Unprofitable Russell 2000 Stocks Surge 60%, Outpacing Profitable Firms
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 21 2026
0mins
Source: Yahoo Finance
- Market Rally Phenomenon: Since April 2025, unprofitable Russell 2000 stocks have surged approximately 60%, significantly outpacing the 38% gain of profitable small-cap firms, indicating a shift in market risk pricing that could impact investor confidence.
- Profit vs. Loss Comparison: According to Apollo Global Management, about 806 stocks in the Russell 2000 had negative earnings at the end of last year, while 1,120 were profitable, with the loss-making firms representing 40% of the index, a ratio that, while not new, has drawn attention due to their market performance.
- AI-Driven Speculative Surge: Many of the loss-making companies are concentrated in sectors like software, semiconductors, and biotech, which are benefiting from AI stocks, leading investors to pay a premium for future growth potential, despite concerns over stretched valuations.
- Interest Rates and Earnings Outlook: Apollo's chief economist Torsten Slok noted that the widening gap between profitable and unprofitable firms may hinge on interest rates and the duration of the AI trade, with expectations for stronger small-cap earnings growth in 2026.
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Analyst Views on APO
Wall Street analysts forecast APO stock price to rise
11 Analyst Rating
10 Buy
1 Hold
0 Sell
Strong Buy
Current: 122.170
Low
136.00
Averages
164.45
High
182.00
Current: 122.170
Low
136.00
Averages
164.45
High
182.00
About APO
Apollo Global Management, Inc. is a global alternative asset manager and a retirement services provider. It operates through three segments: Asset Management, Retirement Services and Principal Investing. The Asset Management segment focuses on three investing strategies: yield, hybrid, and equity. These strategies reflect the range of investment capabilities across its platform based on relative risk and return. The Retirement Services business is conducted by Athene Holding Ltd (Athene), a financial services company that specializes in issuing, reinsuring, and acquiring retirement savings products designed for the increasing number of individuals and institutions seeking to fund retirement needs. Athene product lines include annuities and funding agreements. The Principal Investing segment includes realized performance fee income, realized investment income from its balance sheet investments, and certain allocable expenses related to corporate functions supporting the entire company.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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See More
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