After trailing large-cap stocks for five straight years, small-caps are showing signs of life. With economic conditions shifting and forecasts turning sharply positive, many analysts believe small-caps are set to outperform the S&P 500 next year.
The Federal Reserve just lowered interest rates by 25 basis points in December 2025, its third straight cut since September 2024. With inflation cooling and momentum building, analysts now project Russell 2000 earnings to grow 35% annually over the next two years, far outpacing the S&P 500’s projected 14% growth.
At Bear Creek Capital, we’ve been tracking this shift closely. Through our investment club, we help you connect directly with the small- and micro-cap companies leading this trend, both online and at live investor events across Florida.
For five years, small-cap stocks have lagged. Large-cap tech stocks rode the artificial intelligence wave and dominated returns. But that dominance may be fading. Since late 2025, the iShares Russell 2000 ETF has rallied and briefly edged past its prior all-time high.
| “The market is starting to reward growth outside of big tech. This is where small-cap stocks tend to shine.” – Raymond Oliver, CEO of Bear Creek Capital |
Lower interest rates are key. The Fed’s expected cuts could boost small companies more than large ones. Smaller firms rely more on borrowing and are more sensitive to rate changes. Combined with slowing wage growth and stable inflation, this creates a setup for margin expansion in 2026.
The numbers speak clearly. According to FactSet, Russell 2000 companies are expected to grow earnings by 35% annually through 2027. That’s more than double the 14% projected for the S&P 500.
This growth is paired with relatively stable valuations. The Russell 2000 trades at 23.7 times expected earnings for the next year, just a 5% premium over the S&P 500. In past cycles, that premium has been closer to 15% during periods of rate cuts and economic expansion.
| “Small-caps are finally positioned for a breakout. This is not a speculative call. The data shows earnings growth, better margins, and reduced pressure from labor costs.” – Ramond Oliver |
Another key factor is risk exposure. Small-caps are less tied to the AI infrastructure boom. If that bubble deflates, large-cap tech could stumble while small-caps keep rising.
Several small-cap stocks are already gaining ground and may lead the next phase of the rally. Here are a few names worth watching:
These companies represent different sectors but share a common thread: scalable growth, strong fundamentals, and favorable entry points compared to their large-cap peers.
At Bear Creek Capital, we give our members direct access to companies like these through exclusive investor events and private meetings with leadership teams.
We don’t just share charts and data. We connect you with public small- and micro-cap companies in Pompano Beach, West Palm Beach, and other key locations. You’ll meet decision-makers face to face, ask questions, and learn what’s driving their growth strategies.
“We bring the market to life,” Raymond Oliver says. “When you sit down with a CEO in person, you gain insight that no earnings report can provide.”
Through newsletters, Zoom briefings, and in-person events, our team keeps you ahead of the curve and in direct contact with the most promising opportunities.
The small-cap space is shifting fast. With earnings forecasted to outpace large-cap stocks and investor confidence returning, now is the time to engage.
Our investment club is more than a mailing list. It’s a pipeline to early-stage opportunities and under-the-radar companies that often fly below Wall Street’s radar.
Whether you’re new to small-caps or a seasoned investor looking for deal flow, Bear Creek Capital gives you access to the right doors at the right time. Our Pompano Beach and West Palm Beach investor events help you stay aligned with market leaders, peers, and financial institutions.
The small-cap stocks outlook is strong, and our network helps you act on it. To find out how you can join Bear Creek Capital today, click here.
Raymond Oliver is the CEO of Bear Creek Capital LLC and has led the firm since December 2005. With over 30 years in the financial industry, he brings deep expertise in strategic investing, business development, and public market dynamics. Before founding Bear Creek Capital, he worked in investor relations at Action Products. His market insights guide accredited investors toward informed decisions in small-cap and micro‑cap opportunities.
Disclaimer: This information is for general knowledge and should not be considered financial advice. Before making any investment decisions, consult with a qualified financial advisor. From time to time, Bear Creek Capital LLC may hold positions in some of the companies mentioned in our articles.