Small-cap stocks enjoy their best first half in 35 years. Here's what's driving

Small-cap U.S. stocks are capping off one of their strongest first halves in decades. But this is not your ordinary small-cap boom led by traditional businesses linked to the economic cycle.

This run, like the one going on with their larger-cap peers, has been driven by the rapid buildout of AI infrastructure, as spending spreads beyond the largest technology companies to a broader network of suppliers.

Investors believe the small-stock rally can broaden out beyond tech and continue, as long as interest rates stay in check.

The Russell 2000 Index has surged more than 21% this year, putting the benchmark on track for its best first-half performance since 1991. The advance marks a sharp turnaround after years of underperformance versus large-cap peers.

"It's both a valuation catch-up story and a fundamental story," said Amy Zhang, portfolio manager at Alger. "The valuation gap was so wide that a truck can drive through it. At the same time, fundamentals are improving in small caps and I think that's why it's causing the broadening trade."

Semiconductor and semiconductor-equipment companies have been the biggest winners, underscoring how the AI investment boom is rippling through

Fuente original: CNBC Top News (https://www.cnbc.com/2026/06/30/small-cap-stocks-enjoy-best-first-half-since-1991-as-ai-trade-expands.html)