Morgan Stanley said Microsoft became the most underowned large-cap stock among institutional investors, a sign that a rebound may be coming. The Wall Street firm looked at new regulatory filings for the 15 largest technology companies under its coverage and then calculated each company’s average weighting in the top 100 active managers’ portfolios. Morgan Stanley believes that stocks tend to experience technical pull-ups when active holdings are well below their weighting in the S&P 500, and vice versa. Morgan Stanley said the gap between Microsoft’s weight in the S&P 500 and institutional holdings was 2.08% at the end of the third quarter, making it the lowest-owned large technology company. Microsoft shares have significantly underperformed the market this year, rising about 10%, while the S&P 500 index is up nearly 24% in 2024. External vendors have been slow to provide data center infrastructure to Microsoft. That means the company won’t be able to meet demand in the fiscal second quarter. After Microsoft, Apple was the second most underowned large-cap tech stock in the third quarter. The iPhone maker has also lagged the broader market this year, rising 18%. On the other hand, Morgan Stanley said the most-held technology stock at the end of September was software company Intuit, which may soon experience a technical decline. Shares of TurboTax tax preparation software maker Intuit fell more than 5% on Tuesday after reports that President-elect Donald Trump’s government efficiency team is considering creating a free tax filing app. By 2024, the stock is up just 3%. Adobe’s fourth-quarter performance guidance was worse than expected, causing the company’s stock price to plummet in September. The stock is down nearly 17% this year.
Morgan Stanley: Microsoft, Apple are the most underowned large technology stocks | Real Time Headlines
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