When Nvidia reports earnings on Wednesday, markets will hang on every word. Analysts expect revenue of about $46 billion (€39.7 billion), up more than 50 per cent, year on year, with investors watching the rollout of its new Blackwell chips, the resumption of China sales, margin recovery and hyperscaler demand.
However, the real story may lie in who doesn’t own it. Despite big gains – even after the recent pullback, Nvidia is up over 25 per cent in 2025, and by 1,300 per cent over the past five years – it is the most under-owned large-cap tech stock among institutional investors.
Nvidia’s $4.3 trillion market capitalisation accounts for 7.4 per cent of the S&P 500, says Morgan Stanley, but the average active fund holds just 4.2 per cent.
It says other mega-caps, including Microsoft, Apple and Amazon, are also underowned, but not as much as Nvidia.
Investor reluctance reflects unease at Nvidia’s valuation. Its forward price-earnings (PE) ratio has climbed to 39.2 – the highest in more than a year, up from 24.8 in April and 28.1 in January.
Trading at almost 30 times sales, valuation suggests little room for error. Nvidia looks much cheaper when one adjusts for growth, but less so than before: its PEG ratio has climbed from 0.86 in January to 1.7 today.
Still, underowned giants are often pulled higher as institutions play catch-up, says Morgan Stanley. Bulls will hope another blockbuster report leaves Nvidia holdouts with little choice but to pay up.
