Small caps have been crushing the S&P500 in 2026

• The Russell 2000 rallied from 2,508 to over 2,739 in 2026 (9.22% gain), while the S&P 500 rose from 6,858 to 7,136 (4.05% gain) over the same period.
• Top Russell 2000 performers include Bloom Energy (up 235.94%), Applied Optoelectronics, and Aehr Test Systems, many benefiting from AI boom demand for data center infrastructure and semiconductor equipment.
• Some prominent Russell 2000 names underperformed, including Strategy (up only 4.28%), Super Micro Computer (down nearly 21%), and defense stocks AeroVironment and Kratos Defense (down 23.93% and 21.44% respectively).

Small Caps Outperform S&P 500 in 2026

Key Performance Metrics

Small-cap stocks have significantly outpaced large-cap equities in 2026. The Russell 2000 index, comprising the smallest 2,000 of America's 3,000 largest public companies, rallied 9.22% year-to-date, rising from 2,508 on January 2 to over 2,739 by April 29. In comparison, the S&P 500 gained only 4.05%, climbing from 6,858 to approximately 7,136 during the same period.

Top Performers

The Russell 2000 features over a dozen stocks that have more than doubled in value this year, demonstrating a higher-risk, higher-reward profile compared to the S&P 500's six doublers.

Notable winners include:

• Bloom Energy (BE): Up 235.94% to $291.90, benefiting from the AI boom through its solid oxide fuel cell manufacturing for data centers
• ImmunityBio (IBRX): Strong immunotherapy healthcare stock performance
• Applied Optoelectronics (AAOI) and Aehr Test Systems (AEHR): Semiconductor-related companies leading index gains

For context, S&P 500 top performers included SanDisk (up 348%) and Intel (up 156.78%).

Underperformers

Some prominent Russell 2000 components lagged significantly:

• Strategy (MSTR): Up only 4.28%
• Carvana: Modest 3.94% gain
• SuperMicroComputer: Down nearly 21%
• AeroVironment: Down 23.93%
• Kratos Defense & Security: Down 21.44%

Market Implications

The small-cap outperformance suggests investors are seeking growth opportunities beyond mega-cap tech stocks, with the AI sector benefiting companies across the market capitalization spectrum. However, the wider performance spread in the Russell 2000 underscores elevated volatility and risk.