The Best And Worst Small Cap Stocks Of First Half 2023

Bitcoin miners are surging thanks to a strong year for crypto, while ChatGPT is slamming stocks like online study-help company Chegg.

Investors who kept the faith in the stock market after steep losses in 2022 have been handsomely rewarded in the first half of this year, with the S&P 500 Index up 14%, fueled by massive gains for megacap tech stocks like Nvidia (up 189%), Meta Platforms (138%) and Amazon (55%). But investing in small-cap companies has been more hit-or-miss.

The Russell 2000 Index has gained a more tepid 7.2% this year and remains 23% lower than its November 2021 record high. Small cap stocks are typically more vulnerable to rising interest rates, limiting their access to debt markets, and slowing economic growth. The regional banking crisis set off by the failure of Silicon Valley Bank also hampered the returns of the Russell 2000, which has a 14% weight to the financials sector.