2 hours ago
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The stocks making the most money for investors in 2025 are, ironically, the ones not making any money at all.
Unprofitable companies within the Russell 2000 small-cap index have been dramatically outperforming their profitable counterparts this year, with loss-making firms posting roughly 19% gains compared to about 9% for companies that actually generate earnings through October 21, 2025.
The numbers behind the speculation
Here’s the thing about the Russell 2000: somewhere between 40% and 46% of its constituents are currently operating at a loss. That’s not a rounding error. That’s nearly half the index burning cash while their share prices climb.
The dynamic has caught the attention of heavyweight analysts. Torsten Slok at Apollo Global Management and Lisa Shalett at Morgan Stanley have both publicly flagged the outperformance of negative-earnings stocks as a trend worth watching.
Compare this to the S&P 600, an alternative small-cap index that actually requires positive earnings for inclusion. Its performance has been notably muted relative to the Russell 2000 during this growth cycle.
The sectors driving this divergence are predictable. Technology and AI-focused small caps have been the primary beneficiaries, thriving on expectations of future interest rate cuts and elevated valuations.
Bitcoin miners are case study number one
For crypto investors, the most relevant corner of this trade involves Bitcoin mining firms that sit inside the Russell 2000. Companies like Cipher Mining, Hut 8 Corp., and CleanSpark are notable examples of unprofitable constituents that have been riding this speculative tailwind.
The current setup creates an interesting tension. Bitcoin mining economics got meaningfully harder after the April 2024 halving, which cut block rewards in half. Many miners have responded by diversifying into AI and high-performance computing to justify their massive energy infrastructure. That narrative pivot, from pure crypto play to AI-adjacent tech company, happens to align perfectly with the broader market’s willingness to pay premium prices for unprofitable growth stories.
Why this matters for your portfolio
The historical pattern here is well-documented. Loss-making stocks tend to gain momentum when liquidity is abundant, growth narratives are compelling, and the cost of being wrong feels low.
For traditional equity investors, the divergence between the Russell 2000 and the earnings-screened S&P 600 serves as a useful sentiment indicator. When the gap widens, it signals speculative appetite is high. When it narrows, it often means investors are rotating toward quality.
For crypto-focused investors, the implications are more direct. If market sentiment pivots away from speculative growth, Bitcoin mining stocks could face a double headwind: broader risk-off positioning combined with any potential weakness in Bitcoin’s price. Miners that have re-rated higher on AI narratives rather than mining profitability may be especially vulnerable if that story loses its luster.
The smart move is probably to watch the spread between profitable and unprofitable stock performance as a leading indicator. When unprofitable companies start underperforming again, that tends to coincide with broader risk reduction across speculative assets, including crypto. Nearly half of a major US equity index losing money while outperforming is the kind of data point that tends to look obvious in hindsight.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
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