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.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free 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.
-
I want to retire, but I have to keep working so my adult kids have insurance. Help!
It's a tricky period when your adult child is under 26 but needs health insurance. We ask financial experts for advice.
-
Preferred Bank Stocks: The Investment Retirees (and Others) May Be Missing Out On
Most large banks issue preferred stocks that pay out fixed dividends, often with higher yields than bonds. Should you make room for them in your portfolio?
-
Preferred Bank Stocks: The Investment Retirees (and Others) May Be Missing Out On
Most large banks issue preferred stocks that pay out fixed dividends, often with higher yields than bonds. Should you make room for them in your portfolio?
-
Don't Let Your Equity Compensation Trip You Up: A Financial Expert's Guide
Stock options, RSUs and other executive perks can come with some serious strings attached. To avoid a nasty tax surprise, you need a plan.
-
Rally Fades on Mixed AI Revolution News: Stock Market Today
All three main U.S. equity indexes opened higher but closed lower as a seven-session winning streak for the S&P 500 came to an end.
-
The Spendthrift Trap: Here's One Way to Protect Your Legacy From an Irresponsible Heir
A spendthrift clause in an estate plan can protect an inheritance from a financially irresponsible child's debts and poor decisions.
-
Adapting to AI's Evolving Landscape: A Survival Guide for Businesses
Like it or not, AI is here to stay, and opting out could be disastrous for your organization. Instead, focus on what you can control and be flexible, as AI is still evolving.
-
S&P, Nasdaq Hit New Highs: Stock Market Today
A late-day rally wasn't enough to lift the Dow into the green as its six-session winning streak came to an end.
-
AMD Stock Surges on OpenAI Deal
Advanced Micro Devices could see tens of billions of dollars in new revenue from the ChatGPT maker as the AI infrastructure buildout accelerates.
-
These Stocks Dipped in 2025. Do They Have Value?
If you are looking to add new long-term positions to your portfolio, as you should, this is the time to examine stocks that the market shuns.