Four tiny stocks all traded more than Disney... and 476 other members of the S&P 500 yesterday

These days, you have to go well outside the S&P 500, which holds the largest American public companies, to find the stocks worth talking about. An emergent market theme is the spike in appetite for more speculative, volatile companies — ones with massive upside potential tied to buzzword-heavy business lines, but also little in the way of current revenues or profits.

This handful of relatively tiny companies are stealing the spotlight, with their trading volumes going absolutely nuts.

That amount of money trading in stocks that few people have heard of is unusual, but when you account for the size of these companies, the comparisons get even more staggering. Before we get into the details, some quick context. The average S&P 500 Index stock traded $818 million yesterday, per data from FactSet, or about 0.89% of its market cap — again, on average. Tesla, the most active stock overall, actually traded about 4% of its market cap.

Quantum Computing only has a market capitalization of about $2 billion. Yesterday, more than $3.3 billion changed hands in the company’s stock — meaning that it traded ~164% of its market cap in one session. Rigetti Computing turned over about ~94% of its market value, and the value traded in SoundHound AI was about 26% of its market cap.

But nothing compares to Nukkleus Inc. After announcing a strategic acquisition that pivots the company into the defense sector, the tiny company’s stock soared, gaining more than 700% in just one day. Per FactSet, more than $2 billion changed hands in the company’s shares yesterday. (Bloomberg estimates a lower amount, closer to $1.4 billion.) The company’s market cap is just $40 million, meaning that, on the FactSet numbers, traders bought and sold over 5,000% of its total market cap... in one day.

Why are these stocks soaring?

Quantum computing has been the shiny new object for traders chasing new thematic investing ideas in the wake of Alphabet’s December 9 announcement of a problem-solving breakthrough. The search giant said that its quantum computer completed a series of calculations would have taken the world’s best supercomputers 10 septillion years to finish. Smaller pure-play companies in this line of business, which had already been up anywhere from 175% to 715% so far this year, have since extended their year-to-date gains. Notably, Rigetti Computing and Quantum Computing have each more than doubled in a little over a week.

Rigetti, in partnership with other firms including Nvidia, was able to successfully use AI to calibrate a quantum computer (that is, setting it up so that it works and does whatever it’s being asked to do properly). That’s a significant potential time-saver that could aid the proliferation of this technology. Meanwhile, Quantum Computing secured a contract with NASA to process interferometric imaging data, which are images generated through the use of radar.

SoundHound AI, which sells voice-AI software, seems to have benefited from its legions of doubters amid an apparent short squeeze in the shares. Roughly one-quarter of its float is held by traders betting against the company — an increasingly painful position to have held.