Except for TSLA & META, which stocks are leading the market?

In addition to the outperforming $Meta Platforms, Inc.(META)$ and $Tesla Motors(TSLA)$ at the beginning of the year, stocks of small companies are leading the market’s monthlong rally. More and more investors are coming to believe that the end of interest-rate hikes is just around the corner.

Don't miss the trend

1) $Carvana Co.(CVNA)$ - another meme stock is brewing

Carvana, an e-commerce platform for buying and selling used cars in US, has rose 207.78% in 2023.

Carvana has been recently sought after by retail investors, as the market's bearish bets on the stock have reached an all-time high. According to the latest exchange data, the stock is shorted as a percentage of outstanding volume at 59.7%, which is twice of the 23.5% of GameStop and 22.6% of AMC.

2) Small tech companies lead the market during yesterday's frenzy

You can find Movers & Shakers in“Quotes” on Tiger Trade app.

$Align Technology(ALGN)$ $Affirm Holdings, Inc.(AFRM)$ $Beyond Meat, Inc.(BYND)$ $Cloudflare, Inc.(NET)$ $Virgin Galactic(SPCE)$

These companies have a common feature - small tech company, which is generally the choice of ARK fund.

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3) $ARK Innovation ETF(ARKK)$ is the best gainer so far

Speaking of which, we can’t miss ARKK’s stellar performance - 45.8% - in 2023. Cathie Wood predicts innovations will soar 40% in value every year to over $200 trillion by 2030.

Two of ARK’stop 10 holdings, $Tesla Motors(TSLA)$ and $Shopify(SHOP)$, soared 67% and 40% respectively.

“We are the new Nasdaq,” CathieWood said.

Wood said that while 2022 was a “horrific” year for her fund’s returns amid the rapid rise in interest rates, investors sold their positions in growth benchmarks like the Nasdaq and moved into ARKK. The ETF saw positive inflows of about $1.3 billion last year, despite plunging 67% in its worst annual performance on record.

Conclusion

Another common feature of these rising small stocks is the low valuation. Most companies suffered much in 2022 and their valuation fall to a historical low. After the rally of tech giants, small tech may follow in the uptrend.

If small companies are not familiar to you, ARK’s fund might be a good choice to catch up this trend. But you should be cautious about your entry price because the rally may face a pullback recently.