In this article, we will look at the 8 Must-Buy Small Cap Stocks to Buy.
After many years of large capitalization companies dominating the US equities market, time is ripe for rotation. This was the main projection by Rockefeller Capital Management’s 2026 Outlook on Small and SMID Cap Equity. The outlook projected that smaller companies, which are companies with a market capitalization below $2 billion but more than $300 million, will grow earnings at 17% in 2026. This growth is well ahead of the S&P 500’s estimated 14% earnings growth rate. Rockefeller believes this earnings acceleration could trigger a rotation of fund flows away from large caps and into small and small- and mid-capitalization, or SMID caps, and that it views this shift as “directly supportive of small cap performance.”
That thesis is already playing out, according to analyses such as that of Franklin Templeton published on April 8. Franklin Templeton noted that both the Russell Microcap and the Russell 2000 finished the first quarter of 2026 in positive territory; the Russell 2000 gained 0.9% and the Russell Microcap added 1.5%. Contrarily, the Russell 1000 Index, which tracks large cap companies, declined 4.2%, and the mega-cap Russell Top 50 Index fell 7.9%.
To explain the scale of this divergence, Franklin Templeton noted that the Russell 1000 has logged 26 down quarters over the past 25 years, and the Russell 2000 has outperformed its large-cap sibling in only eight of those instances, including Q12026. The only other time small caps posted a positive return during a down quarter for large caps was in the second quarter of 2008, at the height of the Great Financial Crisis.
For the Financial Times’ Robert Armstrong, US small caps are outperforming big caps by 8.5% year-to-date. This is remarkable on its own, but especially so given the chronic underperformance small stocks had endured over the prior six years, Armstrong wrote in the Unhedged column on April 10.
Armstrong identified energy as the key driver behind the shift. Energy is the best-performing sector of 2026 by a wide margin, and which carries a 6.5% weighting in the S&P 600, he said. This is nearly double its 3.5% share in the large-cap S&P 500. He added that small-cap energy stocks are up 41% year-to-date, which is well ahead of the 29% gain posted by large-cap energy.
Against this backdrop, this article highlights eight small-cap names positioned to capitalize on this rotation.
Our Methodology
To compile this list, we used the Finviz Stock Screener to shortlist companies with a market capitalization between $300 million and $2 billion, and filtered for those that have gained more than 50% year-to-date and have upside potential of more than 10% as of April 16, 2026 . We also considered the popularity of these companies among hedge funds using the Q4 2025 13F filings from the Insider Monkey database. The stocks are ranked in ascending order based on the number of hedge fund holders.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
Must-Buy Small Cap Stocks to Buy
8. Pulse Biosciences, Inc. (NASDAQ:PLSE)
Number of Hedge Fund Holders: 7
Year-To-Date Performance: 53.17%
Market Capitalization: $1.39 billion
Stock Upside: 58.56%
Pulse Biosciences, Inc. (NASDAQ:PLSE) is one of the must-buy small cap stocks to buy. On April 7, Pulse Biosciences, Inc. (NASDAQ:PLSE) announced that it had enrolled the first patients in NANOPULSE-AF. This is the company’s US clinical trial testing the nPulse Cardiac Catheter System as a treatment for occasional episodes of irregular heart rhythm that doesn’t respond to drugs, or what the company describes as drug-resistant, symptomatic paroxysmal atrial fibrillation.
According to the press release, the first seven patients were treated at St. Bernards Medical Center in Jonesboro, Arkansas. Dr. Devi Nair of the Arrhythmia Research Group, led the exercise and Dr. Vivek Reddy, Director of Cardiac Arrhythmia Services at New York’s Mount Sinai Fuster Heart Hospital, was the overall principal investigator for the study. The trial plans to enroll about 215 patients across up to 30 centers in the U.S. and Europe, and the primary safety and effectiveness endpoints will be measured at 6 and 12 months post-procedure, the company said.
This trial builds on encouraging results from a prior European first-in-human feasibility study. Here, the company achieved 100% acute success and 96% sustained procedural success at 12 months across 75 evaluable patients. The study achieved these outcomes without anti-arrhythmic drugs. The new US-based study follows the FDA’s grant of an investigational device exemption to Pulse Biosciences in December 2025. This nod gave the company regulatory clearance to begin the study.
Pulse Biosciences, Inc. (NASDAQ:PLSE) is a medical technology company. It develops bioelectric therapies using its proprietary Nanosecond Pulsed Field Ablation (nsPFA) technology. The company is advancing its nPulse platform across multiple applications, including cardiac ablation, tumor treatment, and soft tissue procedures.
7. United States Antimony Corp. (NYSE:UAMY)
Number of Hedge Fund Holders: 18
Year-To-Date Performance: 75.72%
Market Capitalization: $1.49 billion
Stock Upside: 21.59%
United States Antimony Corp. (NYSE:UAMY) is one of the must-buy small cap stocks to buy. On April 10, United States Antimony Corp. (NYSE:UAMY) released a Technical Report Summary, or TRS, for its Fostung Project, which is an intermediate-stage tungsten exploration asset located in Foster Township, Sudbury District, Ontario, Canada.
According to the report, the Fostung Project consists of 50 contiguous single-cell mining claims. This covers approximately 1,109 hectares and hosts a skarn-type tungsten deposit, or scheelite, with associated molybdenum, copper, and silver mineralization. The project is held by UAMY Cobalt Corporation, a wholly owned subsidiary of United States Antimony.
The updated resource model estimates 14.7 million tons of Inferred Mineral Resources at a grade of 0.17% tungsten trioxide, or WO₃, and contain nearly 54 million pounds of WO3. The company classified the resources as “Inferred” because the resources are not “Measured” or “Indicated” at this stage. Also, this means no mineral reserves were established and that the project has not yet demonstrated economic viability.
SRK Consulting (Canada) Inc. prepared the TRS. The firm recommended a roughly $4 million work program to advance the Fostung Project towards a Preliminary Economic Assessment, or PEA. The program should cover 8,000 meters of additional drilling, expanded metallurgical testwork, geotechnical and environmental baseline studies, and updated resource modeling.
The TRS positioned the Fostung Project as one of North America’s larger undeveloped tungsten resources. Also, United States Antimony noted potential eligibility for support under the U.S. Defense Production Act Title III.
United States Antimony Corp. (NYSE:UAMY) is a mining and minerals processing company. It produces and sells antimony, zeolite, and precious metals, and its operations span mining claims, smelting, and refining facilities in North America.