Goldman Sachs' basket of unprofitable technology companies climbed 27% in May, beating the NASDAQ 100 by 17 percentage points. The sharp rally in money-losing names has traders flagging market volatility and speculative risk — and some are watching whether the momentum could bleed into crypto.
A 27% jump in one month
The basket, which tracks tech stocks that are burning cash, surged through May while the broader NASDAQ 100 managed a 10% gain. A 27% monthly move in unprofitable names is unusual even by recent standards. It suggests investors are piling into riskier corners of the equity market, a posture that often ends abruptly when sentiment shifts.
Why the surge matters
When stocks without earnings lead the charge, it's typically a sign of speculative excess. The move happened even as interest rates stayed elevated and some earnings forecasts were trimmed. Market strategists inside Goldman have warned about concentration risk in tech, but the data show money still flowing into the highest-beta names. The rally in the unprofitable tech basket essentially says “risk on” — and that can amplify swings when the macro backdrop changes.
The crypto link
The same risk appetite that lifted unprofitable tech often supports crypto assets. Bitcoin and ether lagged the basket in May, but a sustained stretch of risk-taking could pull digital assets higher — or, if the tech rally falters, drag them down. Crypto traders tend to watch equity volatility as a leading indicator, and the recent action in Goldman’s basket is one more data point that the market is in a speculative mood. The next question is whether this appetite for loss-making bets persists into June, or whether the 27% move itself becomes a peak for the basket. No one is calling a top yet, but the timing — heading into a Fed decision and quarter-end rebalancing — isn't ideal for an extended rally in unprofitable names.
