Calamos Manager Says Small Caps Roar in 2027. He Names Two Picks

Brandon Nelson, a portfolio manager at Calamos Investments, says investors are looking at "an excellent setup next year for small-capitalization stocks." His call, featured as MarketWatch's "call of the day" on Sept. 29, 2026, comes with two stock picks: rapidly growing companies providing financial services on your phone.

The argument rests on earnings trajectories. While earnings growth for the S&P 500 (SPX) is expected to slow during 2027, it is expected to accelerate for small-cap stocks, according to the article by MarketWatch columnist Philip van Doorn.

The broader backdrop for 2026 supports the case for profit-driven returns. Despite all the turmoil and rising interest rates, 2026 is showing the power of profit growth to deliver good performance in the stock market, van Doorn writes.

Nelson manages money at Calamos Investments, whose funds include the Calamos Timpani Small Cap Growth Fund (CTSIX). The two names he highlights come from the fintech space — mobile-first financial services — and the referenced symbols in the piece include Dave (DAVE) alongside established players such as Fair Isaac (FICO), Mastercard (MA) and Verra Life (LIFE).

The small-cap trade would run through the usual benchmarks: the Russell 2000 (RUT) and the iShares Russell 2000 ETF (IWM), both referenced alongside the S&P 500 in the article's market tables.

The setup hinges on a divergence that has been building through 2026. If large-cap earnings decelerate while small-cap earnings accelerate into 2027, as the piece's consensus expectations indicate, money rotating out of mega-cap growth could find its next home further down the market-cap ladder — the scenario Nelson is positioning for now.