Part 2

Why Consider Small Caps? 

Persistent inflation and higher borrowing costs have weighed on smaller companies this year.

But arguably, the biggest factor has been the dominance of tech behemoths. The concentrated gains in the Magnificent Seven have distorted benchmarks like the S&P 500. Even when small- and mid-caps rally, they simply can’t match the index-level returns propelled by a few AI-driven giants.

From the April 8 low to the end of June in 2025, the Magnificent Seven advanced 37%. A lot of that gain i...

Unlock This Free Guide from Tom Lee’s FSI Academy

Enter your email to read this guide

In addition to your unlocked guide, you will receive our weekly market newsletter FSI Snapshot, as well as occasional updates and offers. You can unsubscribe at any time. For more information, see our privacy policy.

Get unlimited access to Tom Lee’s Fundstrat research Start Free Trial
Already a member? Log in
Intermediate icon
Intermediate
Woe is Small Caps. Can They Outperform Any Time Soon?
4 Lessons
~10 mins in total
Your Progress

Related Guides