Markets
markets
Luke Kawa
7/15/25

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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Warner Bros. Discovery jumps after Wells Fargo ups price target on dealmaking buzz

Warner Bros. Discovery shares popped 7% Tuesday after Wells Fargo raised its price target on the media giant to $14 from $13 while keeping an equal-weight rating.

The bank’s optimism stemmed largely from the media giant’s potential for dealmaking. In June, WBD announced that it would split its operations into two companies, with the Streaming & Studios division (home to Warner Bros. Television, DC Studios, HBO, and Max) standing alone from the networks side (CNN, TNT Sports, and Discovery).

That separation could make the Streaming & Studios unit more attractive to buyers, the analysts said. They valued the segment at about $65 billion, which could translate to a takeover price north of $21 a share. Potential suitors range from Amazon and Apple to Sony and Comcast, though analysts flagged Netflix as the “most compelling” option despite its limited acquisition track record:

“While NFLX has historically not been acquisitive, [streaming and studios’] $12bn in annual content spend + library + 100+ acre studio lot offers a lot. It kickstarts a theatrical IP strategy, quickly scales video games and most importantly provides premium content to members.”

At Goldman Sachs’ Communacopia + Technology Conference this week, CEO David Zaslav also highlighted growing traction at HBO Max and hinted at future crackdowns on password sharing.

WBD shares are up 26% year to date, and up more than 93% over the past 12 months.

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Duolingo up on bullish note, hopes for a user rebound

Duolingo rose by the most in nearly a month after an analyst note painted a more bullish picture of the gamified language-learning company despite a dearth of news otherwise.

A quick check-in with analysts covering the stock on Wall Street found most of them otherwise flummoxed on the reason behind the uptick Thursday.

Some, however, suggested the rise may reflect optimism that the company has been able to reverse a monthslong downturn in daily active user metrics — a slump that set in after a social media backlash to a somewhat artless LinkedIn post from the company about its AI first strategy.

The bullish analyst note, published Thursday by Citizens JMP, suggested Duolingo could be a big beneficiary from a change to Apple’s rules governing its App Store driven by a ruling on a federal antitrust case against the company. The analysts wrote:

Given “Apple’s recent changes to U.S. App Store rules that allow developers to steer payments to the web where fees are similar to typical credit card fees rather than Apple’s 30% fee for in-app purchases and 30% fee on subscriptions for the first year and 15% thereafter, we expect mobile app companies including Duolingo, Life360, and Grindr Inc. to unlock meaningful cost benefits.”

At any rate, the next big event on the company’s calendar is its Duocon 2025 conference on Tuesday, where analysts are hoping to hear more hard information on all of the above topics.

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Jeep maker Stellantis surges as CEO says the automaker is in productive tariff talks with the US

Shares of Jeep and Dodge maker Stellantis are up more than 8% in Thursday afternoon trading, following comments from the automaker’s new CEO, Antonio Filosa, at a European auto conference.

On tariffs, Filosa said that Stellantis has had a “very productive exchange of ideas” with the Trump administration on the company’s manufacturing footprint and that the environment around the levies is “getting clearer and clearer.”

The US is Stellantis’ top priority, according to Filosa, and the company has taken efforts to turn things around in the market, where it’s struggled with sales in recent years. To fuel the turnaround, Stellantis is bringing back its popular Jeep Cherokee, which it discontinued in 2023.

As of 12:45 p.m. ET, Stellantis’ trading volume was at more than 140% of its average over the past 30 days.

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