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.
8. Argan, Inc. (NYSE:AGX)
Analyst Upside: 17.11%
No. of Hedge Fund Holders: 33
Argan, Inc. (NYSE:AGX) is a holding company with diversified businesses including construction, power industry services, and telecommunications. The company operates in these various segments through its subsidiaries in each segment. After returning over 170% in 2024, AGX shares are down by almost 7% so far in 2025. Argan is primarily a construction company that does a lot of work in the power industry. The company made remarkable progress last year in the power segment.
Argan’s third quarter 2024 results were one of the best in its history. The company posted a revenue of $257 million in Q3, up by 47% from a year ago. The power services segment was the most dominant segment of the company, with a revenue surge of 75% year-over-year to $212 million, indicating strong performance in both renewable and natural gas projects.
Argan, Inc. (NYSE:AGX) has around $800 million in backlog and continues to increase its revenue. Argan’s subsidiary, Gemma Power Systems, has also obtained the green signal for a 700 MW combined-cycle natural gas-fired power plant in the U.S. The company has a solid balance sheet with approximately $506 million in cash and investments, net liquidity of $281 million, and zero debt. In addition to that, the board has increased AGX’s quarterly dividend by 25%, reflecting confidence in the business and future growth prospects. This shows why investors have been interested in AGX lately.
7. Agios Pharmaceuticals, Inc. (NASDAQ:AGIO)
Analyst Upside: 54.79%
No. of Hedge Fund Holders: 33
Agios Pharmaceuticals, Inc. (NASDAQ:AGIO) is a biopharmaceutical company that is engaged in the study and development of treatments related to cellular metabolism and blood-related diseases, with several therapies still in early-stage development.
On February 15, Scotiabank analyst Greg Harrison slightly lowered the price target on AGIO shares from $75 to $74 while keeping an Outperform rating on the shares. Harrison is optimistic about the company’s regulatory and clinical execution in Q4 2024. During the quarter, the company delivered remarkable results with a net Pyrukynd revenue of $10.7 million, up by nearly 51% from a year ago. Scotiabank is optimistic about the company’s progress and believes Agios is well-equipped to accelerate the growth of the Pyrukynd franchise. In addition to that, the analyst remains cautiously optimistic about Mitapivat’s point of sickening. The company has posted positive top-line results from the Phase 3 trial of Mitapivat for pediatric patients with PK deficiency.
Agios Pharmaceuticals, Inc. (NASDAQ:AGIO) is preparing for two additional commercial launches. Pyrukynd’s potential approval and launch in thalassemia are expected in September 2025 and in sickle cell disease in 2026. The company completed the enrollment in the phase 3 rise-up study for sickle cell disease. Agios has a strong balance sheet with nearly $1.5 billion in cash and cash equivalents.
6. AvidXchange Holdings, Inc. (NASDAQ:AVDX)
Analyst Upside: 20.42%
No. of Hedge Fund Holders: 34
AvidXchange Holdings, Inc. (NASDAQ:AVDX) is a provider of accounts payable automation software and payment solutions for middle-market businesses and their suppliers. The company offers a cloud-based, software and payment platform that digitizes and automates the accounts payable workflow for its clients, and their service providers and vendors. The company serves a wide range of industries in North America including real estate, homeowner’s associations, construction, financial services, healthcare facilities, social services, education, and media. AvidXchange has executed payments to over 1.2 million supplier customers of its buyers.
In Q3 2024, the company posted a strong performance and analysts anticipate a similar result in Q4. The company’s revenue surged by 14.3% year-over-year to $112.8 million in Q3, driven by the company’s payment, software, and services segments. AvidXchange Holdings, Inc.’s (NASDAQ:AVDX) operating expense management and the ability to leverage unit cost efficiencies added to the notable expansion in gross and operating margins. Moreover, AVDX executed $25.1 million of its $100 million share repurchase program, representing its strong financial health.
5. Pitney Bowes Inc. (NYSE:PBI)
Analyst Upside: 55%
No. of Hedge Fund Holders: 34
Pitney Bowes Inc. (NYSE:PBI) is a shipping and mailing company that offers logistics, technology, and financial services to SMBs, retailers, large enterprises, and government clients. The company operates through three segments including Presort Services, Global Ecommerce, and SendTech Solutions.
In 2024, Pitney Bowes Inc. (NYSE:PBI) made strategic changes, including slashing costs and excess overhead, deleveraging its balance sheet, freeing up trapped cash, and more. This helped the company achieve revenue in line with its expectations at around $2.03 billion. The adjusted EPS was $0.82, a 34% year-over-year growth.
In 2025 so far, PBI shares have surged by nearly 50% as the company announced the sale of its underperforming Global E-commerce segment to Hilco Global in late 2024. This eliminated annual losses of $136 million in 2024 and will allow the company to focus more on higher-margin Presort and SendTech businesses moving forward.
The company expects to deliver strong results in 2025, with adjusted EPS in the range of $1.10 to $1.30 per share. The company’s adjusted EBIT forecast is between $450 and $480 million, indicating a 20% year-over-year growth.
4. Marqeta, Inc. (NASDAQ:MQ)
Analyst Upside: 36.61%
No. of Hedge Fund Holders: 37
Marqeta, Inc. (NASDAQ:MQ) is a leading global modern card issuing platform. The company offers virtual, physical, and tokenized credit and debit cards. It operates two business segments, Managed By Marqeta and Powered By Marqeta. Marqeta’s major clients include platforms such as Square, DoorDash, and Instacart. The company also offers Buy Now Pay Later (BNPL), neobanking, on-demand delivery, expense management, and crypto payment solutions.
Marqeta, Inc. (NASDAQ:MQ) has been facing increased regulatory scrutiny that has delayed program launches and impacted growth projections by 30% to 40%, with an average postponement of 70 days, affecting Q4 2024 and 2025 projections. To manage these short-term challenges, the company is focused on cost optimization and efficiency improvements. The company expects its adjusted EBITDA margin of 5% to 7% for Q4 2024 and approximately $50 million in 2025.
Despite the regulatory pressures, the company has done remarkably well, which indicates its strong growth potential. The company’s total processing volume (TPV) reached $74 billion in Q3 2024, a 30% year-over-year increase. The company posted a net revenue of $128 million in Q3, with a gross profit of $90 million, up by 25% from a year ago. For Q4 2024, the company projects its net revenue to grow between 10% to 12% and its gross profit margin between 13% to 15%.
3. Sunrun Inc. (NASDAQ:RUN)
Analyst Upside: 99.06%
No. of Hedge Fund Holders: 38
Sunrun Inc. (NASDAQ:RUN) is one of the leading residential solar energy providers in the United States that offers solar panels, battery storage, and energy management services. The company is limiting its reliance on fossil fuels by providing homeowners with affordable and sustainable solar energy solutions. The company’s major customer base is residential homeowners seeking renewable energy options and grid independence.
On January 28, Jefferies analyst Julian Dumoulin-Smith downgraded the price target on RUN shares from $19 to $17, keeping a Buy rating on the stock. The analyst expects Sunrun to post a strong outcome in Q4 2024, with effective execution anticipated on cash generation targets. Sunrun seems to be on track to meet its 2025 cash flow objectives despite the recent softness in the residential solar market and growing uncertainties.
Despite the short-term challenges, Sunrun Inc. (NASDAQ:RUN) has nearly doubled its market share in California. The company has made notable developments with attaching battery storage to about 60% of its new projects. The execution of storage solutions has jumped by 126%, expanding Sunrun’s addressable market. The company expects to generate $50 to $125 million in cash in Q4 2024, and $350 to $600 million in 2025. As the company continues to focus on its profitability, it expects to install 320 to 350 megawatt-hours of storage and 240 to 250 megawatts of solar capacity moving forward.
2. Silicon Motion Technology Corporation (NASDAQ:SIMO)
Analyst Upside: 22.06%
No. of Hedge Fund Holders: 39
Silicon Motion Technology Corporation (NASDAQ:SIMO) manufactures NAND flash controllers for SSDs and other solid-state storage devices that are used in data centers.
The company had a notable 2024, with revenue soaring by 25% year over year. SIMO’s gross margin also soared to more than 46% from 43%, and its operating margin jumped 11.9% from a year ago. Silicon Motion Technology Corporation (NASDAQ:SIMO) is investing in next-generation solutions to expand its opportunities for long-term share gains and sustainable revenue growth.
SIMO has entered the enterprise market, adding six customers and beginning initial shipments of a new product. The company has also launched a high-end 6-nanometer 8-channel PCIe 5 SSD controller, securing a dominant market position. On top of that, the company’s position in the automotive segment has also improved, with its automotive business sales up by 5% year-over-year, with a strong backlog entering 2025.
1. BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX)
Analyst Upside: 41.51%
No. of Hedge Fund Holders: 39
BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) is a biotechnology company developing novel small-molecule drugs that target key enzymes involved in infectious and inflammatory diseases.
2024 was a year of development with strong financial progress for BioCryst Pharmaceuticals. For the full-year 2024, the company posted revenues of $450.7 million, a 36% year-over-year growth. The company’s GAAP operating loss was around $2.5 million in 2024, a notable improvement from a loss of $103.7 million in 2023. BioCryst’s revenue growth was primarily driven by ORLADEYO, the company’s lead product, which generated around $124.2 million in net revenue, reflecting a 36.6% increase from a year ago. On February 12, the company reported that Infarmed in Portugal has recommended ORLADEYO for the routine prevention of recurrent attacks of hereditary angioedema (HAE) in eligible patients. This development is set to add to ORLADEYO sales in 2025.
Based on strong performance in 2024, the company has raised its 2025 revenue guidance to $560 to $575 million. ORLADEYO’s revenue is expected to reach $535 to $550 million in 2025. BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) is aiming to achieve a 20% revenue CAGR over the next three years and targets $750 million in global revenue by 2027.
While we acknowledge the potential of BCRX to grow, our conviction lies in the belief that 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 BCRX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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