Small caps are booming this year. Here are Wall Street's top smaller picks

Small cap stocks are on track to score their best performance in more than 30 years, and investors would be wise to scoop up several smaller companies to ride that momentum, according to two Wall Street investment banks. Bank of America and TD Cowen compiled lists of small cap stocks in healthcare technology, retail, biotech and other industries, saying they're poised to rise. Among them: Freshpet and Omnicell . Small cap stocks are publicly traded companies with relatively modest market values, usually between roughly $250 million and $2 billion. The Russell 2000 index, which tracks small caps, climbed as high as 3,033.75 on Thursday, an all-time high and up 21% in 2026. By contrast, the S & P is ahead 7.5% this year. That outperformance also puts the Russell on track for its best first half of the year since 1991. "The Russell 2000 has been the best-performing size index," in the first half, Bank of America analyst Jill Carey Hall wrote to clients Thursday. "We still see upside opportunities within small caps for less rate-sensitive stocks given how concentrated Russell 2000 performance has been" in 2026, she said. The rally in small caps comes as other areas of the market have pulled back. The S & P 500 is poised to close out the week in the red, largely due to a sweeping selloff in technology stocks that began on Monday. …