Investment Q&A

There have been some positive earnings updates since April, but largely, these are names that are either not profitable or near profitable, and have been sold off heavily over the past year. Most unprofitable tech names saw large declines in 2022 and early 2023 as elevated inflation, rising interest rates, and recession fears took hold and market participants sought safety in money market funds or large-cap profitable stocks. 

The underlying market narrative has been shifting over the past few months, as a rapid deterioration in inflation and signs of an interest pause have occurred. Investors are beginning to seek out higher risk names, and move farther out the 'risk curve' as optimism returns and investors see these companies expanding their fundamentals rather than contracting. We would consider most of these moves to be sentiment related in combination with continued growth in fundamentals and an improving outlook.