Nvidia vs. SanDisk: Morgan Stanley Reveals Which AI Stock Is Crowded and Which Is Heavily Under-Owned

Nvidia (NVDA) and SanDisk (SNDK) are both benefiting from the AI boom, but institutional investors are taking very different positions in the two stocks. Nvidia is the most under-owned large-cap tech stock in Morgan Stanley's (MS) latest data, while SanDisk is the most over-owned. The data comes from Morgan Stanley's tracker of 100 actively managed institutional portfolios, which covers 28 large-cap technology stocks.

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Nvidia Is Under-Owned Despite Its Market Size

Nvidia's institutional ownership is 2.53 percentage points below its 7.61% S&P 500 (SPX) weighting, and the gap widened by 14 basis points in the second quarter. That gives Nvidia the widest ownership gap among the large-cap tech stocks in the group.

Apple (AAPL) follows with a 2.33% gap, while Microsoft (MSFT) and Amazon (AMZN) have gaps of 1.54% and 1.29%, respectively.

Nvidia's position stands out even more given its $5.45 trillion market cap. The company is now one of the largest stocks in the market, yet active managers still have less exposure to it than its weight in the S&P 500 would suggest.

Morgan Stanley's data also points to a possible advantage for stocks with low active ownership. Its analysis found that under-owned stocks have tended to outperform, while heavily owned stocks have tended to lag.

SanDisk Is the More Crowded Trade

SanDisk (SNDK) has taken the opposite path. Its institutional ownership is 2.30 percentage points above its 0.35% S&P 500 weighting, making it the most over-owned stock in Morgan Stanley's group.

KLA (KLAC) and Western Digital (WDC) also rank among the most over-owned names.

SanDisk's institutional ownership has climbed steadily since its relisting in early 2025. That ownership premium remained even after the company joined the S&P 500 later that year.

The difference between SanDisk and Nvidia is clear. Active managers hold nearly seven times SanDisk's S&P 500 weight, while they hold much less Nvidia than its index weight.

Morgan Stanley also found that active managers remain heavily invested in memory and storage stocks. Software stocks, including IBM (IBM), Oracle (ORCL), Palo Alto Networks (PANW), ServiceNow (NOW), and Adobe (ADBE), have much lower ownership.

NVDA vs. SNDK: Which Stock Do Analysts Prefer?

Wall Street remains bullish on both Nvidia (NVDA) and SanDisk (SNDK), with both stocks carrying a Strong Buy consensus. Nvidia has the higher average price target of $309.94, implying 37.74% upside. SanDisk's $2,211.76 average target points to 23.78% upside.

Nvidia therefore has the higher upside potential based on current analyst targets.