In this article, we explore the 12 Best Russell 2000 Stocks to Buy Now.
In its Weekly Market Monitor report for the week ending August 8, 2025, Goldman Sachs noted that U.S. equities had firmly recovered from their April lows. The report cited the Bloomberg Magnificent 7 index, which rose 7.8%, and the S&P 500 index, which gained 8.7%. A substantial portion of the rally was attributed to increased retail activity, with stocks popular among retail investors climbing 50% from early April levels. Many of these names are components of the small-cap-focused Russell 2000 Index.
By the week ending August 14, market leadership had shifted from the Magnificent 7 to small caps. Over the five trading days ending August 14, the Russell 2000 advanced 3.43%, outpacing the S&P 500’s 1.78% gain, which was held back by large-cap tech stocks. For context, the Bloomberg Magnificent 7 Index rose just 0.42% in the same period.
According to Larry Tentarelli of Blue Chip Trend Report, small caps are well-positioned to benefit from potential monetary easing. “If the Fed cuts rates in September, this would greatly benefit small caps, as many small caps are levered to the economy and also financially,” he told CNBC. Tentarelli described small caps as a “rate cut rotation” play.
With small caps gaining momentum and potentially poised for further upside, the following analysis highlights 12 Russell 2000 stocks that stand out in the current environment.
A man in black suit holding a tablet looks at stock market data on a monitor. Photo by Tima Miroshnichenko on Pexels
Our Methodology
To identify the 12 Best Russell 2000 Stocks to Buy Now, we used the Finviz screener to select Russell 2000 constituents with a market capitalization above $5 billion. From this group, we focused on companies that had delivered year-to-date (YTD) returns of at least 50% as of August 18, 2025. Next, we considered hedge fund interest in these companies using data from Insider Monkey’s Q1 2025 database. We then ranked the qualifying stocks based on YTD returns, sorted in ascending order.
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. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Best Russell 2000 Stocks to Buy Now
12. Dycom Industries, Inc. (NYSE:DY)
Year-To-Date Returns: 54.14%
Market Capitalization: $7.88 billion
Number of Hedge Fund Holders: 36
Dycom Industries, Inc. (NYSE:DY) is one of the best Russell 2000 stocks to buy now. On July 16, KeyBanc Capital Markets increased its price target for Dycom stock to $295, up from $255. The firm maintained its “Overweight” rating on Dycom’s shares, citing the company’s strong sector positioning and the expectation that telecom infrastructure investments will remain high in the years to come.
Specifically, KeyBanc highlighted Dycom’s position at the start of a multi-year telecom investment expansion. Dycom, the analysts stated, has made robust private investments in fiber. Add to that the ongoing federal and state-funded rural broadband programs, as well as aggressive data center-led fiber builds. KeyBanc expects these initiatives to drive elevated spending in the industry for several years.
The analysts also noted Dycom’s national reach and scale in wireline construction. They stated that this fact gives the company an advantage in competing for contracts and capturing incremental growth opportunities. In that regard, KeyBanc noted that Dycom, as a “telecom pure-play trading at approximately 11.3x FY27 estimates,” does not have its longer-than-usual growth cycle fully reflected in its current valuation.
Dycom Industries, Inc. (NYSE:DY) is a specialty contracting company. It provides engineering, construction, maintenance, and installation services for telecommunications and utility infrastructure. The company operates across the United States, serving major telecommunications providers, cable operators, and utility companies through a network of field offices staffed by over 15,000 employees.
11. AeroVironment, Inc. (NASDAQ:AVAV)
Year-To-Date Returns: 59.15%
Market Capitalization: $12.43 billion
Number of Hedge Fund Holders: 23
AeroVironment, Inc. (NASDAQ:AVAV) is one of the best Russell 2000 stocks to buy now. On August 7, the company announced that it had formed a strategic partnership with Sierra Nevada Corporation (SNC) to develop an advanced air and missile defense system for the Golden Dome for America (GDA) initiative.
The GDA initiative aims to create a layered, integrated air and missile defense system to protect critical U.S. infrastructure from a range of aerial threats. It focuses on “limited-area ‘under-dome’ protection” with the potential to expand coverage as new technologies are integrated.
The planned defense system will use a mix of kinetic and directed energy solutions, radio frequency systems, electronic warfare, cyber capabilities, and both passive and active sensors. It is designed to neutralize a broad range of aerial threats, including Group 1-4 unmanned aerial systems (UASs, also known as drones), advanced cruise missiles, hybrid aerial threats, and coordinated drone attacks. Sierra Space, SNC’s sister company, is also involved and is exploring ways to leverage space-based platforms for early warning, target tracking, and interceptor guidance.
AeroVironment, Inc. (NASDAQ:AVAV) is an American defense contractor and unmanned aircraft systems manufacturer. It designs, develops, and supplies small drones and tactical missile systems primarily to the U.S. Department of Defense and allied nations. The company specializes in intelligence, surveillance, and reconnaissance (ISR) solutions, with its Puma and Switchblade systems widely deployed in military operations.
10. Credo Technology Group Holding Ltd. (NASDAQ:CRDO)
Year-To-Date Returns: 65.51%
Market Capitalization: $20.17 billion
Number of Hedge Fund Holders: 41
Credo Technology Group Holding Ltd. (NASDAQ:CRDO) is one of the best Russell 2000 stocks to buy now. On August 13, Mizuho Securities raised its price target for Credo Technology stock to $135, up from $112. The analysts kept the “Outperform” rating on the company, citing Credo Technology’s expected benefits from artificial intelligence (AI) server deployments at Microsoft, xAI, and Amazon. Additionally, Mizuho anticipates that Credo Technology will add two key customers by the end of fiscal 2026, which the analysts believe will enhance the company’s revenue profile.
Mizuho kept its quarterly and fiscal year estimates unchanged: July quarter estimates remain at $190 million in revenue and $0.37 EPS, while full fiscal 2026 projections are $860 million in revenue and $1.65 EPS, with fiscal 2027 estimates of $1.17 billion and $2.28, respectively.
Credo Technology Group Holding Ltd. (NASDAQ:CRDO) is a fabless semiconductor company. It designs and develops high-speed connectivity solutions for data centers, enterprise networks, and AI infrastructure. The company’s products include serializer/deserializer (SerDes) chiplets, active electrical cables, and optical DSPs that enable efficient data transfer across hyperscale environments.
9. Sterling Infrastructure, Inc. (NASDAQ:STRL)
Year-To-Date Returns: 67.90%
Market Capitalization: $8.57 billion
Number of Hedge Fund Holders: 30
Sterling Infrastructure, Inc. (NASDAQ:STRL) is one of the best Russell 2000 stocks to buy now. On August 5, DA Davidson reaffirmed its “Buy” rating on Sterling. The firm maintained the $265 price target for the stock, citing a stronger-than-expected earnings report.
Sterling reported its Q2 2025 earnings on August 4, delivering adjusted earnings per share (EPS) of $2.69. The EPS was well above both DA Davidson’s estimate of $2.36 and the broader consensus estimate of $2.25. Revenue reached $614.5 million, outperforming DA Davidson’s projection of $552.0 million and the consensus estimate of $554.4 million.
DA Davidson noted that Sterling achieved an adjusted EBITDA of $125.7 million, exceeding its estimate of $114.2 million. As a result of the earnings beat, Sterling increased its full-year guidance, excluding the potential impact of the pending CEC acquisition. The analysts emphasized that their positive outlook is based on the “continued strong performance” and “climbing margins” in Sterling’s E-Infrastructure segment.
Sterling Infrastructure, Inc. (NASDAQ:STRL) is a construction and infrastructure services company. It operates through three segments: Transportation, Building Solutions, and E-Infrastructure. The company specializes in heavy civil construction projects, including highways, bridges, and airports, and also provides site development services for data centers, warehouses, and distribution hubs.
8. BridgeBio Pharma, Inc. (NASDAQ:BBIO)
Year-To-Date Returns: 74.89%
Market Capitalization: $9.43 billion
Number of Hedge Fund Holders: 59
BridgeBio Pharma, Inc. (NASDAQ:BBIO) is one of the best Russell 2000 stocks to buy now. On August 6, TD Cowen reiterated its “Buy” rating on BridgeBio stock and maintained a price target of $60. TD Cowen cited the strong performance of BridgeBio’s drug Attruby, whose sales doubled in the second full quarter of availability, as the primary factor in its decision. The other reason the firm cited was the accelerating rate of new prescriptions per week.
TD Cowen noted that gross-to-net discounts increased from 25% to over 35%, while free drug programs expanded from 45% to between 70% and 80%. The firm considers the improvements as an “indicator of first-line usage.” It also observed some utilization of patient assistance programs, with these metrics now stabilizing.
TD Cowen projected that the increase in free drug patients quarter-over-quarter will drive sales growth, adding that the drug with the best point estimates and lowest price will ultimately prevail in the $10-20 billion drug category managed by insurance companies over time.
BridgeBio Pharma, Inc. (NASDAQ:BBIO) is a biotechnology company. It develops and commercializes therapies for genetic diseases and cancers with clear genetic drivers. The company’s pipeline includes treatments for conditions such as transthyretin amyloidosis, achondroplasia, and various rare metabolic disorders.
7. iRhythm Technologies, Inc. (NASDAQ:IRTC)
Year-To-Date Returns: 76.78%
Market Capitalization: $5.08 billion
Number of Hedge Fund Holders: 31
iRhythm Technologies, Inc. (NASDAQ:IRTC) is one of the best Russell 2000 stocks to buy now. On July 31, the company’s management held an earnings call in which they hailed the records set in Q2 2025, as well as earnings beats. During the quarter, iRhythm’s revenue reached $186.7 million, a 26.1% year-over-year increase. The result beat analyst estimates by $12.7 million (expected: $174 million), a 7.3% positive surprise.
Adjusted EPS for the quarter was –$0.32, which was better than analyst forecasts of –$0.47; a 32.5% beat. Adjusted EBITDA came in at $15.7 million (8.4% margin), exceeding estimates of $11.82 million. Meanwhile, the operating margin improved to –10%, up from –15.5% the previous year.
The company set records for new account openings, long-term monitoring clients, and adoption among integrated delivery networks. Management also noted that international demand is strong, with progress reported in markets such as the UK, Europe, and Japan. They raised the full-year revenue guidance to between $720 million and $730 million (midpoint $725 million), up from $695 million—a 4.3% increase over prior guidance.
iRhythm Technologies, Inc. (NASDAQ:IRTC) is a digital healthcare company. It specializes in the design and commercialization of device-based technologies for ambulatory cardiac monitoring. Its flagship products—Zio XT, Zio AT, and Zio Monitor—are wearable ECG systems that enable continuous heart rhythm tracking for up to 14 days.
6. Hims & Hers Health, Inc. (NYSE:HIMS)
Year-To-Date Returns: 81.17%
Market Capitalization: $10.32 billion
Number of Hedge Fund Holders: 41
Hims & Hers Health, Inc. (NYSE:HIMS) is one of the best Russell 2000 stocks to buy now. On August 18, Truist Securities lowered its price target on Hims & Hers from $48 to $37, while maintaining a Hold rating. Despite an 8% dip over the past week, the stock remains up 195% year-over-year, trading at $46.02.
Truist expects modest GLP-1 revenue growth in Q3 and Q4, aided by deferred revenue and the Zava acquisition, which may help meet the lower end of guidance. However, the firm flagged concerns about 2026 growth, emphasizing its revenue mix analysis over app downloads or MAU metrics.
Hims & Hers Health, Inc. (NYSE:HIMS) is a consumer-focused telehealth company. It provides personalized healthcare and wellness services through a digital platform that connects patients with licensed medical professionals. The company offers treatments across various categories, including sexual health, mental health, dermatology, and primary care.
5. Joby Aviation, Inc. (NYSE:JOBY)
Year-To-Date Returns: 95.12%
Market Capitalization: $13.51 billion
Number of Hedge Fund Holders: 23
Joby Aviation, Inc. (NYSE:JOBY) is one of the best Russell 2000 stocks to buy now. On August 6, the company released its Q2 2025 earnings, reporting an earnings per share (EPS) of -$0.41, which missed consensus estimates by $0.22 (the forecast was $0.19 loss). The company posted a net loss of $324.7 million for the quarter, which included an operating loss of $167.9 million.
Revenue also fell short, coming in at $15,000, significantly below the estimated $43,000. Joby ended Q2 2025 with $991 million in cash and short-term investments. Cash usage for the quarter was $112 million, representing a 10% reduction compared to the previous quarter. The company’s total operating expenses increased 16% year-over-year, driven by research and development (R&D) expenses (+20.7%) and selling, general, and administrative (SG&A) expenses (+0.6%).
Joby projects total cash usage for 2025 to be between $500 million and $540 million. The company is focused on scaling production, progressing regulatory certification, and aviation partnerships globally, including with Toyota and ANA Holdings.
Joby Aviation, Inc. (NYSE:JOBY) is an aerospace company developing electric vertical takeoff and landing (eVTOL) aircraft for commercial passenger service. Its piloted aircraft is designed to carry four passengers at speeds up to 200 mph with zero operating emissions. The company aims to launch an aerial ridesharing service in urban markets, supported by strategic partnerships with Delta Air Lines, Toyota, and NASA.
4. Bloom Energy Corporation (NYSE:BE)
Year-To-Date Returns: 99.57%
Market Capitalization: $10.91 billion
Number of Hedge Fund Holders: 44
Bloom Energy Corporation (NYSE:BE) is one of the best Russell 2000 stocks to buy now. On August 4, Mizuho raised its price target for Bloom to $48 from $31 and maintained its “Outperform” rating on the stock. Mizuho cited accelerated expansion of Bloom’s manufacturing capacity to meet rapidly growing demand for data center power as the core reason for the price target increase.
Mizuho estimated that Bloom will reach two gigawatts (GW) of fuel cell manufacturing capacity by the end of 2026, a three-year advancement from earlier projections that anticipated this milestone in 2029, compared to the current capacity of one GW. The firm also revised its forecast for Bloom’s megawatts sold, projecting a “35% compound annual growth rate (CAGR) from 2025 to 2030,” up from its previous estimate of 20% and higher than the historical 23% CAGR achieved between 2021 and 2025.
Bloom Energy Corporation (NYSE:BE) is a clean energy technology company. It designs and manufactures solid oxide fuel cell systems that generate electricity through an electrochemical process, eliminating the need for combustion. The company’s core product, the Bloom Energy Server, provides reliable, distributed power using fuels such as natural gas, biogas, or hydrogen.
3. NuScale Power Corporation (NYSE:SMR)
Year-To-Date Returns: 100.04%
Market Capitalization: $10.11 billion
Number of Hedge Fund Holders: 18
NuScale Power Corporation (NYSE:SMR) is one of the best Russell 2000 stocks to buy now. On August 11, UBS lifted its price target for NuScale stock to $38 from $34, while maintaining a “Neutral” rating on the stock. The firm cited broad policy support for nuclear energy and significant demand for firm power from data center customers as the key reasons for the price target increase.
UBS noted modest changes in NuScale’s operating expenses and revenue timing in 2025, which were also contributing factors to its decision. UBS remains cautiously optimistic about NuScale and the nuclear industry broadly, citing a supportive policy environment, but notes “historical nuclear delays and cost overruns” as potential concerns. The firm highlighted that “small modular reactor stocks have been highly volatile,” with share prices reflecting broader trends in the nuclear industry.
NuScale Power Corporation (NYSE:SMR) is a nuclear technology company. It designs and develops small modular reactors (SMRs) for clean energy generation. The company’s flagship product, the VOYGR SMR, offers scalable nuclear power solutions with enhanced safety features and lower upfront costs compared to traditional reactors.
2. Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS)
Year-To-Date Returns: 162.74%
Market Capitalization: $11.70 billion
Number of Hedge Fund Holders: 17
Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) is one of the best Russell 2000 stocks to buy now. On August 14, BTIG upgraded its rating on Kratos from “Neutral” to “Buy” and set a price target of $80. BTIG cited Kratos’ selection for the U.S. Marine Corps’ MUX TACAIR unmanned aerial systems program as the primary reason for the upgrade. Analyst Andre Madrid noted that this development addresses previous concerns about the company’s lack of a sizable program of record with steady procurement volumes.
BTIG expressed confidence that Kratos could see substantial growth in its Unmanned Systems division in the coming year. This will come on the back of funding earmarked for the MUX TACAIR program in FY2026. The firm also believes that a broader “approximately $8.8 billion unmanned request” will enhance Kratos’ bottom line. BTIG highlighted potential upside across other segments of Kratos’ portfolio, specifically mentioning opportunities in Kratos Turbine Technologies, C5ISR/Modular Systems, hypersonics, and Microwave Electronics.
Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) is a national security technology company. It develops and manufactures unmanned aerial systems, satellite communications, missile defense systems, and cybersecurity solutions for the U.S. Department of Defense and allied nations. Kratos operates across multiple facilities in the United States with a workforce of over 3,500 employees.
1. Oklo Inc. (NYSE:OKLO)
Year-To-Date Returns: 217.85%
Market Capitalization: $10.25 billion
Number of Hedge Fund Holders: 23
Oklo Inc. (NYSE:OKLO) is one of the best Russell 2000 stocks to buy now. On August 14, Wedbush reiterated its “Outperform” rating on Oklo stock and maintained a price target of $80. Wedbush’s confidence is based on Oklo’s long-term vision, particularly with the Trump Administration’s increased focus on AI Revolution data center development powered by nuclear energy.
Wedbush highlighted that the U.S. Department of Defense is becoming an increasingly important customer and partner for Oklo moving forward. The firm emphasized the connection between nuclear energy and the “4th Industrial Revolution,” stating that Oklo is well-positioned to benefit from this trend. Oklo’s advanced small modular reactor (SMR) technology, specifically the Aurora Powerhouse being developed for commercial operation by 2027 or 2028, is directly tailored for these markets.
Wedbush’s decision comes only a short while after Oklo’s successful completion of Phase 1 of its Nuclear Regulatory Commission (NRC) readiness assessment for its Aurora-INL combined license application. The firm stated that the NRC identified no significant findings, allowing Oklo to proceed with its initial application, which it plans to submit in early Q4 2025.
Oklo Inc. (NYSE:OKLO) is an advanced nuclear technology company. It designs and develops compact fast reactors and nuclear fuel recycling systems to provide reliable, carbon-free power. The company’s flagship product, the Aurora reactor, can generate 15–50 megawatts of electricity and operate for up to a decade without refueling.
While we acknowledge the potential of Oklo Inc. (NYSE:OKLO) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than OKLO and that has 100x upside potential, check out our report about the cheapest AI stock.
READ NEXT: 10 Best Energy Stocks to Buy For the Long Term and Top 10 Industrial Stocks to Buy Amid Easing Tariff Uncertainties.
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