Wall Street is ditching the profitable tech elites for a wild batch of companies with no earnings and no apologies.
The so-called Unprofitable 858, those money-losing names inside the Russell 300, have started driving the market’s latest high-stakes rally. The obsession with profits is gone. Investors are now throwing cash at companies with big risk, no earnings, and serious volatility.
Since April 8, the day the market bottomed out, 10 of the 14 stocks that tripled on the index haven’t made a single dollar of profit. That stat came straight from Bespoke Investment Group, and it’s changing the entire conversation.
Through late June, this same batch of 858 unprofitable companies delivered 36% average gains, beating profitable peers who actually generate income.
Avis Budget Group, Carvana, and Aeva Technologies are three of the biggest names riding this wave. Avis has jumped 188% since April. Carvana has climbed 98%, and Aeva, a maker of lidar sensors for self-driving cars, is up 457%. This is the same type of manic rally that powered the meme-stock craze in 2021, back when cheap money and government stimulus pumped the market to extremes.
Traders ditch cash flow for thrill stocks
The signs are everywhere. A Goldman Sachs tracker for retail traders’ favorite stocks just hit a fresh high, the first since November 2021. That’s when speculation peaked before rate hikes started wrecking fragile plays.
Steve Sosnick, chief strategist at Interactive Brokers, said the movement isn’t rooted in fundamentals anymore. “We’re not yet seeing a full-fledged ‘flight-to-crap,’ but it is clear that the motivation behind many of these stocks’ activity is something other than disciplined considerations of discounted cash flows,” Steve said.
Inside Interactive Brokers’ own trading data, the trend gets even more insane. Traders have been pouring into names like Cyngn, a self-driving vehicle firm with barely any revenue and a valuation under $100 million.
Despite that, Cyngn’s stock has almost tripled in three months. It’s still down 90% year-to-date, but that hasn’t stopped the trades. These are names investors would’ve dumped a year ago. Now they’re at the top of trading dashboards.
The pandemic-era favorites are back too. Avis, once a meme darling during lockdowns, is leading again. Carvana, the used-car dealer that crashed hard during the downturn, has now nearly doubled since April. Aeva’s 400%+ run shows how far this rally is spreading. It’s not just mega caps or AI names moving the indexes. It’s companies with no earnings and little business stability.
Kevin Gordon, senior investment strategist at Charles Schwab, said this bounce in unimpressive names could become a real problem. “If you do see that low-quality, speculative part of the market lead for an extended period, it can be concerning,” Kevin warned.
Still, he admitted this is what retail investors have been trained to do. “They’ve been conditioned to buy the dip and not look back, and for the most part that’s been a sound strategy for them.”
Retail crowd piles in as macro data eases fears on Wall Street
What’s feeding the beast? A mix of optimism around rate cuts, economic resilience, and political easing under President Trump. The belief that the White House will take a softer stance on trade and inflation has helped bring bullish energy back.
June’s jobs report was the latest upside surprise. Payroll growth held steady, and unemployment dropped to 4.1% from 4.2%, even though Wall Street Journal economists had expected an increase. Those numbers gave traders more confidence that the second half of 2025 could deliver strong growth without spiking inflation.
The S&P 500 and Nasdaq both closed at record highs just before the holiday break. That momentum has killed the fear that dominated just three months ago, when retail sentiment hit its lowest level since 2009. Now, traders are only scared of missing the next pop. The “YOLO trade” is alive and foaming at the mouth.
Art Hogan, chief market strategist at B. Riley Wealth Management, said the second-quarter attitude shift was loud. “When the attitude shifted to risk-on in the second quarter, it seems like the traditional players moved back into the Apples and Amazons and Microsofts of the world,” Art said. “And now you’ve got the cohort of the ultra-risky, ‘you only live once’ gang rushing back into their selection of equities.”
That risk-heavy crowd is also fueling leveraged ETFs. Invesco’s ProShares UltraPro QQQ, which tries to triple the daily return of the Nasdaq-100, saw record inflows in early April. It’s now up more than 100% since April 8. That kind of result is only possible when retail traders ignore warnings and throw size at momentum.
Still, the risk of collapse is real. Josh Jamner, senior analyst at ClearBridge Investments, said the long-term reality hasn’t changed. “While some of this speculative stuff can go on huge runs, in the long run, the vast majority of stock returns come back to earnings,” Josh said. “Investors need to keep that in mind.”
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