Small Caps Surge 22% in First Half, AI Beneficiaries Lead

Zacks Investment Research··Read original
2▲0 ▼0Impact / 5
Summary · why it matters

Small-cap stocks posted a blistering first half, with the Russell 2000 Index surging 22% through June, its strongest first-half performance since 1991. AI beneficiaries were among the top performers, helping drive the S&P SmallCap Information Technology ETF PSCT up 42% year to date. Many of the Russell 2000's best-performing constituents before the June rebalance, including Bloom Energy, TeraWulf, and Sterling Infrastructure, have now moved into the large-cap index. Chris Tessin, CIO at Acuitas Investments, believes the outlook for small caps remains positive due to rising earnings growth expectations, tailwinds from a deregulatory environment, and renewed investor focus on innovations driven by small-cap companies. Valuations remain attractive relative to large caps, and increased M&A activity has created a strong backdrop for small- and micro-cap stocks.

Impact on assets 3

Energy Transition & Power Demand▲ · 1 stocks
Bloom Energy Corp
BE
± Mixedrelevance

Mentioned as a top performer that moved to large-cap index; no specific news about the company itself.

Artificial Intelligence▲ · 1 stocks
Digital Finance & Tokenization▲ · 1 stocks
Terawulf Inc
WULF
± Mixedrelevance

Mentioned as a top performer that moved to large-cap index; no specific news about the company itself.

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