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Mega-cap tech stocks Apple, Amazon and Google remained underowned in Q1 - Morgan Stanley

Published 05/23/2023, 12:25 PM
Updated 05/23/2023, 12:21 PM
© Reuters.  Mega-cap tech stocks Apple, Amazon and Google remained underowned in Q1 - Morgan Stanley

Morgan Stanley analysts told investors in a note Tuesday that the tech stocks under-ownership gap widened in the first quarter.

The analysts explained that each quarter the firm assesses ownership data for some of the largest cap tech companies in its coverage, with the data showing each company's average weight within the top 100 actively managed institutional portfolios relative to that same company's weighting in the S&P 500.

"While mega-cap tech stocks (AAPL, AMZN, GOOGL, META & MSFT) remained underowned vs. their S&P weighting, the underownership gap widened to 83bps exiting 1Q23 vs. -49bps in 4Q22, the first narrowing of this gap in 5 quarters," they wrote.

As of Q1 2023, many large-cap technology stocks remained under-owned relative to their weighting in the S&P 500, he added, with MSFT, AAPL, AMZN, NVDA and GOOGL the most under-owned of the stocks Morgan Stanley tracks.

"After 5 consecutive quarters of the under-ownership gap narrowing, 1Q marked the first quarter of this gap widening," said the analysts.

For the rest of the large-cap tech stocks outside of the names mentioned above, they said the spread between institutional ownership and the S&P 500 "was +22bps exiting 1Q, relatively unchanged vs. +23bps at the end of 4Q22."

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