NVDA, TSLA, GOOGL: The ‘Smart Money’ Is Once Again Bullish on Stocks, Says State Street

Large institutional investors such as hedge funds and university endowments are once again bullish on U.S. stocks as the benchmark S&P 500 nears an all-time high.

State Street’s (STT) Institutional Investor Risk Appetite index shows that the so-called “smart money” is now embracing the stock market rally as the S&P 500 tries to remain above 6,000 and reach a fresh record. The S&P 500 index is currently at 6,021.13, which is just 2% below its all-time high reached on Feb. 19 of this year.

A majority of institutional investors were reducing risk from mid-March through late May and largely sitting on the sidelines during the current stock market rebound that began in April. But now, with the S&P 500 having climbed back above both its 50-day and 200-day moving averages, institutions are redeploying capital into the stock market, says State Street.

Stocks that are starting to see capital inflows from institutional investors include popular names such as Nvidia (NVDA), Tesla (TSLA), and Alphabet (GOOGL).

‘Melt-Up’

Now, with institutions coming off the sidelines, it could result in what’s known as a market “melt-up,” which happens when new money floods into the market, pushing stock prices higher. The S&P 500 is currently trading at 22.7 times consensus 2025 earnings estimates, which is expensive and requires conviction on the part of investors that multiples will expand further.

U.S. markets have enjoyed a strong rebound after being shaken by tariffs in April of this year. The American market is now back in positive territory for the year, even as trade and macroeconomic uncertainty remains high. Despite some short-term drops, the U.S. stock market has been in a bull rally since the fourth quarter of 2022, says State Street. STT stock has gained 2% this year.

Is STT Stock a Buy?

The stock of State Street has a consensus Moderate Buy rating among 12 Wall Street analysts. That rating is based on seven Buy, four Hold, and one Sell recommendation issued in the last three months. The average STT price target of $104.58 implies 5.94% upside from current levels.

Read more analyst ratings on STT stock