Since late 2025, we’ve seen a rotation away from megacap stocks and a broadening of performance towards other market caps, including mid-caps.
Mid-sized companies are often described as the "sweet spot" of investing, combining some of the best features of large and small companies.
Earnings can help drive stocks, and mid-cap earnings growth improved in 2025. And looking ahead, expectations for 2026 are roughly on par with large caps, while mid-caps continue to trade at lower valuations.
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Midcaps - the sweet spot of investing? There are several compelling reasons to consider midcaps, including the broadening of market-cap performance and earnings growth. Justin Livengood, Senior Portfolio Manager, Invesco Discovery Mid Cap Growth Fund, explains why.
