Small-cap stocks emerged as the standout performers of 2024, significantly outpacing their blue-chip counterparts amid a broader market rally.
What Happened: The disparity was particularly striking in the year's top performers, with small-cap leader KULR Technology Group (NASDAQ:KULR) delivering an extraordinary 2,494% return, while blue-chip frontrunner NVIDIA Corporation (NASDAQ:NVDA) gained a still-impressive 184%.
Traditional blue-chip stocks, typically components of the Dow Jones Industrial Average, demonstrated their characteristic stability while still posting notable gains.
Historically, small-cap stocks, typically valued between $250 million and $3 billion, have shown potential to outperform the S&P 500 despite higher volatility. The Russell 2000, which tracks this segment, serves as a key benchmark for small-cap performance.
Market Performance Comparison 2024, according to data from Benzinga Pro:
| Category | Company | Performance (2024) | Price |
|---|---|---|---|
| Blue-Chip Stocks | NVIDIA Corp | 184.36% | $137 |
| Walmart Inc (NYSE:WMT) | 77.79% | $91.66 | |
| American Express Co (NYSE:AXP) | 59.87% | $301.05 | |
| Wells Fargo & Co (NYSE:WFC) | 44.50% | $71.11 | |
| Costco Wholesale Corp (NASDAQ:COST) | 44.42% | $939 | |
| Small-Cap Stocks | KULR Tech | 2494.59% | $4.80 |
| Red Cat Holdings Inc (NASDAQ:RCAT) | 1423.86% | $13.41 | |
| Sezzle Inc (NASDAQ:SEZL) | 1227.05% | $272.31 | |
| Dave Inc (NASDAQ:DAVE) | 1099.17% | $100.55 | |
| Quantum Corp (NASDAQ:QMCO) | 909.57% | $67.37 |
Why It Matters: The exceptional performance of small-caps aligns with ARK Invest CEO Cathie Wood's mid-2024 prediction of smaller companies outperforming the "Magnificent Seven" tech giants. Wood attributed this shift to the Federal Reserve's restrictive monetary policy, suggesting it could create opportunities beyond mega-cap stocks.
This shift comes as veteran Wall Street investor Ed Yardeni projects the S&P 500 to reach 7,000 by the end of 2025, citing a "Roaring 2020s" scenario driven by productivity gains and cooling inflation. Yardeni forecasts S&P 500 operating earnings per share to hit $285 in 2025, an 18.8% year-over-year increase.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
