Momentum’s Air Pocket: From Speculative Sizzle to Mega-Cap Stall

First, high-flying speculative stocks took a nosedive. Then gold lost some of its shine. Now, the megacap leaders driving the momentum trade are beginning to wobble.

The iShares USA Momentum Factor ETF (MTUM) — built around the stocks with the strongest risk-adjusted performance over the past year and six months — slipped nearly a full percentage point behind the S&P 500 yesterday, marking seven consecutive sessions of underperformance, its longest streak since late 2023.

Nuclear-AI darlings took the brunt

The “nuclear for AI” cohort slid hard: Oklo (OKLO), Nano Nuclear Energy (NNE), and Centrus Energy (LEU) all weakened as retail flows flipped from buy-the-dip to hit-the-bid. JPMorgan’s Arun Jain estimated retail traders dumped ~$24 million of Oklo stock in the first 90 minutes of trading. Sherwood News

NNE specifically has been under pressure in recent sessions, with multiple down days and negative headlines underscoring the reversal. AAII

Quantum heat cools off

After a monster run, quantum names reversed: Rigetti (RGTI) and D-Wave Quantum (QBTS) saw sharp declines as momentum unwound across the board. Bloomberg and other market wraps flagged persistent selling across the group. Bloomberg

Why MTUM matters here

MTUM systematically owns U.S. stocks with the strongest 6- and 12-month risk-adjusted price trends. When leadership narrows or flips, the fund can lag sharply before rebalancing catches up—exactly what we’re seeing now.

The likely spark: earnings “jump scares”. Two MTUM constituents delivered market-moving disappointments:

Netflix (NFLX): Record revenue, but a surprise ~$600M Brazil tax expense walloped EPS, making NFLX the S&P 500’s biggest loser post-print. Shares fell ~6–10% across sessions. Financial Times

GE Vernova (GEV): Strong orders/backlog, but guidance around wind and an EPS miss triggered a steep selloff (intraday down ~9%), reinforcing the market’s hair-trigger on richly valued “electrification” plays. Reuters

The takeaway

This looks like a classic momentum reset rather than a broad growth collapse. Crowded leaders—especially those priced for perfection—are proving hypersensitive to any narrative crack. Netflix’s tax hit and GE Vernova’s wind caution were enough to prick sentiment across adjacent “AI infrastructure” and energy-transition baskets. As in Q1, when a single Walmart outlook shocked the tape, one or two marquee disappointments can catalyze a wider de-risking when positioning is tight.