• The 2023 stock market rally has extended into early 2024 with the S&P 500 and the Nasdaq Composite both posting positive returns during the first month of trading.
• From the large-cap universe, some of the top-performing stocks from January 2024 included: ZIM, NMR, NVDA, ASML, AMD, NFLX, CYH, SAP, SPOT, IBM, META and MELI.
• From the small-cap universe, some of the top-performing stocks from January 2024 included: RVSN, ELEV, SWVL, QSG, IKT, MPU, DWAC, DAVE, PYXS and CALC.

The 2024 trading year has started much like the last one ended, with many stocks notching gains during the first 30 days of trading.

So far this year, the S&P 500 is up about 2%, while the Nasdaq Composite is up closer to 3%. Much like last year, tech stocks have had a particularly strong start to the new year. 

Listed below are some of the top-performing stocks from the first month of the 2024 trading year (filtered for companies with at least $10 billion in annual revenues):

• Integrated Shipping (ZIM), +34%
• Nomura Holdings (NMR), +29%
• Nvidia (NVDA), +28%
• ASML Holding (ASML), +21%
• Advanced Micro (AMD), +21%
• Netflix (NFLX), +20%
• Community Health (CYH), +16%
• SAP SE (SAP), +15%
• Spotify (SPOT), +14%
• IBM (IBM), +14%
• Western Digital (WDC), +13%
• Meta Platforms (META), +13%
• MercadoLibre (MELI), +12%

Many of the above stocks have benefited from positive earnings tail winds, such as Netflix (NFLX). And of course, the continuing artificial intelligence craze has also boosted the shares of many tech firms from the above list, including AMD, IBM, META, NVDA, SAP and WDC. 

However, some other key market themes are also present in the early winners from 2024, such as the continuing rally in the Japanese stock market (NMR) and the recent increase in transoceanic shipping rates (ZIM). 

Interestingly, the early returns from the Q4 earnings season—which is going on now—haven’t been great. According to one estimate, overall earnings growth so far this year has been negative, clocking in at roughly -4.7%. And that’s markedly weaker than what was expected before earnings season started, when consensus expectations called for +2% in positive earnings growth for the S&P 500. 

Right now, however, investors and traders appear more focused on a potential rate cut, as well as an expectation that corporate earnings will rebound during H2 2024. It’s never easy to pinpoint why the stock market is trending higher, but those appear to be the key themes that optimists are holding onto at this time. 

Small cap outperformers in January 2024

Looking beyond the large cap universe, there’s also been plenty of early outperformers in the stock market from the small cap universe. Readers should keep in mind that smaller capitalized stocks typically trade with lower liquidity, and can be subject to elevated volatility. In that regard, small cap stocks are considered higher risk investments as compared to their large-cap peers. 

Due to their smaller market capitalization, small cap stocks can also make outsized moves. Listed below are some of the small cap standouts thus far in 2024:

• Rail Vision (RVSN), +1,110%
• Elevation Oncology (ELEV), +340%
• Swvl Holdings (SWVL), +200%
• QuantaSing Group (QSG), +146%
• Inhibikase Therapeutic (IKT), +127%
• Mega Matrix (MPU), +120%
• Digital World Acquisition (DWAC), +118%
• Dave Inc (DAVE), +101%
• Pyxis Oncology (PYXS), +85%
• CalciMedica (CALC), +55%

Additional details on the current narrative surrounding each of the aforementioned small cap stocks is highlighted below.

Rail Vision (RVSN), +1,100%

Rail Vision is headquartered in Israel and designs, develops and sells railway detection systems for railway operational safety, efficiency and predictive maintenance for railways. The company’s railway detection system includes visible light spectrum cameras (video) and thermal cameras that transmit data to an on-board computer. Rail Vision recently received formal certifications for critical European Union (EU) railway standards for its systems, as well as a new order from a U.S.-based rail and leasing services company for the purchase of Rail Vision’s AI-based Switchyard System. Both of these developments appear to have buoyed the company’s shares. 

Elevation Oncology (ELEV), +340%

Elevation Oncology focuses on the discovery and development of cancer treatments targeted at solid tumors. The company is currently researching and testing EO-3021, a differentiated antibody drug conjugate (ADC) for the treatment of patients with advanced, unresectable or metastatic solid tumors. Elevation recently announced that EO-3021 “represents a highly differentiated, potentially best-in-class molecule, able to deliver better tolerability and improved anti-tumor activity to patients with tumors expressing varying levels of Claudin 18.2. We look forward to sharing an update from our ongoing trial in mid-2024.”

Swvl Holdings (SWVL), +200%

Swvl Holdings is headquartered in Dubai and provides mass transit ridesharing services. For example, the company offers B2C Swvl Retail, which provides riders with a network of mini-buses and other vehicles running on fixed or semi-fixed routes within cities. Egypt represents Swvl’s largest market, representing 93% of the company’s revenue, while Saudi Arabia is second with 7%. The company recently reported its first net profit, which appears to have triggered the recent runup in the company’s shares. 

QuantaSing Group (QSG), +146%

QuantaSing Group Limited is an education company that provides online learning services in China. The company offers courses in financial literacy, video production, personal well-being, electronic keyboarding and meditation/wellness. Education stocks from China have a long history of elevated volatility and extreme gap moves, which helps explain the gargantuan returns in this stock during the last 30 days. Investors and traders should conduct appropriate due diligence before entering a position in QSG, as with any new holding.

Inhibikase Therapeutic (IKT), +127%

Inhibikase Therapeutics is a clinical-stage pharmaceutical company that is developing therapeutics for Parkinson’s disease and other related disorders. Its lead product candidate is IkT-148009—a small molecule Abelson tyrosine kinase inhibitor, which is in Phase 2 clinical trials. Absent any tangible news, it appears that speculators may be bidding up shares of IKT with the hope that promising news related to those trials will be announced at some point in the future.

Mega Matrix (MPU), +120%

Mega Matrix Corp operates in the game finance sector (aka “GameFi”), and particularly in the metaverse. It is also involved in the crypto sector, and facilitates staking validators on the Ethereum network. In early January, Mega Matrix acquired 60% of FunVerse Holding, which is the parent of FlexTV. The acquisition appears to have sparked fresh optimism in the company’s shares, with investors hoping that Mega Matrix can expand its digital footprint/brand via FlexTV. 

Digital World Acquisition (DWAC), +118%

Digital World Acquisition is expected to be the vehicle by which the Trump Media & Technology Group (TMTG) goes public. The majority owner of TMTG is former President Donald Trump. Digital World Acquisition is a special purpose acquisition company, or SPAC, that basically operates as a cash-rich shell company. TMTG’s primary asset is Truth Social, which has positioned itself as an alternative to X, formerly Twitter. 

Plans for a merger between DWAC and TMTG have been rumored since 2021, but as of now, have yet to be consummated. Shares of DWAC have been climbing steadily in 2024 as Donald Trump has marched closer to securing the Republican nomination for president. DWAC first popped when the former president won the Iowa caucuses on Jan. 15, and extended those gains when Governor Ron DeSantis dropped out of the race on Jan. 22. 

Publicly available figures indicate that Truth Social has about seven million users and brought in roughly $3.38 million in revenue (mostly from advertising) during the first nine months of 2022. During that same period, TMTG suffered $49 million in losses. 

Shares of DWAC have been susceptible to extreme volatility, which indicates that investors and traders should tread cautiously when considering positions in this stock. It’s important to reiterate that TMTG has yet to merge with DWAC, which means DWAC shares could correct dramatically if the proposed merger is called off. At this time, the Securities and Exchange Commission (SEC) is reviewing the proposed merger. 

Dave Inc. (DAVE), +101%

Dave Inc. provides a suite of financial products and services through its online platform. One of the company’s goals is to promote improved management of personal finances via its Budget financial management tool. The company styles itself as a neobank and fintech disruptor, purportedly charging lower fees as compared to traditional financial institutions. Neobanks (digital banks) offer digital-first financial services via mobile apps and websites. 

In mid-January, the company announced it was launching DaveGPT—a generative AI assistant that offers self-service customer inquiry resolution. At the start of last year, the company executed a reverse stock split in the wake of a sharp correction in the company’s shares. Considering the absence of meaningful announcements, the recent runup in the company’s shares might be best characterized as speculative in nature, which suggests investors and traders should tread cautiously with this stock, as with any small-cap offering. 

Pyxis Oncology (PYXS), +85%

Pyxis Oncology is a clinical-stage biopharmaceutical company that is developing therapies to treat various cancers. One of the company’s most promising candidates is PYX-106, an immunoglobulin G1 isotype siglec-15 targeting antibody, which is currently in Phase 1 clinical trials for the treatment of solid tumors. The company is also conducting trials on PYX-201. Preliminary data from those trials is expected to be announced at some point in the near future, which probably helps explain recent bullish behavior (e.g. speculative positioning) in the company’s shares.

CalciMedica (CALC), +55%

CalciMedica is a clinical-stage biotechnology company that’s developing therapies for life-threatening inflammatory diseases. The company’s proprietary technology is intended to inhibit calcium release-activated channels (CRAC) in order to modulate the immune response and protect against tissue cell injury associated with inflammatory diseases. The company announced on Jan. 22 that it would raise approximately $55 million via a private placement, which probably helps to explain recent bullish behavior in the company’s shares. 

Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.

Andrew Prochnow has more than 15 years of experience trading the global financial markets, including 10 years as a professional options trader. Andrew is a frequent contributor Luckbox magazine.

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