In this article, we will take a look at some of the best micro-cap stocks to buy now.
Just as we overlook loose change, micro-cap stocks are often ignored for larger, more dominant enterprises. Investors trying to play safe ignore the fact that every strong stock was once a micro-cap stock. This niche segment of the market offers higher risk and, if successful, higher returns, particularly present in emerging industries where there is potential to outperform peers.
This leads us to the basic definition of micro capitalization — stocks are considered micro-cap if the market capitalization of publicly traded companies is less than $250 million. Few analysts and institutions cover these stocks, and mainly operate under the radar. The basic features involve earlier stages of development, more volatility, and significant liquidity constraints. Best suited for investors with high tolerance, these stocks are vulnerable to market manipulation, debt levels, price swings, and greater regulation and legislation. So, one might ask: what’s in it for me?
With the Russell small-cap index soaring last year, mega-cap stocks mainly stayed behind the scenes. Various studies highlight that micro-cap stocks generate additional shareholder value, even after making risk adjustments. Apart from the 2007-08 financial crisis, micro- or small-cap stocks have generally outperformed large-cap stocks. A report by Oberweis Asset Management outlines that micro-caps generate higher returns than small-cap stocks as they behave differently from other asset classes, particularly when coming out of economic stagnation.
Most analysts have a positive stance on investing in these small stocks with big returns. For instance, Saxo Group, in their article on micro-cap stock made the following comment:
“Micro-cap stocks can provide substantial upside because they represent companies in the earlier stages of development. With fewer investors, micro-caps have greater room to grow as they expand operations and gain recognition in their industry.”
Underestimating these stocks results in a missed opportunity and is reflected in an old saying: “A day late and a dollar short.” It is essential to realize the potential of these stocks to fully capitalize on the company’s revenue growth.
The advocacy for micro-cap stocks is stronger now more than ever, with monetary policy easing, Trump’s pro-business approach facilitating mergers and acquisitions, attractive valuations, and reshoring trends.
Boston Partners, in their white paper, wrote:
“Historical analysis shows that over time, actively managed, value-oriented micro-cap funds tend to outperform private equity.”
Thus, with low price valuations by the investors, these stocks will continue to offer returns that surpass the returns from private equity fund investments. In view of this, we will take a look at some of the best micro cap stocks to invest in.
A stock market graph. Photo by energepic.com
Our Methodology
In this article, we have considered the 10 best microcap picks, arranged in ascending order according to their market capitalization, that have the potential for growth, given the market potential and successful mergers and acquisitions. Spread across a range of industries, from biopharma to AI, these stocks have a story to tell. The companies listed are mostly in their early stages of development, so they have upside potential. Although price volatility is high, these micro-cap stocks extend opportunities to investors willing to accept greater uncertainty for growth prospects. The stocks are ranked in ascending order of their market cap, as of March 4, 2025.
At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. Conduit Pharmaceuticals Inc. (NASDAQ:CDT)
Market Capitalization: $5.55 million
Conduit Pharmaceuticals Inc. (NASDAQ:CDT) is a Naples, Florida-headquartered clinical-stage biopharmaceutical company that provides clinical assets in the areas of autoimmune disease and idiopathic male fertility. Formed in 2019, the company is one step ahead of the traditional biotech business model as it seeks assets that are Phase II ready and undergoes third-party license deals upon successful clinical trials. The overall strategy involves fulfilling medical gaps, acquiring intellectual property for its assets using cutting-edge technology, and commercializing these products with life science companies. CDT is among the best micro-cap stocks to buy now.
Conduit Pharmaceuticals Inc. (NASDAQ:CDT) recently announced the completion of Phase I of its partnership with Sarborg Limited. The Phase II of this collaboration focuses on AI and cybernetics in drug development. As the plan proceeds, differentiated dashboards will be created to enhance efficiency, and real-time data on clinical trials and drug discovery will be provided. This development underscores Conduit’s attempts to structure drug repurposing and improve clinical trial monitoring.
In this world of AI, the collaboration between Conduit Pharmaceuticals Inc. (NASDAQ:CDT) and Sarborg Limited marks a significant technological milestone in the pharmaceutical industry, with benefits beyond mere process automation. While Phase I laid the foundation for AI integration, Phase II will ensure accelerated product optimization using AI insights for the company.
Keeping this in consideration, Wall Street research analysts have maintained a Strong Buy rating on Conduit Pharmaceuticals Inc. (NASDAQ:CDT). Additionally, the stock seems to be more preferred by analysts in contrast to other medical companies, with a positive trend surrounding the stock, particularly in the short run. It is safe to conclude that for investors seeking short-run benefits, CDT is one of the best micro-cap stocks to consider.
9. Cyclo Therapeutics, Inc. (NASDAQ:CYTH)
Market Capitalization: 23.079 million
Cyclo Therapeutics, Inc. (NASDAQ:CYTH) is a clinical-stage biotechnology company, thriving to develop life-changing medicines aimed at patients with challenging diseases. Incorporated in 1999, this Gainesville, Florida-based company’s lead drug candidate, Trappsol Cyclo, is currently in Phase III trials for the treatment of Niemann-Pick Type-C disease and Phase IIb trials for the treatment of Alzheimer’s disease. Not limited to this, the company also offers products related to pharmaceutical, nutritional, and other industries. With a market cap of over $23 million, CYTH is one of the best micro cap stocks on our list.
With the stock price soaring by 22.2% year to date, one can’t ignore the story that this stock is telling. It is among the best micro-cap stocks to buy now. The talks surrounding a merger between Cyclo Therapeutics, Inc. (NASDAQ:CYTH) and Rafael Holdings are causing a stir. The potential of this collaboration is high, with strengthened synergies and strategic alignment. It will also allow the company to take full advantage of Rafael’s broader capital base and resource access.
Cyclo Therapeutics, Inc. (NASDAQ:CYTH) participation in the 21st Annual WORLDSymposium gives yet another insight into the future of the company. While the stakes of Phase-III trials are high, driven by Niemann-Pick Disease Type C1 (NPC1), the exceptional rarity of this disease could enable the company to tap the untapped.
Although the financials of the company imply a somewhat different story, major happenings, like the merger and identification of a niche market, carry immense weight. The financial hurdles faced by the company can be considered negligible in the face of new avenues for future growth.
8. American Strategic Investment Co. (NYSE:NYC)
Market Capitalization: $27.298 million
American Strategic Investment Co. (NYSE:NYC) is a U.S.-based company that owns a portfolio of commercial real estate situated in the five boroughs of New York City, mainly Manhattan. The core offering of the company includes office properties and real estate assets accompanying those properties. With a market cap of nearly $28 million, the company also invests in retail spaces with amenities, hospitality assets, residential assets, and other property types exclusive to New York City.
Over the last few days, American Strategic Investment Co. (NYSE:NYC) witnessed a surge of purchases, with significant transactions by Nicholas S. Schorsch, a notable representative of Bellevue Capital Partners. At the same time, key developments surround the company. It recently finalized the sale of its 9 Times Square property, located in Midtown Manhattan, receiving $63.5 million in net proceeds. This transaction is a representation of the giant’s efforts to strategically expand its operations, with earnings targeted at acquiring higher-yielding assets.
American Strategic Investment Co. (NYSE:NYC) also plans to sell properties at 123 William Street and 196 Orchard in an attempt to diversify its portfolio. We can’t help but notice the company’s dedication towards asset management and value enhancement for its shareholders. And a testament to this commitment is highlighted through the rise in the stock price. The plans of the real estate powerhouse are clear, but if we go deeper, the success entirely depends on the management’s ability to follow this proactive approach.
7. RF Industries, Ltd. (NASDAQ:RFIL)
Market Capitalization: $42.705 million
RF Industries, Ltd. (NASDAQ:RFIL) is a California-based global connectivity powerhouse. Incepted in 1990, the company designs, manufactures, and markets interconnect products and systems, namely coaxial and specialty cables, electric and electronic specialty cables, and fiber optic cables and connectors. With mainly two segments: RF Connector and Cable Assembly, and Custom Cabling Manufacturing and Assembly, the operations of the company are spread across the United States, Canada, Mexico, and internationally. RFIL is among the best micro-cap stocks to invest in.
In this world of wireless connectivity, any company providing physical internet products is considered to be targeting a niche market. At the heart of RF Industries, Ltd. (NASDAQ:RFIL) lies Small Cell 5G Networks, which basically act as an outdoor hotspot application. The basic requirement of such a network is to hide itself from the public view or otherwise physical distractions. This makes it a potentially high-growth sector.
On that note, management has a clear vision for RF Industries, Ltd. (NASDAQ:RFIL). They are aiming towards a more transformative model by providing considerably full solutions within the turnkey systems and applications. They will be employing innovative sales and marketing resources amidst their efforts to adopt newer products and mixes. With a return of nearly 32% over the past year, the vision of the company is what will direct it to a brighter future. Aiming towards an adjusted EBITDA of 10% of sales or higher, RFIL is definitely for long-term thinkers.
6. MIND Technology, Inc. (NASDAQ:MIND)
Market Capitalization: $58.894 million
Mind Technology, Inc. (NASDAQ:MIND) is a technology and solution provider for exploration, survey, and defense applications in oceanographic, hydrographic, defense, seismic, and security industries. Formed in 1987 and headquartered in Texas, USA, the company has two product lines, Klein Marine Products and Seamap Marine Products. With the Klein Marine segment sold to General Oceans in August 2024 for $11.5 million, the revenue is generally obtained from the Seamap Marine product line. Among the core offerings of the company are GunLink seismic source and control systems, BuoyLink RGPS tracking system, and Seamap Sleeve Gun.
Over the past year, the stock has delivered returns of 20%, much of which has to be attributed to a strong backlog and pipeline of orders. With a strong demand outlook in the marine industry, we are optimistic about the future of Mind Technology, Inc. (NASDAQ:MIND).
The company is seeking ways to expand its market share by developing innovative ways to shape its technology to meet the evolving needs of its customers. A testament to this approach is the sales and inquiries surrounding SeaLink streamer systems. Through the sale of Klein, Mind Technology, Inc. (NASDAQ:MIND) didn’t just make the transaction but it secured the future. In its deal with General Oceans, the company licensed its Spectral Ai software suite for applications like side-scan sonar. This is a strategic move to expand the market for Spectral Ai, and although the revenue stream has been somewhat limited, MIND is now gaining traction.
Mind Technology, Inc. (NASDAQ:MIND) started Q4 2024 with a robust backlog of $26 million, a figure much above the historical standards. With this surge in order flow and activity, a considerable volume will be completed and shipped in the current year. Moreover, the company has a significant stream of pending and potential orders, anticipated to be twice the size of the current backlog, that will fuel the growth into FY26.
While the highest price target for MIND is expected to be $14.16, the lowest stands at $5.13. According to analysts at CNN Business, the stock has a strong likelihood to outperform the market.
5. Taylor Devices, Inc. (NASDAQ:TAYD)
Market Capitalization: $101.064 million
Taylor Devices, Inc. (NASDAQ:TAYD) is a New York-based powerhouse involved in the design, development, and marketing of shock absorption, rate control, and energy storage devices for use in capital equipment. The core offerings of the company include Seismic dampers, Fluidicshoks, Crane and industrial buffers, and Vibration Dampers. With over 60+ years of experience in the shock and vibration control field, the company offers its products to a diverse range of industries, including defense, automotive, industrial, bridges, and steel.
Interestingly, the stock has delivered over 200% returns over five years, which makes it one of the best micro cap stocks. The reason is that TAYD is a debt-free and low-competition stock. With returns on its assets higher than 91% of its sector and EBITDA margins above 83% of the sector, TAYD can be considered unmatched. Tim Sopko, Chief Executive Officer of Taylor Devices, Inc. (NASDAQ:TAYD) made the following comment about the company’s performance:
“As we enter the 2nd half of our FY25, we will continue to aggressively target opportunities where our custom-engineered products are critically needed and valued by our customers in all three of our chosen markets; Aerospace/Defense, Structural, and Industrial, which we expect will continue to support our profitable growth going forward.”
While the gross margin stands at 47%, the profit margin is reported to be approximately 20%. Taylor Devices, Inc. (NASDAQ:TAYD) is currently in a robust financial state with the potential to withstand demand slumps, and the debt-free characteristic of TAYD further underscores its strong footing in this very capital-intensive nature of the industry.
4. M-tron Industries, Inc. (NYSE:MPTI)
Market Capitalization: $115.968 million
M-tron Industries, Inc. (NYSE:MPTI) is a key supplier of highly engineered electronic components, specializing in the designing and manufacturing of advanced frequency and spectrum control products, including power amplifiers and filters. The company mainly serves a mix of industries like defense, aerospace, avionics, and space.
Investors are expected to keep a close eye on the earnings performance of the company in its upcoming release, scheduled next month. Analysts expect M-tron to post an EPS of $0.50, a growth of over 1500% in contrast to the same quarter last year.
Just recently, M-tron Industries, Inc. (NYSE:MPTI) was making headlines when a leading U.S. Department of Defense prime contractor awarded over $10 million contract to the company. This is a major development as the naval defense program, under this contract, is a part of the shipboard defense system of the U.S. and other ally nations. Likely to be in production past 2029, the work under this contract will happen in Orlando, Florida over the span of 3 years.
The agreement underscores M-tron Industries, Inc. (NYSE:MPTI)’s expertise in precision radio frequency (“RF”) components and solutions based on performance under challenging environments.
If we look at the trailing-12-month EBIT and net income margins of the company, recent data shows that M-tron Industries, Inc. (NYSE:MPTI) is 248.7% and 209% higher than their respective industry average. Similarly, the 25.33% trailing 12-month ROCE is also well above the industry average of 4.32%. This makes MPTI one of the best micro-cap stocks to invest in.
3. Airship AI Holdings, Inc. (NASDAQ:AISP)
Market Capitalization: $137.829 million
Airship AI Holdings, Inc. (NASDAQ:AISP) is a Redmond, Washington-based technology company. Aimed at improving public safety and operational efficiency, the company is an AI-driven surveillance platform that provides predictive analysis of adverse events to enable sound decision-making. The core offerings of the company include Outpost AI, Airship Command, and Acropolis. From military to commercial organizations, Airship AI serves a diversified clientele.
The management announced recently that it has been awarded an additional one-year system maintenance and sustainment contract for a current Fortune 100 customer capitalizing on the company’s Acropolis Enterprise Video and Data Management platform. This management system allows users to manage devices and sensors, underscoring operational and physical security conditions. Given the client’s status, higher margins and more secured revenue streams can be predicted.
According to the President of Airship AI Holdings, Inc. (NASDAQ:AISP), Paul Allen,
“Our follow-on expansion contract with this flagship customer is a testament to the Acropolis ecosystem’s ability to enhance physical security at the scale needed for the large-scale operations of the world’s largest corporations”.
Similarly, with Trump’s return to office, we can expect the surveillance sector to grow. Till now, there has been little or rather no implementation of the strict border measures and deportations promised by Trump. Considering this, there will be some contracts surrounding new surveillance monitors and software. And with the current role of social media in magnifying every negative story, we can expect more room for growth.
Analysts expect the revenue of Airship AI Holdings, Inc. (NASDAQ:AISP) to be nearly 32% per year, and maintain a Strong Buy rating on the stock. With a return on assets (ROA) of around 296.7% and EPS of 1.09, we have a strong reason to be bullish on one of the best micro-cap stocks.
2. Lifecore Biomedical, Inc. (NASDAQ:LFCR)
Market Capitalization: $216.783 million
Lifecore Biomedical, Inc. (NASDAQ:LFCR) is a U.S.-based integrated contract development and manufacturing organization. The company specializes in the manufacturing of injectable grade sodium hyaluronate (HA), and syringes and vials for injectable products used in medical procedures, along with various services like technology development, formulation development, and stability studies. As a partner for global biopharmaceutical and biotechnology companies, Lifecore has served over 40 years in bringing innovations to the market. LFCR is one of the best micro-cap stocks.
Lifecore Biomedical, Inc. (NASDAQ:LFCR)’s participation in investor and industry conferences isn’t something that is hidden. There has been a considerable rise in the management’s references to a clear potential to capture fresh deals for not only existing drugs but also collaborations with a multinational company. One such potential is Alcon Inc., LFCR’s largest client, which seems to be past its destocking phase, ready to kick in 2027.
Just recently, the biopharma innovator announced its agreement with a non-competitive buyer for the company’s multi-purpose 10-head isolator filler. With an initial receipt of $7 million at closing, Lifecore Biomedical, Inc. (NASDAQ:LFCR) expects to receive the remaining $10 million in three tranches. The purchase and installation of a new high-speed, multi-purpose 5-head isolator filler is a step forward to double the available capacity.
According to the analysts at Fintel, while the average one-year price target for Lifecore Biomedical, Inc. (NASDAQ:LFCR) is $8, the stock price could surge to $10.50. Moreover, the EBITDA margins are expected to rise from 15% to 25%+. For investors seeking to capitalize on stocks within the rapidly growing health sector, LFCR is a decent choice.
1. Acelyrin, Inc. (NASDAQ:SLRN)
Market Capitalization: $251.818 million
Acelyrin, Inc. (NASDAQ:SLRN) is a biopharma company focused on the development and commercialization of life-changing drug therapies. This California-based company, incorporated in July 2020, offers izokibep, which is currently in Phase III clinical trials for the treatment of Hidradenitis Suppurativa, Psoriatic Arthritis, and uveitis and in Phase II for the treatment of Axial Spondyloarthritis.
In recent news, Acelyrin, Inc. (NASDAQ:SLRN) announced a definitive merger agreement with California-based Alumis Inc., forming a late-stage clinical biopharmaceutical company. Eric Schmidt, an analyst at Cantor Fitzgerald, regarded the deal as “capital recycling at its best.” The proposed unit will specialize in innovating, developing, and commercializing new therapies for people living with immune-mediated diseases.
The transaction, scheduled to finalize in the second quarter of 2025, will allow both companies to leverage a distinguished late-stage therapies portfolio. Together, the combined business can capitalize on its record of successful R&D, coupled with proprietary data and analytics platforms. The pro forma cash position of approximately $737 million is adequate to meet the operating expenses and capital expenditure requirements into 2027.
Although the financials of the company reflect the lack of revenue, Acelyrin, Inc. (NASDAQ:SLRN) retains a strong cash position, with current assets surpassing liabilities, underscoring financial stability and current clinical advancements. While the revenue growth rate is expected to be around 77%, the earnings growth rate and EPS are anticipated to be around 23.8% and 28.8%, respectively. Keeping this in mind, the stock has an upside potential of 347%, as reported by analysts. SLRN is among the best micro-cap stocks to buy now.
Overall, Acelyrin, Inc. (NASDAQ:SLRN) ranks first on our list of the best micro-cap stocks to buy now. While we acknowledge the potential for SLRN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SLRN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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