Small Caps Are Beating the S&P 500 by the Widest Margin Since 2003. Here's How to Invest.

Small-cap stocks are outperforming the S&P 500 by the widest margin since 2003, driven by a closing valuation gap and AI tailwinds reaching smaller companies. The Russell 2000 has surged over 20% in the first half of 2026, with earnings growth estimates rising from 23% to 38% due to AI infrastructure plays. Investors can gain exposure through broad small-cap ETFs.