In this article, we will take a look at the 10 Best Small-Cap Stocks to Buy Now.
The S&P 500 index has reached its all-time highs, achieving returns of over 20% for two second consecutive years post-COVID. With the index hitting all-time highs, small-cap stocks can be a good option to explore with higher growth potential in the long term.
However, the Russell 2000 small-cap index returned a little over 7% in 2024 compared to the 23% returns by S&P 500. Over the past five years (through February 25, 2025), the S&P 500 has almost doubled the return of the Russell 2000 small cap, with returns of 102% against 47%, respectively.
Small-Cap Stocks Prospects in 2025
On December 30, MJP Wealth Advisors chief investment officer Brian Vendig appeared on Yahoo! Finance’s Catalysts to address the potential outlook of small-cap stocks in 2025. Vendig said that a stable economy and policy will positively impact the small-caps, creating business expansion and merger opportunities. However, the Trump administration’s harsh tariff policies could impact the broader small-cap stocks as these companies contribute significantly to the U.S. domestic market.
The role of the Fed will also be key in keeping the economy afloat. Vendig said that the market is expected to be choppy in the first few months of 2025. Businesses will start to progress in the second half of 2025 as the policies become clearer. However, Vendig believed that if earnings remain intact, he will likely stay constructive on stocks. He is also bullish on bonds, which might be a good opportunity as well. He said:
“I’m definitely not one to recommend adding to mega-cap tech at this point, but I think taking a look at some of those value-oriented sectors that help to play into innovation and growth for the economy still makes sense.”
With that said, let’s take a look at the 10 Best Small-Cap Stocks to Buy Now.
A closeup of investor hands holding a small-cap investment security.
Our Methodology
We used the Finviz stock screener to compile a list of 30 small-cap stocks. We then selected the top 10 best small-cap stocks based on hedge fund sentiment as of Q4 2024. We have used analyst upside, as of February 27, as a secondary metric to rank the stocks with the same number of hedge fund holders. The list is sorted in ascending order of number of hedge fund holders.
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 Best Small-Cap Stocks to Buy Now
10. Gibraltar Industries, Inc. (NASDAQ:ROCK)
Analyst Upside: 36.32%
No. of Hedge Fund Holders: 28
Gibraltar Industries, Inc. (NASDAQ:ROCK) is a leading manufacturer and provider of products and services for the renewable energy, residential, agtech, and infrastructure markets. The company’s products from its different segments include roof and foundation ventilation systems, extraction systems, rain dispersion systems, postal and parcel storage systems, greenhouse structures, and solar racking systems.
Gibraltar Industries, Inc. (NASDAQ:ROCK) has impressed with its Q4 2024 earnings outcomes, beating the analyst estimates. The company’s EPS came in at $1.01 per share, surpassing expectations of $0.91, while revenue was reported at $302.1 million, just shy of the $307.92 million projection. Gibraltar’s quarterly and yearly revenue underperformed compared to FY2023 as the renewables segment suffered a 19.6% loss due to regulatory-driven project delays, and residential sales plunged 4.8% amid market softness. However, the company was still able to improve its Q4 earnings by 17.4% year-over-year, indicating strong profitability.
Gibraltar Industries reported a significant increase in its order activity in 2025 so far, with renewables bookings up 33% and AgTech bookings up more than 300% compared to the previous year. Another catalyst expected to drive the company’s sales this year is the acquisition of Lane Supply, which is expected to add $112 million in net sales and improve Gibraltar’s AgTech structures business. The company has a strong balance sheet with $270 million in cash and zero debt.
In FY2025, the company expects its net sales to be between $1.4 billion and $1.45 billion, reflecting a year-over-year growth of 8% to 12%. The adjusted earnings are expected to be between $4.80 and $5.05 per share, with a growth rate of 13% to 19%.
9. Apogee Therapeutics, Inc. (NASDAQ:APGE)
Analyst Upside: 164.49%
No. of Hedge Fund Holders: 31
Apogee Therapeutics, Inc. (NASDAQ:APGE) is a clinical-stage biotechnology company engaged in treating immunological and inflammatory diseases. The company has a wide portfolio and it has the potential to treat various dermatological, respiratory, and gastroenterological conditions. Apogee is making developments in the trials for key drugs, participating in crucial conferences, and revealing important updates from trials.
On February 3, the company reported that the first patient was dosed in the Part B portion of Phase 2 of its clinical trial of APG777 in patients with moderate-to-severe AD. The company has also completed the enrollment of the same phase in the Part A portion of the trial. The Chief Medical Officer of Apogee, Carl Dambkowski, addressed the accelerated development of its APG777 trails and said:
“Enrollment for the Phase 2 Part A trial of APG777 surpassed the approximately 110 patient target ahead of schedule, driven by strong patient and investigator enthusiasm, underscoring the potential of APG777 to address the need for safe, effective treatment options that reduce injection burden and provide better disease control for patients with AD and other I&I conditions.”
During Q3 2024, Apogee Therapeutics, Inc. (NASDAQ:APGE) management mentioned that they are on track to release Phase 2 Part A data for APG777 in the second half of 2025. The company is also progressing on its APG333 trials, which have the potential to offer top-notch efficacy across several respiratory conditions, representing a solid feat for Apogee’s growth potential. By the end of Q3, the company had around $754 million in cash and cash equivalents, addressing its ability to operate smoothly into 2028. APGE is one of the emerging players in the biotech industry and the company plans to continue building its portfolio with transformative therapies.
