In this article, we’ll look at the 15 Best Small Cap Stocks to Buy According to Wall Street.
Small-cap stocks are beginning to draw renewed attention in 2026 as investors reassess where the next leg of returns could come from. After years of heavy concentration in mega-cap names, attention is drifting further down the market cap ladder.
Goldman Sachs Asset Management makes that shift explicit in its Investment Outlook 2026, writing, “Further down the market capitalization spectrum—in the small and mid-cap space—we see potential opportunities among enablers, so-called ‘picks and shovels’ of the AI boom.”, suggesting that some of the more interesting exposure to structural themes like AI may sit outside the largest companies, particularly among businesses supplying the ecosystem rather than dominating headlines.
Rates also matter. Goldman notes that “Easing cycles also represent a potential tailwind for rate-sensitive asset classes, like small-cap stocks,” a reminder that smaller companies tend to feel the impact of financial conditions more directly. Lower rates can ease funding pressure and support multiples. The firm goes further, stating, “We also believe small caps in the US and internationally offer compelling opportunities driven by anticipated rate cuts and accelerating earnings.” Explaining that the setup is not just about valuation gaps, but about earnings momentum and macro relief converging at the same time.
In view of this, we look at the 15 Best Small Cap Stocks to Buy According to Wall Street.
Our Methodology
To identify the 15 Best Small Cap Stocks to Buy According to Wall Street, we used the Finviz screener to generate a list of small-cap stocks. We then used CNN analyst ratings compilation to determine the median upside for each stock as of February 12, 2026, and ranked the 15 stocks according to their upside potential. We have also included the number of hedge funds that hold the stock as of Q3 2025.
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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
15. Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD)
Market capitalization: $1.15B
Potential upside: 0.29%
Number of Hedge Fund Holders: 30
On February 12, 2026, Texas Capital analyst Alex Rygiel downgraded Great Lakes Dredge to Hold from Buy with a $17 price target after Saltchuk Resources announced a definitive agreement to acquire the company for $17 per share in cash.
The announcement followed a February 11, 2026, joint statement from Great Lakes Dredge & Dock Corporation and Saltchuk Resources outlining a transaction with an aggregate equity value of approximately $1.2 billion and a total value of $1.5 billion. Saltchuk will launch a tender offer to purchase all outstanding shares at $17.00 per share in cash, representing a 25% premium to Great Lakes’ 90-day volume-weighted average price as of February 10, 2026, and a 5% premium to its all-time high closing price.
The boards of both companies unanimously approved the agreement and recommend shareholders tender their shares. The offer is expected to close in the second quarter of 2026, subject to customary conditions including the expiration of the Hart-Scott-Rodino Act waiting period and the tender of a majority of outstanding shares. After completion of the tender offer, Saltchuk will acquire the remaining shares through a second-step merger at the same price. Upon closing, Great Lakes will operate as a standalone business within Saltchuk and will no longer be listed on Nasdaq.
Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) provides dredging services in the United States, including port expansion, coastal restoration, land reclamation, and marine infrastructure projects.
14. Fastly, Inc. (NASDAQ:FSLY)
Market capitalization: $2.73B
Potential upside: 7.41%
Number of Hedge Fund Holders: 24
On February 12, 2026, Fastly, Inc. (NASDAQ:FSLY) reported fourth-quarter revenue of $172.61 million, ahead of the $161.36 million consensus estimate. CEO Kip Compton said the quarter marked “an inflection in Fastly’s growth” with record revenue, gross margin, and operating profit. He added that 2025 reflected significant progress in the company’s transformation and said AI is expected to serve as an increasing tailwind in 2026. Fastly sees fiscal 2026 revenue in a range of $700 million to $720 million, compared with consensus estimates of $667.79 million.
Ahead of the report, on February 9, 2026, DA Davidson lowered its price target on Fastly, Inc. (NASDAQ:FSLY) to $9 from $11.50 and maintained a Neutral rating. The firm said it was constructive on the quarterly setup, citing recent share price action and management commentary around traffic growth and pricing during intra-quarter discussions and investor meetings. Earlier, on January 16, 2026, Citi analyst Fatima Boolani reduced her price target to $10 from $12 and kept a Neutral rating as part of a broader 2026 outlook for infrastructure software. Citi said it expects the sector’s 2025 momentum to continue into the new year.
Fastly, Inc. (NASDAQ:FSLY) operates an edge cloud platform that processes, delivers, and secures applications across the United States and international markets.
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