The Best Small-Cap Stocks to Buy Now
Wall Street's best small-cap stocks to buy include biotech, real estate and software names.


The second half of 2025 could be much more favorable for stockpickers looking for the best small-cap stocks to buy.
That might sound counterintuitive after the way small caps performed through the first half of the year. After all, small caps as an asset class have been a dud. They went nowhere as mega-cap stocks pushed the broader market to record highs.
To recap: the broader S&P 500 gained almost 8.6% on a price basis through early August, while the tech-heavy Nasdaq Composite rose more than 11%. The blue-chip Dow Jones Industrial Average rose just 3.4%, hurt partly by its price-weighted construction.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
But while select Magnificent 7 stocks such as Nvidia (NVDA) and Microsoft (MSFT) helped drive the market's gains, small caps – which tend to be more sensitive to the economic cycle and interest rates – traded sideways.
Indeed, the small-cap benchmark Russell 2000 Index – struggling to stay positive for months – was slightly negative through the first eight months of the year.
If there is a sliver of a silver lining to the Russell 2000's underperformance, it's that small caps are now trading at bargain basement prices.
"As the premium on large caps continues to expand, small-cap equities become increasingly attractive on a relative basis," writes Jeff Buchbinder, chief equity strategist for LPL Financial. "Their lower valuations may signal undiscovered value or underappreciated growth potential, particularly in sectors poised to benefit from domestic policy tailwinds."
And with the Federal Reserve expected to enact several incremental cuts to the federal funds rate before year-end, small caps should have at least one catalyst on the horizon.
Our methodology for finding the best small-caps stocks to buy
In order to find the best small-cap stocks to buy now, we started by screening the Russell 2000 for Wall Street analysts' top-rated names.
Here's how the process works: S&P Global Market Intelligence surveys analysts' stock ratings and scores them on a five-point scale, where 1.0 equals Strong Buy and 5.0 means Strong Sell.
Any score of 2.5 or lower means that analysts, on average, rate the stock a Buy. The closer the score gets to 1.0, the stronger the Buy call.
In other words, lower scores are better than higher scores.
We further limited ourselves to stocks with at least 12 Strong Buy recommendations to ensure adequate analyst coverage and sample size. Lastly, we dug into research, fundamental factors, valuation, analysts' estimates and other data to find the best stocks to buy.
Our screen of the Street's top small-cap stocks served up a list dominated by the health care sector, mostly pharmaceutical and biotechnology companies.
That's to be expected, and investors should always do their own due diligence when considering, say, a clinical-stage biotech firm, which is essentially a speculative investment.
In other cases, some of these names – a gaming stock and real estate investment trust (REIT), for instance – might just surprise you.
And with that, have a look at the table below to see Wall Street's best small-cap stocks to buy now.
Company (Ticker) | Analysts' consensus recommendation score | Subsector | Analysts' consensus recommendation |
---|---|---|---|
Waystar Holding (WAY) | 1.14 | Health care software | Strong Buy |
Kymera Therapeutics (KYMR) | 1.20 | Biotechnology | Strong Buy |
Denali Therapeutics (DNLI) | 1.21 | Biotechnology | Strong Buy |
Genius Sports (GENI) | 1.24 | Casinos and gaming | Strong Buy |
Axsome Therapeutics (AXSM) | 1.26 | Pharmaceuticals | Strong Buy |
Xenon Pharmaceuticals (XENE) | 1.26 | Biotechnology | Strong Buy |
Avidity Biosciences (RNA) | 1.28 | Biotechnology | Strong Buy |
Wave Life Sciences (WVE). | 1.31 | Pharmaceuticals | Strong Buy |
Arcellx (ACLX) | 1.32 | Biotechnology | Strong Buy |
Privia Health Group (PRVA) | 1.38 | Health care services | Strong Buy |
BridgeBio Pharma (BBIO) | 1.41 | Biotechnology | Strong Buy |
Guardant Health (GH) | 1.42 | Health care services | Strong Buy |
Essential Properties Realty Trust (EPRT) | 1.50 | Diversified REIT | Strong Buy |
Related content
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Dan Burrows is Kiplinger's senior investing writer, having joined the publication full time in 2016.
A long-time financial journalist, Dan is a veteran of MarketWatch, CBS MoneyWatch, SmartMoney, InvestorPlace, DailyFinance and other tier 1 national publications. He has written for The Wall Street Journal, Bloomberg and Consumer Reports and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among many other outlets. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange.
Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.
In his current role at Kiplinger, Dan writes about markets and macroeconomics.
Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.
Disclosure: Dan does not trade individual stocks or securities. He is eternally long the U.S equity market, primarily through tax-advantaged accounts.
-
4 Money Habits Boomers Swore By That Millennials Are Walking Away From
Millennials are trading tradition for flexibility when it comes to building wealth.
-
Abu Dhabi Adventures: New Thrills, Iconic Sights and Disney’s Latest Park
Discover the mix of culture, wildlife and modern marvels that make this Middle Eastern city a destination to watch.
-
How Much Do I Need to Retire? A Financial Professional Breaks Down Your Options
What it all boils down to is will you be comfortable in retirement? Some people may rely on formulas, while others just aim for $1 million nest egg.
-
Despite Our Grumbles, America Still Delivers on the Dream: Perspective From a Financial Pro Who's Seen Stuff
Some of us might complain about the state of our nation (and those concerns are legit), but America still offers unparalleled opportunities and mobility that many people around the world only dream about.
-
Dow Rips 846 Points to New All-Time High: Stock Market Today
Fed Chair Jerome Powell seems ready to cut interest rates in the fall but will still rely on incoming economic data about inflation and employment.
-
Bonds Pay in Good and Bad Times
Bonds can act as a financial safety net through good times and bad. But different bonds carry different returns and risks, so do your homework before investing.
-
When You Need Capital Quickly, Think 'Ready, Set, Fund': A Financial Adviser's Strategy
Investors must be able to free up cash to meet short-term needs from time to time. This strategy will help you access capital without derailing your long-term goals.
-
I'm an Estate Planner: Moving Family Assets to a Safe Haven Abroad Could Be a Huge Headache for Your Heirs
In troubled times like these, wealthy clients may seek financial refuge outside of the U.S. But that could cause more tax and estate problems than it solves.
-
S&P 500 Extends Losing Streak Ahead of Powell Speech: Stock Market Today
Stocks continued to struggle ahead of Fed Chair Powell's Friday morning speech at Jackson Hole.
-
A Timeline of Warren Buffett's Life and Berkshire Hathaway
Buffett was the face of Berkshire Hathaway for 60 years. Here's a timeline of how he built the sprawling holding company and its outperforming equity portfolio.