On February 14, Stacey Sears, portfolio manager at Emerald Advisors, joined ‘Squawk Box’ on CNBC to share her insights on the market’s performance in early February. She thinks that small-cap earnings data is encouraging. Despite various news events, which include inflation data and tariff announcements, she thinks that the market has handled the developments well. Michael Hartnett of Bank of America suggests that the recent hot CPI could be a blessing in disguise as it might lead President Trump to adopt more cautious policies regarding tariffs and immigration. But Sears emphasized that her team is not overly concerned about inflation levels at present. They believe that while there has been an uptick in some inflation indicators like PPI elements, these don’t significantly impact Personal Consumption Expenditures (PCE), which is a focus for Fed Chair Jerome Powell.
In terms of positioning within this environment, Sears discussed how small-cap stocks are showing encouraging signs after being in an earnings recession for much of the past two years. The fourth quarter marked a turn with positive year-over-year earnings growth exceeding expectations, tracking at high single digits instead of the anticipated 2% growth. This outperformance spans multiple sectors including financials, healthcare, and technology. She was questioned about small caps being less appealing during periods of high inflation and interest rates due to their volatility compared to larger cap stocks like those in mega-cap indices reaching peak concentration levels. Sears pointed out that small caps are currently undervalued relative to their historical norms within equity markets. She believes structural changes are unlikely and anticipates recovery as domestic economic strength continues with GDP tracking positively according to Atlanta Fed data. Moreover, borrowing costs have decreased recently by about 100 basis points based on secure overnight financing rates (SOFR), which should alleviate some headwinds affecting earnings growth for small caps.
Given these factors combined with favorable valuations today, Sears sees opportunities emerging within small caps. That is why we’re here with a list of the 12 best-performing small-cap stocks so far in 2025.
Phone with stocks chart
Methodology
We used the Finviz stock screener to compile a list of the best-performing stocks that were trading between $300 million and $2 billion. We then picked the top 12 stocks with the highest year-to-date gains, as of February 17. The stocks are ranked in ascending order of their year-to-date performance. We have also added the hedge fund sentiment for each stock which was sourced from Insider Monkey’s database.
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).
12 Best Performing Small Cap Stocks So Far in 2025
12. Centrus Energy Corp. (NYSEAMERICAN:LEU)
Number of Hedge Fund Holders: 11
Year-to-Date Performance as of February 17: 71.13%
Centrus Energy Corp. (NYSEAMERICAN:LEU) provides nuclear fuel components to power plants in the US and internationally. Operating through its Low-Enriched Uranium (LEU) and Technical Solutions segments, it supplies enriched uranium products and related services to utilities and other customers.
Its LEU segment is its revenue powerhouse, generating $349.9 million in 2024, which was a jump from the previous year. It secured a massive $2.8 billion LEU backlog in this period, which showed strong customer demand. This is further supported by its overall backlog of $3.8 billion. The company’s focus on expanding LEU production in Piketon, Ohio will drive future growth. It has also secured government contracts that are aimed at reducing US reliance on foreign uranium, which is backed by billions in congressional funding.
This company possesses the only US-made centrifuge technology and a critical NRC (Nuclear Regulatory Commission) license. This is important given the rise of AI. The massive energy consumption that AI requires pushes the US to secure its energy grid and become less dependent on foreign energy sources. The recent Stargate announcement highlights the need for more energy production to power future AI models. This announcement refers to a massive AI infrastructure build. To capitalize on this opportunity, Centrus Energy Corp. (NYSEAMERICAN:LEU) is investing heavily in manufacturing and supply chain resilience.
The company is also the first in the US to produce High-Assay Low-Enriched Uranium (HALEU). With limited nuclear sites and the rising demand from tech companies, and also from the US government, the nuclear energy sector is expected to see an increase in value.
11. Oppfi Inc. (NYSE:OPFI)
Number of Hedge Fund Holders: 15
Year-to-Date Performance as of February 17: 71.15%
Oppfi Inc. (NYSE:OPFI) is a tech-enabled lending platform that partners with community banks to expand credit access to underserved Americans. It focuses on responsible lending and financial inclusion to help customers build financial health.
Its lending business helped it make a record revenue of $136.6 million in Q3 2024. This was due to higher loan yields and a focus on lending to existing, lower-risk customers. This improved credit performance, which then resulted in lower charge-off rates and increased profitability. The company also slashed expenses through automation and disciplined spending, which boosted profit margins. This led to a net income of $28.8 million compared to $13.3 million for the same period last year. It’s focusing on refining its loan products and integrating AI. Its digital platform, advanced analytics, bank partner model, and multi-channel marketing solidify its competitive edge.
The company’s performance is supported by positive earnings surprises and upward revisions in earnings estimates. It now anticipates earnings per share of $0.85 to $0.87 compared to the previous range of $0.73 to $0.75, for the full year 2024. Oppfi Inc. (NYSE:OPFI) has consistently beaten earnings expectations, and analysts are projecting continued growth. In Q3 alone, its earnings were $0.33 per share compared to $0.16 in Q3 2023. This momentum shows that the stock’s surge will likely continue.
10. Cerence Inc. (NASDAQ:CRNC)
Number of Hedge Fund Holders: 10
Year-to-Date Performance as of February 17: 75.03%
Cerence Inc. (NASDAQ:CRNC) provides AI-powered virtual assistants for the transportation market globally. It offers both edge and cloud-connected software, along with professional services. It specializes in conversational AI solutions like speech recognition and natural language understanding.
The company’s automotive AI segment helped it make a revenue of $50.9 million in FQ1 2025. While this was down 63% from the previous year, it surpassed the high end of its guidance which drove the stock’s surge. It’s securing new design wins and customer programs, which shows market demand for its AI solutions. It achieved six design wins for core products and two GenAI contracts with major automakers, maintaining a strong market presence with a 51% share of worldwide auto production. The launch of CaLLM Edge, which is the first LLM for offline automotive use, also highlights its innovation.
It’s prioritizing cost-efficiency through restructuring and operational improvements. Significant reductions in operating expenses, which amount to $29 million year-over-year through layoffs and office consolidations, resulted in improved gross margins of 65%. This contributed to investor confidence. Cerence Inc. (NASDAQ:CRNC) is confident in its ability to meet its financial goals. This includes maintaining its full-year guidance of $236–247 million in revenue and projecting $20 million of fixed contracts.
9. Root Inc. (NASDAQ:ROOT)
Number of Hedge Fund Holders: 16
Year-to-Date Performance as of February 17: 78.18%
Root Inc. (NASDAQ:ROOT) offers auto, home, and renters insurance in the US. It operates through a direct-to-consumer model, primarily via mobile app and website. It also utilizes digital, media, referral, and agency distribution channels.
The company achieved profitability in Q3 2024, which was driven by strong underwriting and efficient expense management. It reported $23 million in net income. Its data-driven approach led to an industry-leading 57% gross loss ratio, which allowed it to consider rate reductions in certain markets. The company’s partnerships channel also doubled year-over-year. These factors together fueled a surge in its stock price.
In mid-February, its stock reached a new 52-week high, outperforming the finance sector and insurance industry. Root Inc. (NASDAQ:ROOT) is now focused on continued growth through geographic expansion and reinvestment of profits into marketing and new partnerships. It’s seeing positive trends in customer retention and plans to maintain its disciplined approach to underwriting and innovation.
8. Claritev Corporation (NYSE:MPLN)
Number of Hedge Fund Holders: 11
Year-to-Date Performance as of February 17: 86.81%
Multiplan Corp. (NYSE:MPLN) provides data analytics and technology-enabled cost management solutions to the US healthcare industry. Serving insurers, health plans, and other clients, it offers services ranging from claims cost reduction and network management to payment integrity and data-driven analytics for optimized care.
The company experienced a slight revenue dip in Q3 2024. It made $230.5 million, which represented a 5.1% year-over-year decline, but delivered a record $6.4 billion in identified potential client savings. It’s also actively developing new data-driven products like BenInsights, which is an analytics tool that helps employers and their advisors optimize healthcare benefit plans. This is done by providing insights into data, predicting risks, and suggesting actions to improve plan design and reduce costs.
Multiplan Corp. (NYSE:MPLN) is now transforming and rebranding as Claritev to reflect its broader focus on affordable and transparent healthcare technology, data, and innovation. Claritev will commence trading on the NYSE on February 28 with the ticker symbol CTEV. One of the rebranded company’s focuses is going to be AI integration, which is also a reason behind the MPLN’s recent increase.
7. Corsair Gaming Inc. (NASDAQ:CRSR)
Number of Hedge Fund Holders: 5
Year-to-Date Performance as of February 17: 87.90%
Corsair Gaming Inc. (NASDAQ:CRSR) designs, develops, and markets gaming and streaming peripherals, components, and systems globally. Its product range includes gaming keyboards, mice, headsets, streaming equipment, PC components, pre-built PCs, and related software. It sells through e-retail, retail, direct-to-consumer, and distributor channels.
Its gaming components business, especially high-end PC parts, is a key revenue driver. The launch of new NVIDIA GPUs is increasing demand, as gamers upgrade their systems with higher-powered components. This directly boosts this company’s sales of power supplies, cooling systems, and memory. Corsair Gaming Inc. (NASDAQ:CRSR) is seeing increased interest in its high-performance parts, and expects growth throughout 2025, particularly in Q2. This is reflected in its upgraded 2025 financial guidance, with revenue projected between $1.4 billion and $1.6 billion.
Q4 2024 earnings also contributed to the positive momentum, beating expectations despite a slight year-over-year revenue dip to $413.6 million. Notably, the Gamer and Creator Peripherals segment grew 24% year-over-year to $169.6 million. The company now expects higher demand for gaming PCs and NVIDIA GPUs, which is expected to benefit Corsair Gaming Inc. (NASDAQ:CRSR) in 2025.
6. Alpha Technology Group Limited (NASDAQ:ATGL)
Number of Hedge Fund Holders: NA
Year-to-Date Performance as of February 17: 87.91%
Alpha Technology Group Limited (NASDAQ:ATGL) provides cloud-based IT services in Hong Kong. It offers CRM and ERP systems, web and mobile application development, AI-powered OCR services, and technical support to clients in various industries. These include property consulting, logistics, and social services.
The company is using its AI-driven cloud IT solutions to drive growth, positioning itself as Hong Kong’s first AI company on NASDAQ. It focuses on AI-related technologies with ERP systems, which emphasizes digital transformation and ESG sustainability. This specialization is the primary factor behind its stock surge. The company’s CEO, Anthony Tsang, has received awards that solidify his reputation as an AI Pioneer. Revenue for the full year ended September 30, 2024, was HKD 12.35 million, up from HKD 8.69 million in the previous year.
Insider ownership at Alpha Technology Group Limited (NASDAQ:ATGL) is also substantial, with 67% of shares held by insiders. This demonstrates a strong vested interest.
5. GH Research (NASDAQ:GHRS)
Number of Hedge Fund Holders: 9
Year-to-Date Performance as of February 17: 104.43%
GH Research (NASDAQ:GHRS) develops therapies for psychiatric and neurological disorders. It focuses on 5-Methoxy-N,N-Dimethyltryptamine (5-MeO-DMT) treatments. Its lead program, GH001 (inhalable mebufotenin), is in Phase 2 clinical trials for treatment-resistant depression, bipolar II disorder, and postpartum depression. It’s also developing GH002 (intravenous) and GH003 (intranasal) mebufotenin candidates.
In the Phase 2b trial (GH001-TRD-201), there was an improvement in patients receiving GH001 compared to those receiving a placebo. Specifically, patients on GH001 showed a 15.5-point reduction in their depression scores within 8 days (a statistically significant result). Furthermore, over half of the patients on GH001 experienced a remission of their depression, while none of the patients on the placebo did. Looking further out, a large percentage of patients who continued the treatment remained in remission six months later. These positive results drove the company’s stock to rise sharply in 2025.
GH001 was well-tolerated, with no serious adverse events in the double-blind phase, and mild-to-moderate treatment-emergent adverse events. The company completed enrollment of the double-blind phase in Q3 2024 and is progressing with the open-label extension. As of September 30, 2024, it had $193.8 million in cash, cash equivalents, other financial assets, and marketable securities.
4. Nutex Health Inc. (NASDAQ:NUTX)
Number of Hedge Fund Holders: 2
Year-to-Date Performance as of February 17: 108.46%
Nutex Health Inc. (NASDAQ:NUTX) is a physician-led healthcare services and operations company. It operates through the Hospital, Population Health Management (PHM), and Real Estate segment. It develops and operates micro-hospitals and specialty hospitals, provides PHM services via a cloud-based platform, and owns/leases related real estate. Its services include emergency care, inpatient and behavioral health, imaging, labs, and pharmacies.
Its core business is its Hospital division, which operates community-focused hospitals. This division saw growth in Q3 2024, with a 26% increase in revenue, reaching $78.8 million. There was also an 11.3% rise in patient visits, which totaled 41,668 visits for the quarter. This is attributed to both new hospital openings and increased activity at existing locations. Specifically, the four new hospitals opened in 2023 ramped up successfully. Mature hospitals, those opened before December 31, 2021, also demonstrated robust growth with a 20.7% revenue increase and a 3.8% increase in patient visits.
The company is expanding its hospital network, with plans to open 2-4 new facilities each year. By the end of Q3 2024, Nutex Health Inc. (NASDAQ:NUTX) opened hospitals in Green Bay, Wisconsin, and Post Falls, Idaho, and was on track to open 2 more facilities later in the year. This expansion drives its growth, with the company already developing its pipeline for 2025-2027 for continued momentum.
3. Grail Inc. (NASDAQ:GRAL)
Number of Hedge Fund Holders: 25
Year-to-Date Performance as of February 17: 208.24%
Grail Inc. (NASDAQ:GRAL) is a biotechnology company that develops early cancer detection technologies. Its products include Galleri, a screening test for asymptomatic individuals, and DAC, a diagnostic aid. It is also developing minimal residual disease and other post-diagnostic tests.
Galleri’s revenue reached $25.4 million in Q3 2024, marking a 52% year-over-year increase, with over 250,000 tests sold since the launch. Clinical studies show promising results, which indicate Galleri’s ability to detect aggressive cancers early. Grail Inc. (NASDAQ:GRAL) is actively pursuing FDA approval for Galleri. It’s conducting large-scale studies with 175,000 participants and aiming for Premarket Approval (PMA) submission in H1 2026, with potential FDA approval in H1 2027. It’s also developing a new, automated version of Galleri to increase efficiency. The total Q3 2024 revenue was $28.7 million, up 38% year-over-year. The company has $853.6 million in cash, ensuring a smooth runway into 2028.
Its stock has surged in 2025 due to several factors. Grail Inc. (NASDAQ:GRAL) preannounced 2024 revenue of $124-126 million, exceeding expectations, and reported 137,000 tests sold, up from 94,000 in 2023. Larry Ellison’s comments on using blood tests for cancer vaccines and a partnership with Quest Diagnostics, which enables access to over 500,000 providers, have also boosted investor confidence.
2. Diginex Ltd. (NASDAQ:DGNX)
Number of Hedge Fund Holders: NA
Year-to-Date Performance as of February 17: 496.67%
Diginex Ltd. (NASDAQ:DGNX) provides environmental, social, and governance (ESG) reporting solutions, advisory services, and custom solutions. Its product suite includes a cloud-based ESG reporting platform, supply chain risk assessment tools, a worker data collection app, a carbon footprint calculator, and advisory/managed services.
Its diginexESG software helps companies manage their environmental and social impact data. It’s a SaaS reporting product designed to assist companies in complying with sustainability disclosure requirements, such as those set by the ISSB and IFRS, which is a growing requirement for many companies. It’s adding new AI features to the software, using OpenAI’s platform, to improve data extraction, compliance, and risk assessment. This is expected to boost its 2025 sales.
The ESG reporting solutions market is projected to reach between $1.5 billion and $4.35 billion by 2027, with a CAGR of 15.9% to 30%. Diginex Ltd. (NASDAQ:DGNX) has also gained recognition from the Hong Kong government, which is supporting its efforts to develop green technology solutions. It recently went public, raising over $9 million through the sale of 2,250,000 ordinary shares at $4.10 per share. The company plans to use this money to further develop its software and expand its business.
1. DouYu International Holdings Ltd. (NASDAQ:DOYU)
Number of Hedge Fund Holders: 5
Year-to-Date Performance as of February 17: 636.65%
DouYu International Holdings Ltd. (NASDAQ:DOYU) operates a live game and entertainment streaming platform in China, which is accessible via PC and mobile apps. Connecting game developers, eSports professionals, advertisers, and viewers, it also sponsors players and teams, organizes tournaments, and streams other entertainment content. The platform offers video replays and graphics, which include game guides and news.
Its growth is fueled by its innovative business segment, which diversifies revenue beyond traditional live streaming. In Q3 2024, this segment saw a 49.4% year-over-year revenue increase, reaching RMB 311 million and contributing nearly 30% to the company’s total revenue. This is due to its voice-based social networking service and the successful game membership program in the innovative segment. It integrates game props with platform incentives, which are tailored to align with streamers’ marketing styles and user preferences. Since its launch in late 2022, this program has generated stable revenue.
The company employs various commercialization strategies, which include seasonal sales-driven approaches, multi-platform marketing, and its established membership program. It times marketing initiatives around game updates and seasonal events, which increase visibility. DouYu International Holdings Ltd. (NASDAQ:DOYU) is navigating macroeconomic challenges through its commitment to a game-centric content ecosystem.
While we acknowledge the growth potential of DouYu International Holdings Ltd. (NASDAQ:DOYU), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than DOYU 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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