Since the April 2025 market low, small-capitalization stocks have kept pace with, and at times even outpaced, shares in large companies. Many strategists expect the rally in small-cap stocks to continue.
After a two-year profit downturn, earnings growth at small firms is turning up, says Francis Gannon, co-chief investment officer at small-cap specialist Royce Investment Partners. Lower interest rates, deregulation, and strong activity in mergers and acquisitions and in initial public offerings (IPOs) have been a boon.
