Tesla’s market share is down, but its valuation is still sky-high

Risky momentum stocks that retail traders piled into this year sputtered on Wednesday, throwing a bit of sand in the the market rally.

Recent retail favorites like Rocket Lab, Hims & Hers, Palantir, Oklo and SoundHound AI — all members of Goldman Sachs’ thematic basket of “high beta momentum stocks” — were in the red on the day, with little specific company news, suggesting the pullback is more about the market rethinking a broad-based trade, rather than expressing specific concerns about individual companies.

Shortly before 1 pm ET, the iShares MSCI USA Momentum Factor ETF was down 0.7%, its worst day since late August.

Why is momentum suddenly sputtering? That’s the tricky bit.

The current crop of momentum stocks tend to be stocks with very high valuation ratios — suggesting that traders buying them are betting their earnings will come far in the future, rather than any time soon. (That is, of course, if they’re not just buying them based on the fact that they’ve gone up a lot.) But it’s impossible to say exactly why the momentum trade is fizzling a bit today.

It could be that after a giant romp — Rocket Lab, for example, is up almost 50% over the last three months — these stocks just need a breather.

Canopy Growth rallied on Wednesday after its CEO, Luc Mongeau, disclosed an unplanned stock purchase on Tuesday.

Mongeau, who joined Canopy from Mars in January, bought 27,469 shares at CA$1.84. The buy is worth about US$36,259.

It has been a tumultuous time for cannabis stocks, as the market in Canada (where Canopy is located) stagnates and cannabis reform in the US has yet to move forward.

Robinhood Markets briefly touched a new all-time intraday high in early trading after the newly minted — and now top-performing — member of the the S&P 500 received some favorable write-ups from Wall Street analysts.

(Robinhood Markets Inc. is the parent company of Sherwood Media, an independently operated media company subject to certain legal and regulatory restrictions. I own stock as part of my compensation.)

Piper Sandler analysts highlighted momentum in the company’s prediction markets business thanks to the rollout of contracts on college and profession football, noting that the event contracts business was running at a $200 million annualized rate so far in September. They raised their price target on the shares to $140 from $120.

“Prediction Markets (aka event contracts) present significant upside opportunity for Robinhood,” Piper Sandler’s Patrick Moley wrote.

Elsewhere, Citi analysts raised their Q3 and full-year 2025 estimates and upped their price target on the shares to $135, but kept a “neutral” rating on the stock.

“While HOOD continues to see solid momentum across the platform, we believe the stock is pricing in much of the growth potential in our view. Given current valuations and where we are in the retail cycle (closer to the highs than the lows from an activity perspective from our viewpoint), we prefer to wait for a more reasonable entry point at present.”

The stock has clearly had a heck of a run.

Through yesterday’s close, Robinhood was up nearly 240% in 2025. Since it was added to the S&P 500 on Monday, it’s now the top performer among the blue chips, trouncing previous leaders Seagate Technology Holdings and Palantir.

UniQure rose more than 150% in early trading Wednesday after it released trial results that showed its experimental gene therapy for Huntington’s disease slowed its progression by 75% after three years.

The treatment, AMT-130, is a one-time treatment for Huntington’s, a genetic brain disease that degrades cognitive function and muscle control. There is currently no cure for the disease.

UniQure said it plans to submit the treatment for approval to the Food and Drug Administration in the first quarter of 2026, meaning it could become available to patients later that year. The company currently makes nearly all of its revenue from gene therapies that treat hemophilia.