Is it better to invest in mid-cap or small-cap?

It all depends on your risk tolerance. Mid-cap stocks are generally less volatile than small-cap stocks, but the possibility for big gains is often greater with smaller companies.

Is there a mid-cap ETF?

Yes, the Vanguard Mid-Cap ETF and the iShares S&P Mid-Cap 400 Growth ETF are two low-cost mid-cap funds.

Should I invest in mid-cap stocks?

A diversified portfolio may include mid-cap stocks, depending on your goals and risk tolerance. In general, mid-caps can be a nice way to balance stable large-cap stocks with more volatile small-caps.

Do mid-cap stocks do well in a recession?

During a recession, mid-caps generally do better than small-caps, but not as well as large-caps. Of course, their performance depends heavily on their sector; a mid-cap consumer staples stock, for example, is likely to outperform a large-cap industrials stock.

What is the average return on a mid-cap stock?

According to Morningstar, mid-caps have recorded an 11% annualized return since the 1991 launch of the Russell Midcap index -- better than small caps (9.05%) or large caps (10.4%).

Who should invest in mid caps?

Mid-cap stocks are an ideal tool for diversifying a portfolio that's heavily weighted to small- and large-cap stocks. They're also a nice balance for investors with a moderate risk tolerance level.

Which sectors typically have strong mid-cap stocks?

The technology, healthcare, and consumer discretionary stocks are among the strongest performers in the mid-cap space.

3 Top Mid-Cap Stocks for 2026 and How to Invest

By Frank Bass – Updated Sep 9, 2026 at 12:13 PM EST | Fact-checked by Margo Winton Parodi

Key Points

Mid-cap stocks balance risk and growth, appealing to investors seeking diverse portfolios.
Top 2026 mid-cap companies like Ambarella and CRISPR Therapeutics show high growth potential.
Mid-cap ETFs offer a lower-cost investment option in a broad range of mid-size companies.

Like Goldilocks' chair, mid-cap stocks are the not-too-big, not-too-small companies that are "just right" for investors seeking a balance of growth and profitability. If your portfolio already holds many small- or large-cap companies (or both), adding some mid-cap stocks can help you diversify your portfolio.

Mid-cap companies include fast-growing, young companies that have outgrown their small-cap origins, as well as mature companies operating in stable, profitable market segments. The COVID-19 pandemic made technology more important than ever and helped make some previously small businesses into much larger ones.

While small-cap stocks are often fast-growing but volatile, and large-cap stocks tend to be relatively slow-growing but stable, the best mid-cap stocks are often somewhere in between. Here's a closer look at mid-cap stocks, including how to choose the best ones and how to decide if mid-cap stocks are right for you.

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Table by author.
Category	Market Capitalization
Micro-cap companies	Less than $300 million
Small-cap companies	$300 million to $2 billion
Mid-cap companies	$2 billion to $10 billion
Large-cap companies	$10 billion to $200 billion
Mega-cap companies	More than $200 billion

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3 top mid-cap stocks for 2026

Don't be surprised if you don't immediately recognize the names of every mid-cap stock we highlight below. Some mid-cap companies are household names, but many aren't, especially those that operate in specialized industries.

Here are three interesting mid-cap stocks.

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Ticker Information Table
Name and ticker	Market capMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.	Dividend yield	Industry
Ambarella (NASDAQ:AMBA)	$3.0 billion	0.00%	Semiconductors and Semiconductor Equipment
CRISPR Therapeutics (NASDAQ:CRSP)	$5.1 billion	0.00%	Biotechnology
Valmont Industries (NYSE:VMI)	$9.2 billion	0.61%	Construction and Engineering

Data as of Sep 11, 2026. Showing 3 of 3 total entries.

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1. Ambarella

NASDAQ: AMBA

Ambarella

Premium Feature

Moneyball Superscore

68/100

Today's Change

(-1.30%) $-0.89

Current Price

$66.99

Key Data Points

Market Cap

$3.0B

Day's Range

$66.53 - $68.66

52wk Range

$48.30 - $96.69

Volume

481.3K

Avg Vol

1.8M

Gross Margin

57.51%

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Ambarella (AMBA -1.30%) is a relatively small company in a market segment -- semiconductors, or computer chips -- that is dominated by giants. Ambarella isn't a chipmaker itself; rather, it designs components that then get manufactured by its chip fabrication partners.

Specifically, Ambarella focuses on computer vision (CV) semiconductors, which use artificial intelligence (AI) to help a computer system "see," or recognize what's in a field of vision, and make decisions based on that information. Applications include security cameras and autonomous vehicles, with the latter expected to be a huge growth market in the next couple of decades.

In the "past performance is no guarantee of future results" category, Ambarella stock almost doubled from early April to late May 2026, peaking near $97. But the company's shares had given up about 30% of their gains by early September as investors became concerned about its high cash burn rate and R&D spending.

Although shares had fallen by 54% over five years, a discounted cash flow (DCF) model in August 2026 found shares -- trading around $66 in late summer -- could be undervalued by as much as 22%. In addition, the company was reportedly engaged in preliminary talks in July 2026 about being acquired for $3 billion by NXP Semiconductors (NXPI +4.35%), a Netherlands-based manufacturing and design company.

2. CRISPR Therapeutics

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NASDAQ: CRSP

CRISPR Therapeutics

Premium Feature

Moneyball Superscore

55/100

Today's Change

(-0.24%) $-0.13

Current Price

$52.14

Key Data Points

Market Cap

$5.1B

Day's Range

$51.93 - $53.21

52wk Range

$44.12 - $78.48

Volume

251.5K

Avg Vol

1.6M

Gross Margin

-151066.31%

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CRISPR Therapeutics (CRSP -0.25%) is a biotechnology company co-founded by a Nobel Prize–winning chemist who helped develop the gene-editing technology known as "clustered regularly interspaced short palindromic repeats," or CRISPR.

Biotech stocks are notoriously volatile, but CRISPR Therapeutics is considered among the best in class, largely due to its winning the first Food and Drug Administration approval for its Casgevy gene-editing therapy for sickle cell anemia. It's partnered with Vertex Pharmaceuticals (VRTX -0.22%), which helped boost second-quarter 2026 revenue by $76 million, a 151% year-over-year increase. Total revenue was $10 million for the quarter.

Despite its successes, investors should tread carefully. CRISPR is still unprofitable, posting -$0.94 earnings per share for the second quarter of 2026, but still topping analyst expectations. Still, it's likely to remain a bumpy ride, as clinical updates, regulatory news, and changes in investor sentiment continue to affect share prices. With a market cap of about $5.2 billion in early September 2026, investors are paying a premium for future growth.

3. Valmont Industries

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NYSE: VMI

Valmont Industries

Premium Feature

Moneyball Superscore

67/100

Today's Change

(1.53%) $7.29

Current Price

$484.32

Key Data Points

Market Cap

$9.2B

Day's Range

$481.00 - $489.84

52wk Range

$361.50 - $585.71

Volume

21.5K

Avg Vol

212K

Gross Margin

30.32%

Dividend Yield

0.61%

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Irrigation systems, utility poles, transmission towers, and lighting structures -- for most people, they're mostly afterthoughts. But they're bread and butter for Valmont Industries (VMI +1.53%), a perhaps-boring but underappreciated investment option.

Shares in the Omaha, Nebraska–based industrial company traded around $475 in early September 2026, versus estimates that it could be worth as much as $624.50. Prices have fallen off from mid-summer highs due to a soft farm economy and outsize investor expectations. Still, stockholders have enjoyed a one-year total return of around 30% and a five-year return of nearly 100%.

The company adjusted its fiscal 2026 guidance after an excellent second-quarter report. It now expects earnings per share of $22.25 to $23.50, up from its previous guidance of $21.50 to $23.50. Adjusted earnings for the second quarter were $6.14 per share, besting the analyst community's estimate of $5.80.

Valmont also raised its revenue estimate to $4.3 billion to $4.45 billion, up from the previous guidance of $4.2 billion to $4.4 billion. Second-quarter revenue increased 6.5% year over year to $1.12 billion, ahead of expectations of $1.09 billion.

Mid-cap ETFs

Not sure which individual mid-cap stock or stocks to pick? A mid-cap-focused exchange-traded fund (ETF) can help diversify your portfolio by providing exposure to a wide range of mid-cap stocks. Here are two picks for mid-cap-focused ETFs.

1. Vanguard Mid-Cap ETF

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NYSEMKT: VO

Vanguard Morningstar Mid-Cap ETF

Today's Change

(0.89%) $0.72

Current Price

$81.12

Key Data Points

AUM

$225B

Dividend Yield

4.33%

Expense Ratio

0.03%

Top Holdings

HWM

1.09%

PWR

0.96%

STX

0.92%

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The Vanguard Mid-Cap ETF (VO +0.91%) tracks the performance of the CRSP US Mid Cap index. This fund holds both growth- and value-oriented companies and contained 282 stocks in September 2026. It pays a small dividend and is affordable, with an expense ratio -- the fund's annual management fee -- of just 0.03%.

2. iShares S&P Mid-Cap 400 Growth ETF

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NYSEMKT: IJK

iShares Trust - iShares S&P Mid-Cap 400 Growth ETF

Today's Change

(0.97%) $1.07

Current Price

$111.62

Key Data Points

AUM

$11B

Dividend Yield

0.55%

Expense Ratio

0.16%

Top Holdings

1.91%

TWLO

1.79%

FTI

1.64%

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The iShares S&P Mid-Cap 400 Growth ETF (IJK +0.97%) invests specifically in mid-cap growth stocks. The ETF holds a basket of U.S. stocks (247 in September 2026) with particularly high growth potential but also relatively volatile share prices. This ETF is an inexpensive option, with an expense ratio of just 0.16% annually.

How to invest in mid-cap stocks

Open your brokerage account: Log in to your brokerage account where you handle your investments. If you don't have one yet, take a look at our favorite brokers and trading platforms to find the right one for you.
Search for the stock: Enter the ticker into the search bar to bring up the stock's trading page.
Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
Submit your order: Confirm the details and submit your buy order.
Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.

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Benefits and risks of investing in mid-cap stocks

If mid-cap stocks don't have many or all of the potential benefits of a small- or large-cap stock, investors can take comfort in knowing they also don't have many or all of the potential risks. Among the unique benefits:

Growth potential: Mid-caps still have plenty of room for enormous growth.
Performance: Mid-caps generally outperform both smaller and larger stocks over the long term.
Takeover targets: Mid-caps are still potential merger-and-acquisition (M&A) targets, which can cause their stock prices to leap.

Keep in mind, however, that mid-caps also carry some unique risks:

Price fluctuations: More stable than small caps, mid caps still can be subject to occasional price volatility.
Analyst coverage: Mid-caps often receive less analyst attention than large caps, so investors often have to do their own research.
Financial resources: Again, mid-caps have more resources than most start-ups or small caps, but that doesn't mean they're bulletproof during economic downturns.

Since mid-cap stocks are often former small-caps, finding the best ones is similar to searching for great small-cap companies. You should see a history of sales and profit growth. If a company is lacking either, make sure you understand why.

For mid-cap companies with growth potential, sales should be consistently increasing over time. If sales aren't growing, take that as a warning sign. It's essential to discover a good reason for this before you invest.

A stock's price tends to correlate with the company's profits. If a company's earnings are growing, then its stock price typically rises. If losses are increasing even as sales rise, it's important to understand the reasons.

The bottom line

Whether you're a growth investor, a value investor, or something in between, mid-cap stocks offer the potential to increase wealth in a balanced portfolio without excessive risk.

For investors seeking the best growth stocks, identifying emerging leaders in a field is key, especially in fast-growing segments such as technology, healthcare, and consumer services. Look for companies that are rapidly increasing earnings, especially during an economic boom.

Investors focused on value stocks should start with companies trading below their intrinsic value or facing temporary challenges. If you're looking at income stocks, a strong dividend yield with room to grow is also a good sign.

Investors who favor a mix of growth and value stocks might consider an ETF to balance potential risks and rewards.

Mid-cap stocks can be more volatile than large-cap stocks. Still, they're generally established businesses with growth potential and can be appealing to long-term investors, as well as a key component of a balanced portfolio.

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FAQ: Investing in Mid-Cap Stocks

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About the Author

Frank Bass is a contributing Motley Fool stock market analyst and editor covering energy, healthcare, consumer, and financial sectors. Frank has decades of experience in financial journalism, holding reporting and editing roles at The Wall Street Journal, The Associated Press, and Bloomberg. He also currently edits research on the global energy transition. He holds a bachelor’s degree in journalism from Texas Tech University and is a graduate student at the University of Alaska Fairbanks. Fun Facts: Frank has hiked The Long Trail in Vermont from end to end, and currently lives in a semi-dry cabin in Interior Alaska.

TMFEditFool

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. The Motley Fool has positions in and recommends Meta Platforms and Vanguard Index Funds - Vanguard Mid-Cap ETF. The Motley Fool has a disclosure policy.

3 Top Mid-Cap Stocks for 2026 and How to Invest

Key Points

3 top mid-cap stocks for 2026

1. Ambarella

Key Data Points

2. CRISPR Therapeutics

Key Data Points

3. Valmont Industries

Key Data Points

Mid-cap ETFs

1. Vanguard Mid-Cap ETF

Key Data Points

2. iShares S&P Mid-Cap 400 Growth ETF

Key Data Points

How to invest in mid-cap stocks

Benefits and risks of investing in mid-cap stocks

The bottom line

Related investing topics

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Best Income Stocks for Passive Income

5 Most Undervalued Stocks to Buy in 2026

Safest Stocks to Buy in 2026: Low-Risk Picks for Stability

FAQ: Investing in Mid-Cap Stocks

Is it better to invest in mid-cap or small-cap?

Is it better to invest in mid-cap or small-cap?

Is there a mid-cap ETF?

Is there a mid-cap ETF?

Should I invest in mid-cap stocks?

Should I invest in mid-cap stocks?

Do mid-cap stocks do well in a recession?

Do mid-cap stocks do well in a recession?

What is the average return on a mid-cap stock?

What is the average return on a mid-cap stock?

Who should invest in mid caps?

Who should invest in mid caps?

Which sectors typically have strong mid-cap stocks?

Which sectors typically have strong mid-cap stocks?

About the Author

Read Next

Stocks Mentioned

Motley Fool Stock Advisor’s Latest Pick

Premium Investing Services

3 top mid-cap stocks for 2026

Key Data Points

2. CRISPR Therapeutics

Key Data Points

3. Valmont Industries

Key Data Points

Key Data Points

Benefits and risks of investing in mid-cap stocks

The bottom line

Best International Stocks to Buy in 2026: Are They Right for Your Portfolio?

Best Income Stocks for Passive Income

5 Most Undervalued Stocks to Buy in 2026

Safest Stocks to Buy in 2026: Low-Risk Picks for Stability

FAQ: Investing in Mid-Cap Stocks

Is it better to invest in mid-cap or small-cap?

Is it better to invest in mid-cap or small-cap?

Is there a mid-cap ETF?

Is there a mid-cap ETF?

Should I invest in mid-cap stocks?

Should I invest in mid-cap stocks?

Do mid-cap stocks do well in a recession?

Do mid-cap stocks do well in a recession?

What is the average return on a mid-cap stock?

What is the average return on a mid-cap stock?

Who should invest in mid caps?

Who should invest in mid caps?

Which sectors typically have strong mid-cap stocks?

Which sectors typically have strong mid-cap stocks?

Key Data Points

Mid-cap ETFs

1. Vanguard Mid-Cap ETF

2. iShares S&P Mid-Cap 400 Growth ETF

How to invest in mid-cap stocks