Heat the oven to 350°F (175°C). Thoroughly grease and flour a 10- to 12-cup Bundt pan, making sure to coat the center tube, deep grooves, and all corners.

In a large bowl, combine the cake mix and instant pistachio pudding mix. Add the sour cream, vegetable oil, water, and eggs, then beat on low speed until combined.

Beat the batter on medium speed for about 1 to 2 minutes, scraping down the bowl as needed. Fold in the finely chopped pistachios and add 3 to 5 drops of green food coloring if desired.

Pour the batter evenly into the prepared Bundt pan and smooth the top. Bake for 45 to 55 minutes, checking at 45 minutes, until a toothpick inserted into the thickest part comes out clean or with a few moist crumbs.

Cool the cake in the pan for 10 to 15 minutes. Invert it onto a rack and allow it to cool completely before glazing.

Whisk the powdered sugar, milk or water, and vanilla extract until smooth. Drizzle the glaze over the cooled cake and sprinkle with the chopped pistachios.