US small-cap stocks are having something of a moment — and Wall Street doesn’t expect it to end any time soon.

The Russell 2000 Index, home to some of the riskiest stocks in the market because of their strong ties to the business and credit cycles, just ended the longest run of beating large caps since 1996.

While that’s impressive, prior periods that approached such levels of outperformance have failed to persist. Not to worry, strategists say. They’ve grown optimistic on small caps as a way to play a broadening out of the bull run for stocks that’s been powered by Big Tech.

The bet is predicated on expectations for faster earnings growth, owing to a combination of falling interest rates and economic growth. Deregulation, tight credit spreads and more interest rate cuts should also provide tailwinds for these high-beta stocks.

“This channel of strong enough growth – but not too strong – and lower or declining rates are two big macro forces that can push small caps higher,” said Sebastien Page, chief investment officer at T Rowe Price, which manages nearly $1.8 trillion. “We think this can continue for six months.”

Page acknowledges the peril in going long small caps. The group beat the S&P 500 for the first 14 trading days of this year. The streak ended Friday and small caps have trailed the 500-member index since then.

“It’s been a value trap. It’s looked cheap, it’s looked attractive and it has performed a little bit over a couple weeks, and then it’s just been a trap,” Page said.

Still, Page remains broadly overweight small caps, expecting the group to benefit from an economy that is growing while interest rates are still projected to fall.

He’s far from alone, investors and strategists expect the current slump to end and the group to trounce larger-cap peers once again.

“We could see a bit more of a pullback, but then expect small caps to resume their leadership,” Jonathan Krinsky, chief market technician at BTIG LLC, said in a Monday research note.

“Small caps have a macro and fundamental tailwind,” said Dennis DeBusschere, president and chief market strategist at 22V Research. “If AI proves to be a productivity booster, that should benefit most of the companies starting at lower profitability base, like small and mid-cap stocks.”

DeBusschere recommends investors go long regional banks, transportation stocks except for airlines and the consumer discretionary sector.

Investors are also betting that fiscal stimulus, including from tax reforms passed last year, will provide the group a boost in fiscal 2026, given their exposure to the US economy.

“They’re the most American equities you can own,” said Peter Roy, small-cap portfolio manager at Argent Capital. The group derives more of its revenues domestically than their larger cap peers and should benefit from an “accelerating and potentially broadening US economy.”

One risk is that as larger investors rotate into the small-cap space, there is potential for even larger swings in the names given their relative low liquidity. That could mean long-term investors will have to endure heightened volatility.

Traders should plan accordingly, according to Michael Dickson, head of research and quantitative strategies at Horizon Investments LLC. “This relative volatility is going to be more of a norm than an anomaly,” he said by phone.

Mega-cap names like Apple Inc., Alphabet Inc. and Nvidia Corp. each have larger market capitalizations than the entirety of the Russell 2000, whose cumulative market value is $3.6 trillion. Goldman Sachs recently flagged the potential for liquidity to provide a snag as investors rotate out of larger cap names and partially into the small cap space.

Still, many investors see the small caps as a cheap and long-neglected corner of the market currently enjoying multiple tailwinds.

“It’s an under-owned area of the market,” said Horizon’s Dickson. “Valuations are lower for a reason, because of the risk associated with small cap stocks, but it’s a very attractive entry point.”

Coterra Energy Inc. (CTRA) is a Texas-based independent exploration and production company focused on natural gas, oil, and natural gas liquids. Valued at $20.9 billion by market cap, it has a diversified asset base across major shale regions, including the Marcellus Shale, Permian Basin, and Anadarko Basin.

CTRA has declined 1.1% over the past year, trailing the broader S&P 500 Index ($SPX), which rallied nearly 16.1%. However, the stock has staged a notable turnaround in recent months, rallying 16.5% over the past six months, comfortably outpacing the index’s 9.2% year-to-date gain.

Narrowing the focus, CTRA has surpassed the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), which declined about 1.9% over the past year and climbed 5.8% over the past six months.

Coterra Energy shares rose more than 1% on Jan. 21 as natural gas prices surged to a six-week high, lifting U.S. gas producers for a second straight session.

For FY2025 that ended in December, analysts expect CTRA’s EPS to grow 29.2% to $2.08 on a diluted basis. The company’s earnings surprise history is mixed. It beat the consensus estimate in three of the last four quarters while missing the forecast on another occasion.

Among the 25 analysts covering CTRA stock, the consensus is a “Moderate Buy.” That’s based on 17 “Strong Buy” ratings, two “Moderate Buys,” five “Holds,” and one “Strong Sell.”

The current overall rating is bearish than a month ago when the stock had an overall “Strong Buy” rating.

On Jan. 26, Susquehanna analyst Biju Perincheril reaffirmed a “Positive” rating on Coterra Energy and raised the price target to $32 from $31, reflecting increased optimism about the company’s outlook.

The mean price target of $32.46 represents an 18% premium to CTRA’s current price levels. The Street-high price target of $37 suggests an ambitious upside potential of 34.4%.

You can’t build a data center without ensuring it has reliable power. Without electricity, artificial intelligence simply doesn’t work. That’s why AI giants including Microsoft and Alphabet’s Google are entrusting Brookfield Renewable Partners (NYSE: BEP) to help them build out their AI data centers.

Here’s what you need to know about this 5.2%-yielding AI data center play.

What does Brookfield Renewable Partners do?

Brookfield Renewable Partners owns clean energy assets. Its portfolio is globally diversified and includes solar, wind, hydroelectric, battery, and nuclear power. It’s a one-stop shop for any company that’s trying to use renewable power or zero-carbon power such as nuclear energy. Brookfield Renewable Partners signs long-term power supply contracts, generating reliable cash flows to support its hefty yield.

At the end of the third quarter of 2025, the average contract length was 13 years. Roughly 70% of its contracts were indexed for inflation. And 75% of Brookfield Renewable Partners’ revenue was derived from developed countries. This is a stable and reliable business that rewards income-focused investors very well.

The AI opportunity is expanding

The company has deals in place to supply Google with 3 gigawatts of power for data centers. The Microsoft deal is even bigger, encompassing 10.5 gigawatts. These deals are geared toward future developments. Overall, Brookfield Renewable Partners expects to make between $9 billion and $10 billion worth of capital investments over the next five years.

This spending is expected to drive funds from operations growth of 10% or more a year. That, in turn, will support the long-term goal of increasing the distribution by 5% to 9% a year. So this isn’t just a high yield story; it’s also a dividend growth story.

The hidden gem is Westinghouse

What’s most interesting about Brookfield Renewable Partners right now, however, is its investment in Westinghouse. Nuclear power is going through a renaissance. Roughly 85% of Westinghouse’s revenues come from services, but a new $80 billion deal with the U.S. government to build nuclear reactors hints that there could be more to this business than meets the eye, as power-hungry AI data centers push demand for electricity higher.

If you’ve never heard of Brookfield Renewable Partners, now could be the time to dig into this high-yielder. For investors who prefer to avoid partnerships, there’s a corporate version of the business that trades as Brookfield Renewable Corporation (NYSE: BEPC). High demand among institutional investors for the shares, however, leave it with a lower 3.7% yield.

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Will he or won’t he (IPO SpaceX)? That’s the question space investors are asking this year.

For more than a decade, investors have been clamoring for a way to invest in Elon Musk’s rocket ship company, SpaceX. Ten years ago, investors in Fidelity and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) (as it’s now known) stumbled into a SpaceX investment when those two companies participated in a $1 billion round of fundraising that valued SpaceX at $10 billion.

The rest of us weren’t so lucky — and now we learn SpaceX may launch an IPO in 2026 that could value the space company at $1.5 trillion, or 150 times what it cost just 10 years ago.

But what if it doesn’t happen? What if it’s all a head fake?

What Elon Musk says

Recall that, for almost as long as there has been a SpaceX, Musk has steadfastly refused to IPO it. As the CEO used to explain, SpaceX was established to make human life “interplanetary” by establishing a colony on Mars. That would be an expensive endeavor — probably not profitable for years if not decades — and therefore probably not a project that would enjoy widespread support from shareholders in a publicly traded SpaceX.

For this reason, in 2013, Musk preferred to keep SpaceX privately held. He told his Twitter followers a SpaceX IPO would only be possible after the Mars colony was already up and running, and “when Mars Colonial Transporter is flying regularly.” (MCT was one of the original names for the rocket ship now known as Starship.)

Has his thinking changed?

Think $800 billion is a lot? What if I told you it will go to $1.5 trillion?
I’ve got two theories on that score. Here’s the first:

Around the time the internet was buzzing last month about a 2026 SpaceX IPO (that still may or may not happen), SpaceX also sponsored a secondary sale of stock. SpaceX wanted an $800 billion valuation — but as The Wall Street Journal pointed out, “there [was] no guarantee SpaceX will reach the $800 billion value it is aiming for.”

After all, SpaceX’s most recent funding round (in July 2025) had valued the company at just $400 billion. That was up from $350 billion at the end of 2024 (a tidy 14% increase in seven months). Getting a further 100% increase to $800 billion in just five months might have seemed like a stretch. And yet if SpaceX was hinting the $800 billion would definitely turn into $1.5 trillion on IPO day, well, that would be a rocket of an entirely different color.

It might even entice investors to pay the $800 billion valuation SpaceX was seeking.

In fact, that’s precisely what happened. Bloomberg confirms the secondary came off without a hitch, and at $800 billion.

Did I say SpaceX? I meant Starlink.

Did Musk give us a head fake, hinting at an IPO just to ensure his secondary offering was successful? Perhaps. Even if he did, though, that doesn’t mean SpaceX won’t actually IPO in 2026.

It also doesn’t mean SpaceX will IPO.

Consider: Multiple times, Musk has floated the possibility of taking public not SpaceX per se, but SpaceX’s Starlink satellite internet subsidiary instead. As early as 2020, SpaceX had been discussing the potential for a Starlink IPO. Chief Operating Officer Gwynne Shotwell confirmed that “Starlink is the right kind of business that we can go ahead and take public.” Musk himself, in 2021, said he might IPO Starlink once its business became “reasonably predictable.”

In 2022, he clarified that might happen “three or four years from now.”

Would investors be disappointed if Musk IPOs Starlink instead of SpaceX? Again, maybe — but I don’t think so. Starlink produces almost all the profits that SpaceX currently enjoys, after all — perhaps 76% of the $15.5 billion in revenue that all of SpaceX produced in 2025.

Arguably, this could make a Starlink IPO even more tempting for investors. They’d be able to own SpaceX’s cash machine without getting exposed to all the expensive baggage of trying to “Occupy Mars.” This might actually be the best way for SpaceX to raise cash in an IPO — money that the parent company could then use to fund Musk’s Mars colony ambitions.

SpaceX still might decide to IPO in 2026 — but the best idea of all might be to IPO Starlink instead.

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​ByteDance, TikTok’s Chinese parent company, recently established a separate American entity to run the app’s U.S. operations. This restructuring aims to separate U.S. TikTok from its Chinese parent, addressing concerns about data privacy and foreign control.

The move came after years of pressure from lawmakers, who feared the Chinese government’s potential access to Americans’ data. In 2024, Congress enacted a law, mandating that TikTok’s U.S. operations be separated from ByteDance.

​Under the new structure, about 80% of the U.S. TikTok entity is owned by non-Chinese investors, with ByteDance keeping only a 19.9% share. The newly formed entity, “TikTok USDS Joint Venture LLC,” licenses TikTok’s recommendation algorithm from ByteDance and independently manages content moderation, and oversees data protection, algorithm security, and software controls.

The managing investor group consists of Oracle, the private equity firm Silver Lake, and the investment firm MGX. Each holds a 15% stake, totaling 45% of the U.S. business. Here’s what you should know about them.

Oracle

Oracle is a leading cloud computing and database firm that collaborates with top companies, such as OpenAI. Oracle previously attempted to acquire TikTok and already provides cloud infrastructure for the app, managing its U.S. user data.

Under the new deal, Oracle serves as the security partner, auditing TikTok’s compliance with U.S. security requirements, managing data storage, and overseeing updates to the content recommendation algorithm.

It’s important to note that Oracle co-founder Larry Ellison, now the company’s executive chairman and chief technology officer, is a prominent billionaire with known connections to President Trump.

MGX

MGX is an AI-focused investment firm based in the United Arab Emirates, which invests in semiconductors and data centers. The firm was created by Mubadala (Abu Dhabi’s sovereign wealth fund) and G42, an Emirati AI company.

MGX’s stake in U.S. TikTok could give the firm influence over key decisions shaping TikTok’s AI direction. The firm already backs Elon Musk’s xAI, Anthropic, and OpenAI, and contributed to a $100 billion AI data center initiative announced by President Trump, in which Oracle is participating as well.

It’s also worth pointing out that MGX has partnerships with Microsoft and BlackRock.

Silver Lake

Silver Lake, a leading U.S. private equity firm, has long invested heavily in technology companies, including Airbnb, Twitter, Dell Technologies, Tesla, and Waymo. Its role in U.S. TikTok is primarily financial and strategic, offering capital and expertise to help shape the platform’s direction.

Notably, Silver Lake has collaborated with MGX in the past, including during the acquisition of a majority stake in the software and chip company Altera last year. Additionally, Silver Lake has invested in G42 since 2021.

Activist investor Fivespan Partners said on Tuesday that it owns 6.2% of Appian, a cloud computing and ​enterprise software company, and plans to discuss business strategy with its ‌management and board as its stock price has slid.

The San Francisco-headquartered investment firm reported the stake in ‌a so-called 13-D filing which is required when an investor crosses the 5% ownership threshold and intends to push for changes.

McLean, Virginia-headquartered Appian’s stock price has tumbled 86% over the last five years to roughly $2 billion, partly due to investor worries ⁠that artificial intelligence could eat ‌into its business. The stock price closed at $29.89 on Tuesday.

However, a number of investors have called Appian a misunderstood company with ‍extremely loyal customers, including the U.S. government.

While 13-D filings were once filed routinely by blue-chip activists like Bill Ackman’s Pershing Square Capital Management and Carl Icahn, they have not been ​as common in recent years as investors realised they can push for changes ‌with smaller ownership stakes.

A representative for Fivespan declined to comment beyond the filing.

Fivespan, which oversees roughly $1 billion, was founded by several former partners who in 2023 left ValueAct Capital Management, one of the industry’s best-known activist investors.

ValueAct prided itself on fostering enduring and collaborative relationships with target companies. Dylan Haggart, one of Fivespan’s ⁠founders who has spent 10 years at ValueAct, ​has served on the board of data storage ​company Seagate Technology for nearly a decade.

Fivespan also has investments in The New York Times Company, German molecular diagnostics company Qiagen, where ‍Fivespan’s representative Mark Stevenson ⁠joined the supervisory board this week, and advertising company Outfront Media.

The pace of activist investing is exepected to accelerate this year, investors, bankers and ⁠lawyers have said, as investors see a chance to push companies to sell themselves or break ‌apart as the pace of mergers and acquisitions is picking up.

Did your latest energy bill give you sticker shock? You’re not alone.

Energy costs are surging nationwide and outstripping overall inflation. Last year, consumer prices rose 2.7%, but electricity costs jumped 6.7%. Fuel oil — the primary heating source in the Northeast — was up 7.4%, and utility gas spiked 10.8%.

The weekend’s Winter Storm Fern and the preceding blast of cold arctic air are only likely to add to the stress. Extra heating demand has already sent natural gas prices to the highest level since 2022. And consumers’ price fatigue is increasingly catching the attention of politicians: Earlier this month, President Trump noted that utility bills had gone up “MASSIVELY,” which he blamed on data centers.

The rapidly rising costs are placing increasing strain on homeowners and renters. Utility debt was up 31% between the end of 2023 and mid-2025, according to the National Energy Assistance Directors Association, and shutoffs have been rising, too, to an estimated 4 million last year, up from 3.5 million in 2024.

The uptick in costs can’t be blamed on any single reason, energy experts told Yahoo Finance. Instead, a multitude of factors, including the cost of upgrading aging equipment, post-disaster repairs, lingering supply chain shortages, and yes, demand from data centers, all play a role.

Aging infrastructure

America’s power grid is aging. Many of the components that go into delivering power were built more than 50 years ago and are nearing the end of their natural life. The cost of replacing and updating technology like wires, poles, transformers, and towers ultimately ends up being passed on to consumers.

Brattle Group, a consultancy that worked with the Lawrence Berkeley National Laboratory last year to identify factors influencing retail electricity prices, estimates that spending on aging power transmission infrastructure has topped $10 billion a year.

“The distribution system is just getting very old at this point,” said Ryan Hledik, a principal at Brattle who specializes in energy technology regulation and planning. “We have portions of the grid that are 80 years old. We’re needing to invest in replacing aging equipment and maintaining the system at a rate we didn’t have to in the past.”

Lingering supply chain issues from the COVID-19 pandemic, coupled with tariffs today, are also driving up equipment replacement costs: Producer prices on items like wire and cables, transformers, and gear like switches, fuses, and circuit breakers, have exceeded the rate of overall inflation for years.

Climate change

As climate change increases the frequency and intensity of extreme weather, natural disasters, and wildfires, the cost of recovering from those events — and preparing for the next ones — can show up in utility bills as well.

Power companies may impose rate increases or short-term added fees to support recovery efforts immediately after a disaster. Long-term, investing in infrastructure that can stand up to extreme weather — a practice called “hardening” — can also drive up costs.

Climate change-related costs tend to vary widely by state and individual disasters. Power prices in Florida were temporarily hiked after multiple hurricanes devastated the state in 2024, while ongoing wildfire mitigation efforts explain some of the price increases in Western states, especially California and Hawaii.

Natural gas price swings

More than 40% of the US’s electricity is generated using natural gas, and gas prices fluctuate frequently. They often trend higher in the winter because natural gas is also used to heat homes directly. Right now, gas prices are surging as much of the eastern US and the Midwest is enveloped in frigid temperatures.

Beyond seasonal fluctuations, demand for natural gas worldwide is also growing, and the US has been exporting more of it. Those exports can push up natural gas prices stateside and also translate to higher electricity prices.

“We’re going to be sending off a huge amount of our natural gas supply to trading partners, which will create more scarcity of natural gas at home,” said Benjamin Hertz-Shargel, global head of grid edge at Wood Mackenzie, an energy research firm. “At the same time, there will be an increased reliance on natural gas to power data centers and other kinds of large loads.”

Data center demand

Data centers have borne the brunt of recent blame for rising electricity costs, but most experts say they aren’t the largest factor, at least for now.

They used an estimated 4.4% of the nation’s electricity in 2023, though the Department of Energy predicts that share could grow to up to 12% by 2028. Still, it’s true that data center demand — plus the cost of upgrading infrastructure to support that demand — pushes up prices for all types of customers.

Utilities have a number of formulas and rules that help them determine how they cover and share expansion costs and risks, said Matthew McHale, an energy consultant. But they’ve never had so much demand from a single, concentrated industry before.

“They have to adjust their ways of allocating costs or expansion to these large customers,” McHale said.

Some of those changes may be on the way. As public outcry over rising utility costs grows, a number of new state laws and regulations are in the works to ensure data centers pay their fair share for their use. And Microsoft recently said it would pay higher rates to cover the power it uses, and work with local utilities to pay for grid enhancements where needed.

Facebook parent Meta Platforms has signed ​a deal to pay ‌Gorilla Glass maker Corning up ‌to $6 billion for fiber-optic cables for its AI data centers, CNBC reported on Tuesday.

Shares ⁠of Corning ‌jumped more than 7% in premarket trading, ‍while Meta gained marginally. Both the companies did not immediately ​respond to Reuters requests ‌for comment.

Meta has been spending aggressively on building out data center infrastructure as it races to roll out ⁠competitive AI technologies.

Earlier ​this month, the ​company announced its “Meta Compute” initiative to expand its ‍AI infrastructure ⁠and oversee its global fleet of data centers ⁠and supplier partnerships.

Bitcoin staged a minor recovery after a sharp fall Sunday, starting the week on shaky ground as global geopolitical tensions prompted a move away from risk assets and into safe havens such as gold.

The largest cryptocurrency dropped as much as 3.5% on Sunday to a 2026 low of just above $86,000, before paring some of those losses. It hovered around $87,883 as of 6:15 a.m. in New York on Monday, a rise of about 1.6% in the last 24 hours. Ether slumped as much as 5.7% before rallying, still close to its lowest level since mid-December.

“Despite the more constructive set up, BTC is still struggling against a macro environment that has favored gold and other commodities,” said Martin Gaspar, senior crypto market analyst at FalconX.

The dollar hit a four-month low on Monday, falling for a third consecutive day. Gold advanced beyond $5,000 an ounce for the first time.

Bitcoin is often positioned as a digital alternative to gold, promoted by believers as an inflationary hedge and alternative to the precious metal. Some countries, like El Salvador and Venezuela, have amassed large stockpiles of the token.

Exchange-traded funds tracking the spot price of Bitcoin saw five consecutive days of outflows totaling $1.7 billion last week in the US, almost wiping out the previous four days of inflows, according to data compiled by Bloomberg.

Geopolitical concerns such as President Donald Trump’s threat of 100% tariffs on imports from Canada, reports of a large fleet of US warships heading toward Iran and rising odds of another US government shutdown are weighing on overall market sentiment, according to Tony Sycamore, analyst at IG Australia.

Traders also began the week on heightened alert for a Japanese intervention in the market following the yen’s recent slide, and with news of China’s biggest military purge in roughly half a century.

Looking ahead, eyes will be on Wednesday’s interest rate decision from the Fed and press conference, according to Simon Peters, crypto analyst at eToro. “With inflation in the US still above target and not on a downward trajectory, expectations are for the Fed to hold rates at current levels, but traders and investors will be looking for fresh insight into if the Fed sees inflation coming down and potential cuts later on this year,” he said in a note Monday.