US equity mutual funds are significantly underweight AI equities: Large-cap mutual funds are now ~1.75 percentage points underweight AI-exposed stocks versus their benchmarks, the largest underweight position on record. This excludes mega-cap names such as Amazon, AMZN, Broadcom, AVGO, Alphabet, GOOGL, Meta, META, Microsoft, MSFT, and Nvidia, NVDA. By comparison, in mid-2024, they were overweight AI-related names versus their benchmarks by 0.40 percentage points. This comes as AI-exposed equities now make up 13.0% of the average large-cap mutual fund portfolio, versus 14.8% in their respective benchmarks. By comparison, both metrics stood at ~6.5% in Q3 2024. Institutional portfolios are underexposed to the AI trade.