15 Small-Cap Stocks Poised to Outperform in 2025

2. Red Cat Holdings Inc. (NASDAQ:RCAT)

Red Cat Holdings, a drone technology company integrating robotic hardware and software for military, government, and commercial operations, saw its shares soar by more than 1,630.49 percent to finish at $14.19 apiece.

Analysts attributed the surge in investor confidence to a strategic partnership with Palantir, as well as a wave of mysterious drone sightings in New Jersey and other Northeastern states. Wall Street expected that these events could lead to increased funding for the industry.

The partnership announcement came amid growing interest in the sector, spurred by recent drone sightings across the Northeast that have also raised national security concerns.

However, FBI officials clarified on Thursday that there was no evidence to suggest the drones pose a threat to national security and public safety. They further stated on Saturday that many of the sightings were likely misidentifications of manned aircraft as drones.