Markets
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Luke Kawa

The biggest momentum ETF has lost its mojo by exiling the world’s only $4 trillion company

If you asked random people on the street — even those with only a passing interest in the stock market — what the most important and successful stock in the US has been lately, I’m guessing you’d get one answer that would stand head and shoulders above the rest:

SiessNvidia

It’s Nvidia, duh. The world’s only $4 trillion market cap company. And it got to be that way by being a stock that went up, a lot, very consistently. In other words, it was an obvious momentum stock.

Yet, when the iShares MSCI USA Momentum Factor ETF rebalanced its portfolio near the end of May, the chip designer was excluded from the ETF for the first time since Q1 2023. Nvidia had been in the top six holdings of the fund from Q2 2023, when its blockbuster earnings in May unofficially kicked the AI boom into high gear, through Q1 2025. And now, it’s gone.

The fund clearly is missing out on this loss of a former stalwart: quarter to date, Nvidia is up 8% in breaching the $4 trillion threshold, with its latest rally spurred by the easing of AI chip sales to China, while MTUM is down 1%.

MTUM’s constituents are determined by an algorithm that selects the stocks with the best risk-adjusted price momentum. It cannot be denied that there was a long period of time when Nvidia simply failed to demonstrate much momentum, and did experience some massive volatility. Shares were basically flat from late October 2024 through late June 2025, amid major drawdowns fostered by the DeepSeek freak-out and meltdown in momentum stocks that slightly preceded the subsequent tariff threats and announcements.

It’s easier to be correlated with something when you’re a part of its whole. And Nvidia is charting a distinctly different path now that it’s been cast out of the group.

The 21-session correlation between the daily swings in Nvidia and MTUM has dropped off monumentally, back down to (you guessed it) the lows it saw around the time it was last being added to the fund.

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Tasha Matsumoto
3h
Stocks continue to climb as surprise drop in private payrolls solidifies rate cut expectations

Despite a lackluster performance in many megacap tech names, all major US indexes climbed higher Wednesday.

CHICAGO, IL - MARCH 05: Benny, the mascot for the Chicago Bulls entertains during a break between the Bulls and the Boston Celtics at the United Center on March 5, 2018 in Chicago, Illinois.
markets
Matt Phillips

Seagate, Western Digital stumble amid reports of customer resistance to AI

Hard disk drive makers Seagate Technology Holdings and Western Digital slumped Wednesday following a report from The Information that Microsoft is facing pushback from software clients who don’t want to pay more for AI-optimized products.

Microsoft contested the report, issuing a statement saying it hadn’t lowered sales quotas or targets. But the story hit squarely on the core issue facing the market right now: whether AI will ever produce enough revenue to pay for the massive investments hyperscalers are making.

As the tumble for hard disk makers shows, this is a market-wide issue. Share prices of hard disk makers have boomed amid expectations that the soaring demand for data storage related to AI investment will juice sales of these cheap storage devices for the foreseeable future.

Seagate and Western Digital are still the second- and third-best-performing stocks in the S&P 500 this year, with gains of roughly 200% and 250%, respectively.

markets
Luke Kawa

Micron announces exit from consumer business to focus on AI demand

With a lot of AI mouths to feed amid a supply crunch for memory chips, Micron has made the decision to exit its consumer chip business (which goes by the brand name “Crucial”).

“The AI-driven growth in the data center has led to a surge in demand for memory and storage. Micron has made the difficult decision to exit the Crucial consumer business in order to improve supply and support for our larger, strategic customers in faster-growing segments,” said Sumit Sadana, EVP and chief business officer.

Memory chip prices have been surging thanks to demand from the AI boom, with South Korean memory giant SK Hynix saying that it’s already sold out all of next year’s production.

Per the press release, Micron will cease shipments of Crucial-branded items at the end of February 2026.

The product line has been a bit of a misnomer for the memory chip specialist as of late. Sales of Crucial-branded products fall under its mobile and client business unit, and the brand enjoyed a 25% jump in revenues year on year as of its most recent quarter. While impressive growth, that pales in comparison to the more than 200% surge in revenues for its cloud memory business unit, which focuses on high-bandwidth memory chip sales to hyperscalers.

Operating margins in the mobile and client business unit were 29% in its most recent quarter, compared to 48% for the cloud-centric division.

markets
Max Knoblauch

Boeing falls as FTC requires it to divest Spirit AeroSystems assets to complete its $8.3 billion merger

The FTC said on Wednesday that the $8.3 billion merger between Boeing and its key supplier, Spirit AeroSystems, cannot proceed unless Boeing significantly divests Spirit assets.

Boeing shares fell more than 2% on the FTC’s proposed order, which said that Boeing should divest Spirit businesses that supply aerostructures (wings, doors, etc.) to rival Airbus. The assets, including personnel, will be divested to Airbus, the FTC statement said.

The moves would resolve antitrust allegations that Boeing’s acquisition of Spirit — which was spun out of Boeing in 2005 — would allow the plane maker to raise costs on Airbus or degrade its access to certain necessary parts. Boeing, the FTC alleged, could also have the ability to see sensitive information about its competitors.

The public now has 30 days to submit comments on the proposed order.

FTC Requires Boeing to Divest Several Spirit Assets to Proceed with Merger

The moves would resolve antitrust allegations that Boeing’s acquisition of Spirit — which was spun out of Boeing in 2005 — would allow the plane maker to raise costs on Airbus or degrade its access to certain necessary parts. Boeing, the FTC alleged, could also have the ability to see sensitive information about its competitors.

The public now has 30 days to submit comments on the proposed order.

markets
Luke Kawa

D-Wave Quantum rises as Evercore ISI initiates with “outperform” rating, calling it a “leading play” in industry


D-Wave Quantum is up big on Wednesday after Evercore ISI initiated coverage on the annealing quantum specialist with an “outperform” rating and price target of $44, implying upside of nearly 96% from where the stock closed on Tuesday.

Analyst Mark Lipacis called it a “leading play as the computing industry sees its next Tectonic Shift to a Quantum Computing Era,” highlighting three key things the firm offers to investors:

  1. First quantum company with commercial revenues;

  2. It’s a full-stack play, with services, software, and hardware;

  3. And the ample cash hoard to develop its technology and potentially pursue M&A opportunities.

After its Q3 earnings report, CEO Dr. Alan Baratz told us that bolstering the firm’s gate model system (as opposed to its annealing system, which is its strength) was a priority.

“With the roughly $830 million in the bank, we have the resources to be able to invest more in that program, both internal investment and through acquisition,” he said. “We have one customer who has said, when you have a gate model system, I want it. So it expands our TAM [total addressable market], and it allows us to further grow our revenue.”

While commercial opportunities for publicly traded quantum computing companies have been relatively limited to date, particularly outside of D-Wave, Evercore’s Lipacis argues it’s not too early to invest in the industry.

“Each successive Tectonic Shift in Computing surprised investors with new workloads, and created stock performance of 100x-to-1,000x for full-stack ecosystem leaders,” he wrote. “To be clear, with over 40 quantum companies competing and no clear-cut leaders, we expect a shakeout, but to capture full-alpha, history shows you need to get in 10-years before the Tectonic Shift actually happens.”

He thinks that D-Wave will capture 12% of a quantum computing market that BCG estimates will be between $15 billion to $30 billion by 2035.

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