TLDR
- Nvidia is the most underowned megacap stock despite being the world’s most valuable company, with institutional investors holding 4.2% vs its 7.37% S&P 500 weight
- The company is developing a new B30A AI chip for China based on Blackwell architecture, pending US regulatory approval
- Nvidia reported $44.1 billion in revenue last quarter, up 69% year-over-year, with $45 billion forecast for next quarter
- Stock has risen 83% since April low and is up 33% in 2025, outperforming the S&P 500’s 10% gain
- Earnings announcement scheduled for August 27, 2025, with high expectations for beating analyst estimates
Nvidia sits in an unusual spot. The chipmaker became the world’s most valuable company, yet institutional investors remain cautious about loading up on shares.
Morgan Stanley analyst Erik Woodring found that Nvidia is now the most under-owned large-cap tech stock. The company’s market value makes up 7.37% of the S&P 500 index. But institutional portfolios only hold 4.2% on average.
This creates an adjusted underweight of 2.41 percentage points. The gap is the largest among 15 major tech companies that Morgan Stanley tracks.
The disconnect shows Nvidia’s unique position in markets. Its stock has climbed nearly 1,300% over the past five years thanks to AI demand. But rapid growth and geopolitical risks have made some investors hesitant.
History suggests underowned stocks often get pulled higher over time. Investors gradually increase holdings to match index weights. Morgan Stanley found a statistically proven relationship between low active ownership and future stock performance.
Other tech giants face similar situations but not to Nvidia’s extent. Microsoft shows an underweight of 2.39%. Apple comes in at 1.66% underweight. Amazon sits at 1.40% underweight.
Meanwhile, some tech stocks are overowned. Intuit leads at +0.83% overweight. Oracle follows at +0.32%. Dell rounds out the top three at +0.25%.
New China Chip Development
Nvidia is working on a new AI chip for Chinese customers. The B30A chip uses the latest Blackwell architecture. It aims to outperform the currently available H20 chip in China.
The new chip offers about half the computational power of Nvidia’s flagship B300. This balance tries to meet Chinese demand while staying within US export restrictions.
Nvidia plans to send samples to Chinese customers soon. The company still needs US regulatory approval first. Trade tensions between the US and China continue to shape chip export policies.
Strong Financial Performance Continues
Nvidia reported impressive numbers in its most recent quarter. Revenue hit $44.1 billion, up 69% from the same period last year. AI infrastructure demand drove most of the growth.
The company’s Blackwell series rollout has been successful. Data centers and automotive partnerships contributed to strong results. These gains helped offset some impact from Chinese export restrictions.
Nvidia forecasts $45 billion in revenue for the next quarter. Growth is expected to continue despite ongoing global trade uncertainties. The guidance shows confidence in sustained AI demand.
Wall Street analysts remain bullish on the stock. Morgan Stanley and others have raised price targets recently. They cite strong fundamentals and leading market position in AI chips.
The stock has performed well this year. Nvidia shares are up 33% in 2025. This outpaces the S&P 500’s 10% advance over the same period.
Nvidia hit a 52-week low in April but has rebounded strongly. The stock climbed 83% since that low point. Recent sessions saw some profit-taking as investors await Federal Reserve signals.
Earnings are scheduled for August 27, 2025. Expectations are high for beating analyst estimates. Recent export opportunities in China and strong AI GPU demand support optimistic forecasts.
Cloud computing firms continue boosting capital spending. This benefits Nvidia’s dominant position in AI accelerators. Demand for graphics processing units remains exceptionally strong with no signs of slowing.
Supply chain constraints around rack-scale solutions are easing. The US government is advancing export license approvals for China. These factors support continued revenue growth.
Nvidia reported $44.1 billion in revenue last quarter, up 69% year-over-year, with the company forecasting $45 billion for the next quarter while developing a new B30A AI chip for China pending US regulatory approval.
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