Investors Get Nvidia-Like Gains This Year On 6 Smallish Stocks

Nvidia (NVDA) and Meta Platforms (META) get all the attention due to their size and influence in the S&P 500 — and the fact they’ve jumped more than 100% this year. But investors did nearly just as well with some stocks not big enough to be on the S&P 500.

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Six stocks in the S&P Mid-Cap 400 and S&P 600 Smallcap indexes, including tech plays Super Micro Computer (SMCI) and Arlo Technologies (ARLO) plus consumer discretionary Abercrombie & Fitch (ANF) jumped 100% or more this year, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. That doubled investors’ money (or more).

And yet, finding winning stocks on and off the S&P 500 has gotten more difficult since July 31. That’s when the yield on the 10-year Treasury hit 4%, causing some major headwinds for stocks.

“Wall Street is trying to understand how the U.S. economy will be able to deliver a soft landing as Treasury yields trade at cycle highs,” said Edward Moya at Oanda.

Finding Winners Gets Harder

The S&P 500’s 8.1% pullback since late July put the year’s rally on the ropes. Now, the S&P is only up less than 10% on the year.

And the pullback has made winners all the more valuable. Now nearly 60% of the stocks in the S&P 1500, which includes small and midsize companies in addition to the S&P 500, are in the red for the year.

But luckily, a handful of smaller stocks continue to remain positive despite the selling.

Super Micro Computer: Even Better Than Nvidia

Nvidia stock’s 194% gain this year is tough to beat. But not impossible.

Well-run Super Micro Computer’s shares rose 210.5% this year to 254.88. And that’s despite the stock falling nearly 23% since late July. It’s a powerful showing for a company valued at just $13 billion, a fraction of Nvidia’s more than $1 trillion market value.

Investors like Super Micro’s growth trajectory. Analysts think the company will make $16.66 a share in 2024, up more than 40% in 2023.

Also in tech, video capture company Arlo is a hot ticket for investors off the S&P 500. Shares aren’t up as much as Super Micro Computer, but with a rise of 153%, they’re no slouch. And keep in mind shares are still up that much despite a nearly 22% sell-off since July. Analysts think the company will turn an adjusted profit of 22 cents a share in 2023, reversing many years of losses.

Big Winners Not Just Tech

Tech is known for mega gains, but money’s been made in other sectors, too, with smaller stocks.

Teen apparel seller Abercrombie & Fitch has rallied more than 50% since late July while most other stocks sold off. The result? Its shares are up more than 161% this year.

The rally is due to investors looking past an ugly 2023 and forward to 2024. The company’s profit is seen dropping more than 90% in 2023. But it’s expected to rally more than 1,600% in 2024.

So its still possible to find winners, including outside the S&P 500. But it’s certainly getting harder.

Top S&P 1500 Stocks (Excluding S&P 500) This Year

Company
Ticker
Index
Stock YTD % ch.
Sector

Super Micro Computer
(SMCI)
S&P 400 (midsize)
210.5%
Information Technology

Abercrombie & Fitch
(ANF)
S&P 600 (small)
161.8
Consumer Discretionary

Arlo Technologies
(ARLO)
S&P 600
152.7
Information Technology

SkyWest
(SKYW)
S&P 600
126.7
Industrials

XPO
(XPO)
S&P 400
115.9
Industrials

Powell Industries
(POWL)
S&P 600
107.1
Industrials

Sources: S&P Global Market Intelligence, IBD

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