, reducing demand for the dollar and increasing volatility in the Forex market.
Impact:
If funds increase Nvidia exposure, the US Dollar could strengthen with stock market gains. However, continued under-ownership might pressure risk sentiment, causing volatility across major Forex pairs.