Morgan Stanley: Institutional ownership of Apple is rising

Apple’s weighting in the S&P 500 is growing even faster, says analyst Katy Huberty.

From a note to clients that landed on my desktop Tuesday:

Apple institutional ownership increased 52bps Q/Q to 3.5% exiting the December 2019 quarter, while Apple’s weighting in the S&P 500 grew by 73bps to 4.6%, implying the spread between Apple’s S&P 500 weighting and institutional ownership levels expanded to over 100bps vs. 82bps at the end of the September quarter.

At 3.5%, Apple’s institutional ownership at year end was at its highest level since 3Q12, while at 4.6% Apple’s year-end weighting in the S&P was the second highest on record in the last 11 years (3Q12 S&P weighting was 4.9%). And over the 2 quarters ending December 31st, 2019, Apple’s institutional ownership increased by 83bps, the strongest institutional accumulation of Apple shares over a 180-day period since 2012, which we believe reflects investors’ increasingly positive outlook…

In recent days, Apple stock has pulled back 7% due to the COVID-19 outbreak limiting the pace of iPhone production; however, we’re buyers on weakness as we view the near-term impact as more of a timing issue rather than outright supply/demand destruction, and see strong Services/Wearables growth and the upcoming 5G iPhone launch as catalysts to re-rate shares towards our $368 price target.

Maintains Overweight rating and $368 target. 

Apple institutional ownership huberty

Click to enlarge. 

My question: Yahoo Finance shows 62.7% of Apple shares held by institutions, yet Huberty has “institutional ownership” at 3.5%. What am I missing? I’ve asked the analyst.

Answer (from friends of the blog): 3.5% represents the share of all institutional holdings that are AAPL.


  1. Paul Brindze said:
    Just a guess, but perhaps she means that 3.5% of all institutional money is in Apple. In other words if all institutions are looked at as one giant investment pool, 3.5% of that pool would be invested in Apple.

    February 25, 2020
  2. Gregg Thurman said:
    3.5% represents the share of an institutions holdings that are AAPL.

    62.7% is the share of outstanding AAPL shares held by institutions. It wasn’t that long ago that institutions held just over 50% of all AAPL shares. So 62.7% is a major change, but not a major increase in the actual number of shares held by institutions. The increase can be directly attributable to Apple’s buyback program, which is sucking out retail holdings.

    Under these conditions I don’t see institutions adding much more AAPL to their respective portfolios. The buybacks are increasing their share of Apple, while price appreciation is increasing AAPL’s weighting within their respective portfolios.

    February 25, 2020
  3. David Emery said:
    Two observations from this chart:
    1. It’s clear that S&P 500 index funds don’t predominate ownership. (If so, then ‘current holding’ would be closer to ‘percentage of S&P’.

    2. The lack of institutional holdings in MSFT, compared to its S&P position, is surprising. I’m presuming the mark for ‘prior holding’ is underneath the mark for ‘current holding’, showing no real change in MSFT investment despite how much MSFT has grown in the S&P. Conversely, institutions seem to be more favorably inclined towards Oracle, that’s the stock with significant more institutional holdings vs S&P. (Frankly, I’d rather own MSFT, particularly after the recent articles on how badly Oracle is doing in cloud computing.)

    February 25, 2020

Leave a Reply