Wall Street’s hottest trade may be losing steam. The S&P 500 momentum factor has suffered one of its steepest three-week sell-offs on record, according to Goldman Sachs data shared by investment strategist Mike Zaccardi, marking one of the sharpest momentum reversals seen since the early 1970s.
The chart, based on Bloomberg and Goldman Sachs Global Investment Research data, suggests investors are rapidly rotating away from some of the market’s most crowded winners. But while momentum has faded in one corner of the market, it hasn’t disappeared—it appears to be finding new homes.
Momentum Rotation
Momentum investing, which favors stocks with the strongest recent price performance, has been one of the defining themes of the AI-driven bull market. Chipmakers, software companies and other technology names led the charge as investors poured into businesses expected to benefit from surging AI spending.
Goldman’s data suggests that leadership is beginning to broaden. A momentum unwind doesn’t necessarily signal the end of a bull market; it often reflects investors locking in gains and reallocating capital toward sectors and stocks with improving fundamentals or fresh catalysts.
New Momentum Leaders
Benzinga Edge’s Momentum Rankings show that fresh leadership is already emerging.
Sandisk Corporation (NASDAQ:SNDK) currently tops the rankings with a momentum score of 99.96 out of 100, reflecting renewed investor interest in memory and storage companies as AI infrastructure spending continues to drive demand across the semiconductor supply chain.
Micron Technology, Inc. (NASDAQ:MU) is also seeing strong momentum through leveraged products. Two ETFs tied to the memory chipmaker—the Direxion Daily MU Bull 2X ETF (NASDAQ:MUU) and GraniteShares 2x Long MU Daily ETF (NASDAQ:MULL)—rank among the market’s strongest momentum plays, suggesting traders remain bullish on Micron’s role in the fast-growing high-bandwidth memory market that powers advanced AI chips.
Momentum is also showing up outside technology. The Breakwave Tanker Shipping ETF (NYSE:BWET) ranks among the leaders as investors continue to monitor geopolitical tensions around the Strait of Hormuz, a critical oil shipping chokepoint where disruptions could tighten global tanker supply and lift freight rates. Nine Energy Service, Inc. (AMEX:NINE) also features near the top of the rankings, highlighting pockets of strength within the energy sector.
What Investors Should Watch
For investors, Goldman’s chart suggests momentum isn’t disappearing—it’s rotating.
While some of Wall Street’s most crowded winners are taking a breather, fresh momentum is emerging in AI memory plays, leveraged bets on Micron and shipping names benefiting from geopolitical uncertainty. If that trend continues, the market’s next leaders may look very different from the stocks that defined the AI rally over the past two years.
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