Goldman Sachs’ unprofitable tech basket climbs 27% in May, outpacing the Nasdaq 100

A basket of unprofitable technology companies tracked by Goldman Sachs surged 27% in May, handily beating the Nasdaq 100. The kind of stocks that don’t make money are, once again, making people money.

The rally marks a sharp reversal for the basket, which tracks high-growth tech names with negative earnings. It had fallen roughly 33% between February and April before snapping back with force. Year-to-date, the basket has reportedly gained approximately 57%, a figure that says less about fundamental improvement and more about the market’s mood swings.

From freefall to frenzy

Here’s the thing about unprofitable tech stocks: they act like a barometer for risk appetite. When investors feel adventurous, these names get bid up aggressively. When fear creeps in, they’re the first to get dumped. The February-to-April drawdown of roughly 33% was a textbook example of the latter. The May rebound is a textbook example of the former.

The catalyst driving this particular round of speculative enthusiasm appears to be artificial intelligence. The AI narrative has been fueling risk-on behavior across equity markets, and it’s clearly pulling capital toward companies that promise future growth at the expense of present profitability.

What makes the 27% monthly gain notable isn’t just the size. It’s that these stocks outperformed the Nasdaq 100, an index loaded with companies that actually generate massive profits. When unprofitable names are beating Apple, Microsoft, and Nvidia on a monthly basis, it signals a very specific kind of market environment: one where speculation is being rewarded more generously than quality.

Not everyone is buying the hype

JPMorgan traders have reportedly expressed skepticism about the sustainability of this speculative rally. The tension between Goldman’s basket performance and JPMorgan’s caution captures a broader debate playing out across institutional finance. On one side, you have a market that’s clearly rewarding risk-taking. On the other, you have seasoned professionals pointing out that unprofitable companies tend to underperform quality-growth stocks, like those in the Magnificent 7, over longer time horizons.

What this means for investors

The 57% year-to-date gain looks impressive on paper. But zoom out and you see a chart that looks like a roller coaster. A 33% decline followed by a ferocious rebound means that timing mattered enormously. Anyone who bought in February and panicked in April locked in substantial losses. Anyone who held through the drawdown or bought the dip is sitting on significant gains.

For crypto-native investors watching this from the sidelines, Goldman’s basket sits firmly in traditional equity markets with no overlap into blockchain or digital asset territory. The signal here is about broader market psychology, not a direct read-through to token prices.