7 Best-Performing Small-Cap Stocks for February 2024

Small-cap stocks can bring diversification and higher growth potential — albeit with higher risks — to a portfolio. Here's what to know before investing.
Anna-Louise Jackson
By Anna-Louise Jackson 
Updated
Edited by Robert Beaupre
Understanding Small-Cap Stocks

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.


The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.

Investors salivate over the biggest companies in the market — the likes of Apple, Google and Amazon — but where’s the love for the market’s perpetual underdogs: small-cap stocks?

When these investments do get some time in the limelight, it’s often for unflattering reasons — violent price swings or fraudulent activity, for example. Small caps can diversify portfolios and bring higher growth potential — albeit with higher risks.

What are small-cap stocks?

Small-cap stocks are company shares with market values between $250 million and $2 billion, though that range isn't universal.

"Cap" is shorthand for market capitalization, or the total number of a company’s shares multiplied by its current stock price.

The definition of small when it comes to stocks is subjective. The Russell 2000 Index, the first benchmark of small-cap stocks, is the best-known gauge. The market caps of its member companies currently range from about $240 million to $6 billion. The other major indexes tracking these stocks — the Standard & Poor’s SmallCap 600 and the MSCI USA Small Cap Index — include U.S. companies with even broader ranges of market caps.

Advertisement
NerdWallet rating 

4.9

/5
NerdWallet rating 

5.0

/5
NerdWallet rating 

4.9

/5

Fees 

$0

per online equity trade

Fees 

$0

per trade

Fees 

$0

per trade

Account minimum 

$0

Account minimum 

$0

Account minimum 

$0

Promotion 

None

no promotion available at this time

Promotion 

None

no promotion available at this time

Promotion 

Get up to 75 free fractional shares (valued up to $3,000)

when you open and fund an account with Webull.

Best small-cap stocks, ordered by one-year performance

Below is a table of the seven best-performing stocks that are listed on major U.S. exchanges and have a market cap under $10 billion, ordered by one-year returns.

Ticker

Company

Performance (Year)

SLNO

Soleno Therapeutics Inc

1512.37%

AMAM

Ambrx Biopharma Inc.

1369.84%

MYO

Myomo Inc

595.36%

AAOI

Applied Optoelectronics Inc

591.21%

ACIC

American Coastal Insurance Corp

553.76%

IMGN

Immunogen, Inc.

538.26%

EYPT

EyePoint Pharmaceuticals Inc

511.80%

Source: Finviz. Stock data is current as of February 1, 2024, and is intended for informational purposes only.

Small caps historically have a relatively high correlation — meaning they tend to move in lockstep — with large-cap stocks. But which group is performing better than the other over a given time frame fluctuates regularly, based on factors such as macroeconomic growth and politics.

Why small-cap stocks are risky

As small-cap businesses expand, their stocks offer a higher growth potential compared with larger companies. But that comes with a greater risk of volatility — including more (and bigger) fluctuations in stock prices and earnings reports. This trade-off is known as the risk premium.

Small-cap stocks can also be more fertile territory for fraudulent activity.

Why small-cap stocks are mighty

The sheer number of small-cap stocks means there’s a plethora of options for investing in them. What’s more, the proliferation of exchange-traded funds has made it easier to buy a basket of stocks with a specific investing strategy — growth or value, for example. Small caps can be an underappreciated — or even overlooked — way to add diversification to your portfolio.

Why small-cap stocks are not that different

It’s important to know what makes small-cap stocks distinctive, but you shouldn’t necessarily obsess over the differences. They have a lot in common with the others that might be in your portfolio: They trade on exchanges, their prices are published intraday, Wall Street analysts write research reports about them, and by virtue of being public, these companies must disclose a wealth of information to investors.

Ready to go small? See NerdWallet’s tool to find the best stock broker for your needs.

More on stock investing

AD
Robinhood
NerdWallet rating 

on Robinhood's website

Get more smart money moves – straight to your inbox
Sign up and we’ll send you Nerdy articles about the money topics that matter most to you along with other ways to help you get more from your money.