For example,
Nvidia’s earnings could make break:
A sudden tumble in the high-flying factor names could be paving the way for a reversal. Moreover, say Goldman Sachs traders, putting the spotlight on ETFs tied to the factor ahead of NVIDIA Corp.’s NVDA closely followed earnings next week.
Nvidia’s quarterly results could decide the fate of momentum stocks. However, the ETFs that track them, after a two-week slide put the high-flying trade under pressure.
Nvidia is down more than 4% in the past week. Similarly, Track its prices live, here.
Goldman’s High Beta Momentum basket. However, which bundles together the latest winners in the market and shorts losers, fell 13% from Aug 6 to Aug 19, its fourth drop of over 10% this year, as reported by Bloomberg. Moreover, Historically, these sharp declines have tended to reverse rapidly from such a point. nvidia’s earnings could make break Goldman Sachs pointed out that in previous instances when the basket declined 10%. more in five days, it recovered during the next week, 80% of the time, with median returns of 4.5% during the next week and over 11% over the subsequent month.
The ETF Angle – Nvidia’s earnings could make break
Momentum-based ETFs such as the Ishares MSCI USA momentum factor ETF Mtum. Invesco Dorsey Wright Momentum ETF PDP offer investors direct exposure to the same high-octane growth stocks that dominate Goldman’s basket, the likes of Nvidia, Advanced Micro Devices Inc AMDand Palantir Technologies Inc Fungus. That makes the funds especially sensitive to whether Nvidia’s earnings next week can revive enthusiasm in AI-related equities. deepen the selloff.
ETFs that follow the momentum factor have also experienced uneven returns in 2025. with several abrupt swings related to the nvidia’s earnings could make break AI trade. The latest rout also questions whether these vehicles can be used as tactical trades or not long-term positions.
What’s Driving The Sell-off
Losses in AI leaders such as Palantir. AMD, Super Micro Computer Inc SMCIand even Nvidia, pulled the basket down. These formerly crowded trades now face profit-taking, high valuations, and nervousness about China’s competitive squeeze.
The Risk To Rebounds
Although Goldman’s traders point out that momentum has previously rebounded following steep drops. some warn that the factor has been erratic throughout the year. Bloomberg Intelligence’s Christopher Cain said that high-momentum stocks have some of the most costly valuations relative to low momentum. in history.
The last catalyst will depend on Nvidia’s earnings next week. As the heaviest weight in the S&P 500. Nasdaq 100, the chipmaker’s report could make or break whether momentum ETFs produce another record rebound — or nvidia’s earnings could make break this is merely the beginning of a more significant correction.
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