The Russell 2000, which tracks U.S. small-cap stocks, has outperformed the large-cap S&amp;P 500 by nearly twofold since the start of August. RBC Capital Markets <a href="https://www.marketwatch.com/story/why-small-cap-stocks-may-be-running-out-of-runway-after-recent-outperformance-7a001b44?mod=home_lead">expects</a>&nbsp;the trend to fade soon, while Morningstar takes the opposite <a href="https://www.morningstar.com/markets/where-invest-when-nothing-looks-cheap">view</a>, arguing that small caps remain relatively cheap.

Small caps beating the S&P 500 MTD in August. Will the outperformance continue?

Thumzup Media Corporation

Shares of micro-cap digital marketing firm Thumzup Media, <a href="https://thumzupmedia.com/about/company-overview/default.aspx">backed</a>&nbsp;by a son of U.S. President Trump, plunged more than 40% yesterday, August 19. The company announced <a href="https://www.thumzupmedia.com/investor-relations/investor-news/news-details/2025/Thumzup-to-Acquire-Dogehash-Technologies-Inc--a-Leader-in-DOGE-Digital-Asset-Mining/default.aspx">plans</a>&nbsp;to merge with Dogehash Technologies, a private Dogecoin and Litecoin miner. Noble Capital Markets <a href="https://www.channelchek.com/news-channel/dogecoin-mining-gets-boost-from-thumzups-50m-investment">thinks</a>&nbsp;the combined entity could become a leading player in the nascent Dogecoin mining industry.

Trump’s son-backed Thumzup Media sinks 40% on deal to acquire Dogecoin miner

For the sixth month now, U.S. President Trump has been waging a zigzagging trade war. Since “Emancipation Day” on April 2, when he announced the <a href="https://www.cnbc.com/2025/04/03/us-tariff-rates-under-trump-will-be-higher-than-the-smoot-hawley-levels-from-great-depression-era.html">largest tariffs</a> in nearly a century, several countries, including the <a href="https://www.nytimes.com/2025/05/07/business/economy/trump-trade-britain.html">UK</a>&nbsp;and <a href="https://www.reuters.com/business/trump-strikes-tariff-deal-with-japan-auto-stocks-surge-2025-07-23/">Japan</a>, along with the <a href="https://www.cnbc.com/2025/07/27/trump-european-union-eu-trade-tariffs.html">EU</a>, have already managed to get a deal done to reduce the new tariffs. On August 11, Trump temporarily <a href="https://oninvest.com/article/tramp-prodlil-na-90-dnej-dedlajn-dla-povysenia-poslin-v-otnosenii-kitaa-smi">delayed</a>&nbsp;the introduction of tariffs on Chinese goods. During this period, shares of large companies climbed to new highs, while the weakness of small-cap stocks became more apparent.

Tariffs weigh on small caps, investors ponder next moves

Soho House & Co Inc.

Shares of Soho House &amp; Co rose nearly 15% yesterday, August 18, to hit a three-year high after the company announced it would go <a href="https://sohohouseco.com/news-and-events/news-details/2025/Soho-House--Co-Inc--Signs-Definitive-Take-Private-Agreement/default.aspx">private</a>&nbsp;in a $2.7 billion deal led by New York-based MCR Hotels. The investor group includes actor Ashton Kutcher, who will join the Soho House board following the transaction.

Soho House stock hits three-year high on take-private bid, Ashton Kutcher involvement

McGraw Hill, Inc.

Seven Wall Street analysts have rated McGraw Hill, the educational publisher that is leaning into AI, a "buy" following its recent IPO. In recent initiations, Deutsche Bank <a href="https://www.cnbc.com/2025/08/18/deutsche-bank-initiates-this-hidden-gem-education-stock-at-a-buy-rating.html">described</a>&nbsp;the company as a “hidden gem,” while JPMorgan <a href="https://www.investing.com/news/stock-market-news/wall-street-analysts-launch-coverage-of-mcgraw-hill-ubs-cautious-goldman-bullish-4198216">called</a>&nbsp;it “a class leader in education.” These endorsements have lifted McGraw Hill’s stock price, though it remains <a href="https://finance.yahoo.com/news/mcgraw-hill-announces-pricing-initial-235000750.html">below</a>&nbsp;the IPO price from less than a month ago.

Wall Street bullish on mid-cap education company McGraw Hill, calls it ‘hidden gem’

Asker Healthcare Group AB

BAWAG Group AG

Since mid-April, the Stoxx Europe Small 200 has <a href="https://stoxx.com/index/scxp/">outpaced</a>&nbsp;the STOXX Europe Large 200, gaining 21% versus 17%. Asset managers surveyed by Bloomberg <a href="https://www.bloomberg.com/news/articles/2025-08-18/money-managers-say-rally-in-europe-s-small-stocks-has-just-begun?srnd=homepage-europe">say</a>&nbsp;the rally in European small caps is only just getting started.

Small caps outperforming large caps in Europe since April – can the momentum last?

Concorde International Group Ltd.

Ostin Technology Group Co., Ltd.

Pheton Holdings Ltd

The moves bear "many of the hallmarks" of pump-and-dump scams

Investors burned for billions in July on Chinese micro caps pumped up online

Opendoor Technologies Inc.

Tudor cut Disney and Broadcom exposure, but bought more of the meme stock Opendoor, up 438% since July

Paul Tudor Jones firm increased stake in Opendoor by 1000% before rally

Repligen Corporation

Graphic Packaging Holding Company

Fabrinet

Legendary small-cap investor Chuck Royce’s Royce Pennsylvania Mutual Fund added 54 new positions in the second quarter and fully exited nearly 70 holdings. Royce is <a href="https://oninvest.com/article/kak-investirovat-v-small-cap-pat-covetov-ot-caka-rojsa-legendy-uoll-strit">regarded</a>&nbsp;as a pioneer in small-cap investing: more than half a century ago, he was among the first on Wall Street to focus on companies with smaller market capitalizations. Whereas Warren Buffett began investing before the S&amp;P 500 index existed, Chuck Royce started a decade before the Russell 2000 was launched.

What Chuck Royce bought and sold in the second quarter

Voyager Technologies, Inc.

Redwire Corporation

MDA Space Ltd.

Intuitive Machines, Inc.

By 2035, the global space economy, from satellite communications to AI-driven analytics, will reach $1.8 trillion, according to <a href="https://www.mckinsey.com/featured-insights/themes/the-space-economy-is-projected-to-reach-1-8-trillion-by-2035">projections</a> by McKinsey and the World Economic Forum in Davos. Yet while most eyes are on Elon Musk’s SpaceX launches or visions of colonizing Mars, the real money is often being made in the less glamorous corners of the industry. One such player is the small-cap Redwire, the Motley Fool <a href="https://www.fool.com/investing/2025/06/25/7-space-stocks-id-buy-without-hesitation/">highlights</a>&nbsp;in a list of seven space stocks to buy "without hesitation." Wall Street <a href="https://www.marketwatch.com/investing/stock/rdw/analystestimates?mod=mw_quote_tab">expects </a>Redwire&nbsp;stock to double, even though the company remains unprofitable.

From space medicine to Mars colony: Redwire believed to offer triple-digit upside

V2X, Inc.

BofA Securities, a brokerage, has upgraded its rating on defense company V2X to “buy,” arguing that the $4.3 billion government contract it won in early August is “just the beginning.” The stock surged on the news.

'Just the beginning': BofA upgrades rating, TP on defense small cap V2X

WEBTOON Entertainment Inc.

The Walt Disney Company

Shares of online comic platform Webtoon Entertainment <a href="https://sg.finance.yahoo.com/quote/WBTN/">jumped</a>&nbsp;more than 80% yesterday, August 13, hitting their highest level in over a year. The gains came on two announcements by the company: a <a href="https://ir.webtoon.com/news-releases/news-release-details/webtoon-entertainment-and-disney-team-bring-fan-favorite-comics">partnership</a>&nbsp;with Disney to publish comics from franchises such as Spider-Man and Star Wars, and quarterly <a href="https://ir.webtoon.com/news-releases/news-release-details/webtoon-entertainment-inc-reports-second-quarter-2025-financial">results</a>&nbsp;that <a href="https://sg.finance.yahoo.com/news/webtoon-entertainment-wbtn-beats-q2-213502185.html">beat</a>&nbsp;Wall Street expectations. In the wake of the news, three analysts have raised their target&nbsp;prices for the stock.

Comic book platform Webtoon's shares soar on Disney deal and earnings beat

The Chemours Company

Dream Finders Homes, Inc.

The Russell 2000 gained around 2% yesterday, while the S&P 500 added just 0.3%, held back by major tech stocks

Small caps outpace Magnificent 7 as investors bet on Fed rate cuts from September

Parrot S.A.

AeroVironment, Inc.

Kratos Defense & Security Solutions, Inc.

In recent years, the U.S. government has stepped up support for the drone industry. Under the Trump administration, Pentagon budgets for unmanned systems have been repeatedly increased, dedicated programs launched, and export restrictions eased. In 2020, during Trump’s first term, Washington <a href="https://www.armscontrol.org/act/2020-09/news/us-reinterprets-mtcr-rules#:~:text=The%2520Trump%2520administration%2520announced%2520on,See%2520ACT%2520%252C%2520July%252FAugust%25202020">revised</a>&nbsp;the Missile Technology Control Regime (MTCR) to allow more flexible exports of large armed drones to allied countries. This year, Trump has <a href="https://dronelife.com/2025/06/12/explained-what-trumps-executive-orders-on-drones-mean-for-u-s-exports/#:~:text=The%2520order%252C%2520Unleashing%2520American%2520Drone,%25E2%2580%259D">signed</a>&nbsp;new executive orders aimed at accelerating testing, boosting domestic production, and promoting U.S. drone exports.

Three U.S. and European drone stocks that could ride recent momentum in sector

Dominari Holdings Inc.

Shares of micro-cap investment bank Dominari Holdings Inc. jumped 25% yesterday after the company, where Donald Trump’s sons are advisors, reported a nearly fivefold year-over-year surge in revenue and swung to a profit from a loss.

Trump-backed, crypto-leaning Dominari Bank posts 450% top-line growth in 2Q25

Alphabet Inc.

Apple Inc.

The cheapest Pixel smartphone will cost $799 in the US

Google revealed new smartphones with an AI focus. Do they threaten the iPhone?

Palantir Technologies Inc.

The papers of one of the AI leaders have been cheaper for six days in a row

Palantir stock has slipped into a bear market. They are still the best performers in the S&amp;P 500 this year

Citigroup Inc.

Meta Platforms, Inc.

QUALCOMM Incorporated

Trump became the first president since the 1970s not to sell assets potentially threatening conflicts of interest

Trump has bought $104 million in bonds since returning to the White House, which companies did he choose

The Estee Lauder Companies Inc.

The company's future is tied to China and the battle for market share in the US

Estee Lauder shares collapse after weak profit forecast due to duty pressure

Target Corporation

Shares of a major U.S. retailer were down more than 10 percent in trading on Aug. 20

Target reported better than Wall Street expectations, but the stock fell. What are investors unhappy about?

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