In this article, we will discuss the 10 Most Shorted Mid-Cap and Small-Cap Stocks to Buy Now.
Small cap and mid cap stocks have been on a roll in the first half of the year as investors rotate away from mega cap tech stocks. Strong earnings acceleration and easing financing costs have increasingly strengthened investor sentiment in the stocks.
Attractive valuations relative to mega-cap stocks, after years of underperformance, have also fueled demand for small- and mid-cap stocks, given their significant upside potential. Consequently, the Russell 2000 index is up by about 18%, nearly double the 9% gain for the S&P 500. The outperformance signals that the stock market rally is increasingly spreading beyond a handful of big companies, as has been the case in previous years.
Waning expectations of interest rate cuts amid soaring inflationary pressures from higher energy prices are one headwind that continues to curtail gains in mid- and small-cap stocks. Additionally, weaker profitability and heavier debt loads around some companies continue to force investors to trim exposure to small-cap stocks rather than add to them, according to Alex Sagal, investment-strategy analyst at Wells Fargo Investment Institute.
“While this may suggest a turning point in relative performance, we believe this recent momentum is masking weakness in underlying small-cap equity fundamentals,” Sagal wrote.
Nevertheless, the best mid and small-cap stocks are of companies with early-stage businesses that have room to expand in their niche. The stocks are expected to shrug off uncertainty around interest rate cuts and slowing economic growth to generate long-term value. With that in mind, let’s take a look at some of the best and most shorted mid-cap and small-cap stocks to buy now.
Our Methodology
To compile a list of the Most Shorted Mid-Cap and Small-Cap Stocks to Buy Now , we used Finviz and Yahoo stock screeners to identify stocks with significant short interest. From that list, we primarily chose stocks with a short float of 20% or above. We trimmed the list to mid- and small-cap stocks with market caps between $300 million and $10 billion. We further trimmed the list by focusing on stocks with upside potential of more than 20%. These equities were further narrowed down based on their popularity among elite hedge funds, as of Q1 2026. Finally the stocks are ranked based on their upside potential (as of June 2).
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Insider Monkey’s quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
10. Globant S.A. (NYSE: GLOB)
Short Float: 20.14%
Market Cap: $1.92 Billion
Stock Upside Potential: 22.24%
Number of hedge fund holders: 25
Globant S.A. (NYSE:GLOB) is one of the most shorted mid-cap and small-cap stocks to buy now. On May 19, Mizuho reiterated an Outperform rating on Globant S.A. but lowered its price target to $59 from $76.
The price target cut is in stark contrast to the company delivering solid first-quarter results at the high end of its growth guidance, while also raising its low-end 2026 growth guidance. The strong quarterly results came in better than expected, despite soft demand amid weak macroeconomic conditions. Revenue in the quarter was down 0.7% year over year to $607.1 million as adjusted diluted earnings per share came in at $1.50. The company also generated $36.1 million in free cash flow.
According to Mizuho, Globant S.A.’s year-over-year organic constant currency growth bottomed in the fourth quarter of 2025. The research firm expects the company’s organic growth to accelerate throughout the year and inflect positively in the third quarter. Second quarter 2026 revenues are expected to be in the range of $610 million to $616 million, with Non-IFRS Adjusted Diluted EPS between $1.45 and $1.55.
Globant S.A. is a digitally-native IT and software development company. It specializes in digital transformation, custom software engineering, and artificial intelligence integration to help global brands reinvent their customer experiences and internal operations.
9. Sarepta Therapeutics Inc (NASDAQ:SRPT)
Short Float: 24.72%
Market Cap: $1.86 Billion
Stock Upside Potential: 25.08%
Number of hedge fund holders: 41
Sarepta Therapeutics Inc. (NASDAQ:SRPT) is one of the most shorted mid-cap and small-cap stocks to buy now. On May 6, Sarepta Therapeutics Inc. delivered impressive first-quarter results as it bounced back to profitability despite facing commercialization challenges with its flagship gene therapy, ELEVIDYS.
Total revenue in the quarter was $730.8 million, a decrease of $14.1 million from $744.9 million delivered in the same quarter last year. The decline was attributed to lower ELEVIDYS sales volume resulting from the updated label, which specifies treatment only for ambulatory patients. The decrease was partially offset by a $253 million increase in collaboration revenue.
Amid a slight revenue decline, Sarepta Therapeutics bounced back to profitability with non–GAAP net income of $385.4 million, or $3.16 a share, compared to a net loss of $332.5 million, or a loss of $3.42 a share, delivered the same quarter last year. Earnings beat analysts’ expectations of $0.99 a share on revenue of $731 million.
The bounce back to profitability was driven by disciplined cost management and a favorable revenue mix. In addition, the company delivered positive cash flow, with cash and investments totaling $748 million. Consequently, it remains well-positioned to fund its pipeline development without tapping the debt market.
Sarepta Therapeutics Inc is a global biotechnology company that engineers precision genetic medicines to treat rare neuromuscular diseases, primarily Duchenne muscular dystrophy (DMD). They develop treatments using three main scientific platforms: gene therapy, RNA technologies, and gene editing.
8. Lyft Inc. (NASDAQ:LYFT)
Short Float: 28.29%
Market Cap: $5.64 Billion
Stock Upside Potential: 36.33%
Number of hedge fund holders: 50
Lyft Inc. (NASDAQ:LYFT) is one of the most shorted mid-cap and small-cap stocks to buy now. On May 14, Bernstein SocGen Group reiterated a Market Perform rating on Lyft Inc. with a $16 price target.
The stance follows discussions with the company’s CEO, David Risher, and CFO, Erin Brewer, centered on the company’s autonomous vehicles and pricing power. The executives reiterated the benefits of a hybrid network and a strategy focused on building deeper relationships with a narrower subset of partners. The Lyft strategy differs from Uber’s broader partner strategy.
The executives also downplayed the North America Rides growth, which decelerated in the first quarter to mid-single digits. According to the executives, growth can fluctuate quarter over quarter. Consequently, they expect growth from higher-end business-to-business services and in international markets.
Lyft delivered another strong first quarter with double-digit year-over-year growth across Active Riders and Gross Bookings. It also achieved $1 billion in cash for the trailing 12 months. Revenue in the quarter increased 14% to $1.7 billion, while gross bookings increased 19% to $4.9 billion.
Lyft Inc. operates a multi-modal digital transportation network. Primarily known as the second-largest ride-hailing company in the United States, it connects passengers with independent drivers and provides access to public transit, shared bicycles, and e-scooters through a single mobile application.
7. CRISPR Therapeutics AG (NASDAQ:CRSP)
Short Float: 30.48%
Market Cap: $5.23 Billion
Stock Upside Potential: 38.03%
Number of hedge fund holders: 32
CRISPR Therapeutics AG (NASDAQ:CRSP) is one of the most shorted mid-cap and small-cap stocks to buy now. On May 27, research firm Citizens reiterated a Market Perform rating and a $60 price target on CRISPR Therapeutics AG.
The stance comes on the heels of the company maintaining a positive view of in vivo editing in cardiovascular disease. Its clinical data, presented at the European Atherosclerosis Society Congress, continues to draw strong interest in gene-editing approaches. That’s because they offer new modalities that can deliver profound and sustained lipid-lowering effects.
The company continues to advance its diversified portfolio of in vivo gene-editing programs, leveraging its proprietary liver-directed LNP delivery platform. For starters, CTX310®, a therapy targeting angiopoietin-like protein 3 (ANGPTL3), is progressing in a Phase 1b clinical trial for severe hypertriglyceridemia (sHTG) and refractory hypercholesterolemia.
CRISPR Therapeutics is also working on CTX460, for the treatment of alpha-1 antitrypsin deficiency (AATD), and CTX340, which targets angiotensinogen (AGT) for refractory hypertension.
CRISPR Therapeutics AG develops transformative gene-based medicines using CRISPR/Cas9 gene-editing technology. Its core focus is modifying specific genes to correct the underlying causes of serious human diseases, including genetic disorders, cancers, and autoimmune conditions.
6. Red Cat Holdings Inc. (NASDAQ:RCAT)
Short Float: 26.64%
Market Cap: $2.25 Billion
Stock Upside Potential: 44.89%
Number of hedge fund holders: 23
Red Cat Holdings Inc. (NASDAQ:RCAT) is one of the most shorted mid-cap and small-cap stocks to buy now. On May 27, H.C Wainwright initiated coverage of Red Cat Holdings Inc. with a Buy rating and a $20 price target.
The research firm remains bullish on the company’s long-term prospects, as it provides a full range of drone, robotic, and maritime defense systems. It develops American-made hardware and software for supporting military, government, and public safety operations across air, land, and sea. The recent acquisition of Apium Swarm Robotics and Canada-based Quaze Technologies has also strengthened its prospects around wireless power.
While operating as an independent unit, Quaze is to continue developing and scaling its wireless power architecture for integration across Red Cat’s Family of systems. The integration seeks to address the remaining barrier to true robotics autonomy.
On the other hand, Red Cat’s maritime division is also ramping into full-rate production of the Variant 7 unscrewed surface vessel, an autonomy platform designed and built for the US and allied defense missions.
Red Cat Holdings Inc. is a drone technology company that develops and supplies uncrewed systems, software, and robotics for military, government, and public safety operations. Their American-made hardware operates across all domains—air, land, and sea.
5. Intellia Therapeutics, Inc. (NASDAQ:NTLA)
Short Float: 39.19%
Market Cap: $1.92 Billion
Stock Upside Potential: 53.97%
Number of hedge fund holders: 35
Intellia Therapeutics, Inc. (NASDAQ:NTLA) is one of the most shorted mid-cap and small-cap stocks to buy now. On May 13, H.C. Wainwright reiterated Intellia Therapeutics as a Buy but lowered the price target to $25 from $30. The price target cut is in response to a recent share offering expected to result in significant dilution.
The company announced a $180 million follow-on equity offering of 16.7 million shares at $10.75 a share. The price offering represents an 18.6% discount to the stock’s closing price following the announcement. While the offering was planned at $150 million, it was upsized to $180 million to generate more gross proceeds.
Amid the price target cut due to dilution concerns, H.C. Wainwright remains bullish with a Buy rating, impressed by Intellia Therapeutics’ top-line results in the Phase 3 lonvo-z trials, with 62% of patients turning out attack-free and therapy-free with no adverse events. The company is planning a regulatory submission for a potential first-half 2027 US launch.
Intellia Therapeutics, Inc. is a leading clinical-stage biotechnology company focused on developing potentially curative treatments using CRISPR/Cas9 gene editing technology. The company aims to permanently modify disease-causing genes in the human body through a single course of treatment.
4. Bob’s Discount Furniture Inc. (NYSE:BOBS)
Short Float: 22.44%
Market Cap: $1.72 Billion
Stock Upside Potential: 56.93%
Number of hedge fund holders: 35
Bob’s Discount Furniture Inc. (NYSE:BOBS) is one of the most shorted mid-cap and small-cap stocks to buy now. On May 7, DA Davidson reiterated a Buy rating on Bob’s Discount Furniture Inc. but lowered the price target to $22 from $24.
The new price target, which comes after the company delivered better-than-expected quarterly results, is 10 times the furniture retailer’s 2027 EBITDA estimate. The research firm remains bullish about the company’s long-term outlook. The Buy rating is impressed by the push for share gains and growth in new markets.
DA Davidson has also touted merchandising initiatives at the back of a push for higher-end products. Omnichannel success and margin improvements also underscore improvements from early-year storm pressures. However, the research firm is still wary of risks that remain around housing conditions.
In the first quarter, Bob’s Discount Furniture achieved earnings per share of $0.09, in line with analyst expectations. As revenues increased 8.5% year over year to $578.1 million.
Bob’s Discount Furniture Inc. is a large-scale American home furnishings retailer that operates over 200 showrooms across 27 U.S. states. The company sells affordable living room, bedroom, and dining room furniture, as well as mattresses and home decor.
3. ImmunityBio Inc. (NASDAQ:IBRX)
Short Float: 35.30%
Market Cap: $7.58 Billion
Stock Upside Potential: 79.39%
Number of hedge fund holders: 25
ImmunityBio Inc. (NASDAQ:IBRX) is one of the most shorted mid-cap and small-cap stocks to buy now. On May 19, Immunitybio Inc. confirmed the US Food and Drug Administration accepted for review the supplemental Biologics License Application (sBLA) for ANKTIVA Plus BCG in BCG Unresponsive Non-Muscle Invasive Bladder Cancer.
The supplemental BLA was accepted for review based on additional scientific data that the company provided to the FDA. The data detailed overlapping features of papillary and CIS disease that pave the way for the expansion of the already approved indication of ANKTIVA for the treatment of patients with BCG-unresponsive NMIBC with papillary tumors.
At the International Society for Pharmacoeconomics and Outcomes Research 2026 conference, Immunitybio detailed the cost savings of ANTKIVA in the treatment of non-muscle-invasive bladder cancer patients with carcinoma in situ. ANKTIVA plus BCG showed cost savings per cystectomy of $109,622 at Year 1, $151,438 at Year 2, and $60,393 at Year 3 compared to TAR-200. The cost savings resulted from lower drug acquisition and administration costs.
ImmunityBio Inc. is a clinical-stage biotechnology company developing next-generation immunotherapies and cell therapies that activate a patient’s immune system to fight cancer and infectious diseases. Their goal is to stimulate both innate and adaptive immune systems to generate long-lasting immunological memory.
2. Capricor Therapeutics, Inc. (NASDAQ:CAPR)
Short Float: 20.87%
Market Cap: $1.65 Billion
Stock Upside Potential: 91.22%
Number of hedge fund holders: 31
Capricor Therapeutics, Inc. (NASDAQ:CAPR) is one of the most shorted mid-cap and small-cap stocks to buy now. On May 13, B Riley reiterated a Buy rating on Capricor Therapeutics with a $63 price target. The positive stance comes as the company enters into a pivotal stage in the potential approval of Deramiocel for the treatment of Duchenne muscular dystrophy.
The company is staring at a potential FDA review of a Biologics License Application (BLA) and a PDUFA target set for August. The agency has already accepted the company’s Class 2 resubmission as complete. Capricor’s GMP manufacturing facility in San Diego has also completed an FDA Pre-License Inspection, with all Form 483 observations addressed. The facility is to support the initial commercial launch.
Manufacturing expansion is expected in the first half of 2027, up from the previous late 2027 timeline. Capricor also remains in a solid financial position to cover anticipated expenses and capital requirements through Q4 2027, excluding any potential revenue from product sales.
Capricor Therapeutics, Inc. is a clinical-stage biotechnology company focused on developing cell and exosome-based therapeutics for rare and serious diseases. Their primary focus is treating Duchenne muscular dystrophy (DMD) through regenerative and anti-inflammatory medicine.
1. Iovance Biotherapeutics, Inc. (NASDAQ:IOVA)
Short Float: 27.48%
Market Cap: $1.77 Billion
Stock Upside Potential: 123.43%
Number of hedge fund holders: 33
Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) is one of the most shorted mid-cap and small-cap stocks to buy now. On May 8, Chardan reiterated Iovance Biotherapeutics, Inc. as a Buy but lowered its price target of the stock to $14 from $16. The price target cut is in response to Amtagvi’s launch guidance.
The company delivered solid first-quarter results driven by growth in the tumor-infiltrating lymphocyte (TIL) therapy Amtagvi. The company also reiterated that it is positioned for long-term revenue growth while advancing multiple ongoing and new clinical trials.
Revenue was up 45% year over year to $71 million, driven by accelerating Amtagvi adoption and a better cost structure. For the second quarter, Iovance Biotherapeutics expects revenue of between $86 million and $88 million, ahead of the street estimate of $84.36 million. Amtagvi’s revenue is expected to be between $79 million and $81 million.
For the full year, Iovance is projecting revenue of $350 million to $370 million, compared with $359.7 million that analysts expect. The full-year guidance underscores confidence in the company’s commercialization of Amtagvi amid strong demand.
Iovance Biotherapeutics, Inc. is a biopharmaceutical company pioneering Tumor-Infiltrating Lymphocyte (TIL) therapies to treat solid tumor cancers. It harnesses the patient’s own immune system by extracting, expanding, and reinfusing these naturally occurring immune cells to recognize and destroy cancer cells.
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