The small-cap stocks in the Russell 2000 Index have surged 154% since mid-2025, while profitable companies have only risen 34%.
BlockBeats News, July 16th, The Kobeissi Letter published an article stating that companies with negative earnings per share in the Russell 2000 Index have surged 154% since mid-2025, while companies with positive earnings per share have only risen 34% during the same period.
So far this year, unprofitable companies in the Russell 2000 Index have risen 45%, outperforming profitable companies at 18%. Driven by this trend, the Russell 2000 Index has risen 20% year-to-date and is poised to deliver its best annual performance since 2003.
Meanwhile, the S&P 500 Index has risen 11%, with the seven tech giants in the U.S. stock market only seeing a 4% increase. The top-performing small-cap stocks are mainly tech and infrastructure companies expected to benefit from AI spending. The market is rewarding AI exposure, regardless of whether the companies are profitable.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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