%{{tag.tag}} {{articledata.title}} {{moment(articledata.cdate)}} @{{articledata.company.replace(" ","")}} comment After years of underperformance, small-cap stocks are soaring as market uncertainty grows and investors look for alternatives to the artificial intelligence (A.I.) trade. Analysts say that small-cap stocks are quietly stealing the show heading into the year's fourth quarter, having staged an impressive rally since August. In fact, small-cap stocks are closing in on the benchmark S&P 500's gains so far this year and could end up being the surprise winners of 2025. The Russell 2000 index of small-cap stocks is now up 13.7% on the year, while the large-cap S&P 500 has risen 14% year-to-date, according to data from FactSet (FDS). The last time the Russell 2000 outperformed the S&P 500 on a year-to-date basis was on Feb. 6, according to market data. Analysts attribute the rise in small-cap stock prices to concerns that valuations of high-flying technology stocks have reached unsustainable levels. Small-cap stocks now look attractive relative to their large-cap peers, drawing investors who want cheaper valuations combined with growth opportunities. That the Federal Reserve has resumed cutting interest rates is also positive for small-cap stocks that tend to borrow more money to fuel their operations and growth, say analysts. Small-cap stocks that have performed strongly in recent months include Quantum Computing (NASDAQ: $QUBT ) and Urban Outfitters (NASDAQ: $URBN ) to name only a few.