Small-cap stocks have been dominant in 2026, outperforming their large-cap and mid-cap peers so far this year, and by a big margin:
| U.S. S&P Index (by Style) | Year-to-Date Returns |
| Small-Cap Growth | 26.3% |
| Small-Cap Value | 22.9% |
| Mid-Cap Growth | 22.7% |
| Mid-Cap Value | 14.9% |
| Large-Cap Growth | 15.2% |
| Large-Cap Value | 12.0% |
As you can see from the table above, small-cap stocks have outperformed their large-cap counterparts by 10 percentage points in the last seven-plus months.
For a closer look at how the stage has been set for this bout of outperformance, this recent article about small caps leading the way, by Cabot’s resident small-cap expert, Tyler Laundon, is an excellent place to start.
The short version, however, is that “earnings power, productivity improvements and valuation,” coupled with lagging performance for the last few years, are powering small caps higher this year as investors look beyond the obvious mega-cap tech names that have helped carry the markets in recent memory.
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I’ll defer to Tyler on the specifics, but the valuation gap and multi-year bout of underperformance are the factors that have had me overweight in small caps all year.
If you’re looking to increase your small-cap exposure in your portfolio, nudging up your allocation to an ETF like IJR or IWM is a simple way to do it (Tyler prefers IJR), but more aggressive investors may want to consider adding individual names to further fine-tune their investments.
So with that in mind, I screened for small-cap stocks that are seeing major growth (in both earnings and share prices), looking for 30%+ earnings growth this year, expectations for 25%+ earnings growth next year, and share prices that have doubled (or more) year to date.
That screen produced a total of 15 stocks that met those criteria, including a handful of recovering names whose earnings growth can be chalked up to a turnaround (making them value plays and not true growth stocks).
It also generated a few notable names that are worth watching as also-rans but who still have some proving to do.
So let’s run through those watchable names before we take a closer look at two stocks that are showing more enduring growth.
3 Also-Ran Small-Cap Growth Stocks to Watch
The first is FuelCell Energy (FCEL), a clean-energy/fuel-cell company that’s increasingly pitching its technology for AI/data-center power and carbon capture. FCEL got its fair share of hype during the 2021 “everything bubble,” when greentech names were in favor, and now it’s making a play as an AI asset.
Shares are up 171.1% in 2026 as the company grows its sales pipeline (up to 4 GW), but its latest quarter saw a decline in revenue and it’s still losing boatloads of money.
I’m all for novel technologies, especially those that are eco-friendly, but with shares down 87.2% over the last five years, I need to see more than just a pivot to AI.
Our next also-ran is Quantum Corp (QMCO), a data-storage company selling infrastructure for large datasets (as well as video and images), with a growing AI/data-storage angle. Revenue in the latest quarter jumped 27% to $78M, and earnings beat expectations by 206%.
The stock is up 256.1% so far this year, but it’s down 76.3% in the last five years and 99.5% from all-time highs before the dotcom bubble burst.
That said, the data storage theme is certainly strong enough to avoid dismissing the stock entirely.
Lastly, let’s take a quick look at Aspen Aerogels (ASPN), a company that makes thermal-barrier and insulation materials that are particularly appealing for their use in EV battery safety (preventing “thermal events” from spreading in batteries).
The company’s materials are 97%-99% air, making them incredibly lightweight and helping them make the rounds online for novelty factor alone.
In 2025 the company inked an agreement with Jaguar Land Rover to provide PyroThin insulation, and the agreement was expanded in 2026 for vehicles entering production in 2027.
The stock is up 100% so far this year, but it’s down 85.4% in the last five years and 46.3% since coming public in 2014.
Given the continuing rapid adoption of EVs globally (and the associated fire risk), the technology itself has promise, although it could easily become obsolete should better battery chemistry emerge.
Now let’s move on to two small-cap growth stocks with a bit less baggage.
2 Surging Small-Cap Growth Stocks
First up is Eton Pharmaceuticals (ETON), a rare-disease pharma company with very strong momentum. Q2 revenue jumped 99% YoY to $37.6M, which was enough to make the company meaningfully profitable and prompt management to raise 2026 revenue guidance from over $120M to over $145M.
It also prompted upgrades from B. Riley, Canaccord, and H.C. Wainwright, and price target hikes to as high as $70 per share (13% higher than the current price).
Eton develops, acquires, and sells medicines for small patient populations where treatment options are limited, for conditions such as adrenal insufficiency, growth disorders, Wilson disease, central diabetes insipidus, and infantile hemangiomas.
The stock is surging right now, up 279.5% so far this year and 1,300% in the last five. A big part of that is the reaction to earnings (up 51.3% since earnings last Thursday), so some cooling off is probably in order, but there’s no denying the momentum shares have right now.
Finally, let’s take a look at Ambiq Micro (AMBQ), a company that makes ultra-low-power chips for edge AI, wearables, and IoT devices.
Edge AI is the big angle here, as AI-enabled devices like smartwatches, fitness trackers, medical devices, smart glasses and industrial sensors need to process AI directly on the device instead of constantly sending data to the cloud. The company’s Atomiq chip even integrates a dedicated neural-processing unit for always-on AI.
Whether there’s an enduring need for not just more AI but more individualized AI is the big question here, but investors are betting that there is, as the stock is higher by 123.4% in 2026 and 71.6% since coming public in August of 2025.
These are just a few of the best-performing small-cap growth stocks of 2026, so if you’re interested in more opportunities in the small-cap space, consider a subscription to Cabot Small-Cap Confidential, where Tyler Laundon brings his years of experience to bear on a segment of the market that is too often overlooked by investors and analysts.
We’ve got a special offer available to new subscribers right now.
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