Small Caps Too Expensive? Anshul Saigal On Valuations, Earnings & Upside

Are small-cap valuations stretched after the recent rally? Anshul Saigal, CIO & Founder of Saigal Capital Advisors, discusses the small-cap outlook amid rising bond yields, higher oil prices and geopolitical uncertainty. Saigal notes that investors who stayed in small caps from September 2024 through March 2026 saw significant portfolio declines before the small-cap index rallied more than 20%. However, he says valuations had undergone meaningful time and price corrections during the earlier period. Saigal also points to improving earnings and credit growth as important tailwinds. He cites around 19% credit growth, strong small-cap earnings growth and 7.8% GDP growth as factors supporting the broader investment case. He argues that investors should focus on earnings alongside valuations and avoid reacting purely to the recent rally when assessing small-cap opportunities.