We recently compiled a list of the 12 Stocks Under $10 With High Upside Potential. In this article, we are going to take a look at where Alight, Inc. (NYSE:ALIT) stands against the other stocks under $10 with high upside potential.
Small-cap stocks in the U.S. have suffered as the broader market is under pressure due to the ongoing tariff policy transition. The Russell 2000 small cap index fell over 15% from its November 2024 highs as of March 7. It has dropped by almost 9% year-to-date. In comparison, the S&P 500 index, which tracks large-cap stocks, has plunged over 3.50% so far in 2025.
However, things could change for small-cap stocks. President Trump’s focus on domestic economic growth could make them more attractive. The prospect of higher interest rates remains a major hurdle, as rising borrowing costs tend to impact smaller companies more than larger ones. Keith Lerner, co-chief investment officer at Truist Advisory Services, addressed this situation as a “tug of war”—where strong economic growth could benefit small caps, but higher rates pose a challenge to them.
Experts’ Take on Small-Cap Prospects in 2025
Experts have a mixed view of small caps. Some see potential growth opportunities due to better economic activity in the domestic market, while others have doubts due to fewer interest rate cuts expected in 2025. Those bullish on small-cap stocks expect reduced regulations and support for domestic industries from Trump’s policies.
Sameer Samana, senior global market strategist at Wells Fargo Investment Institute, noted that small companies are more US-focused than multinational corporations. However, a tariff increase can create disruption in supply chains, which may hurt smaller businesses too.
MJP Wealth Advisors chief investment officer Brian Vendig appeared on Yahoo! Finance’s Catalysts and addressed the potential outlook of small-cap stocks in 2025. Vendig sees a stable economy and policy that will positively impact the small-caps, creating business expansion and merger opportunities. He added that the market will remain choppy in the first few months of 2025, but things will improve as the policies become clearer.
According to RBC Wealth Management, small caps finally seem ready for a comeback after years of trailing behind large-cap stocks.
Our Methodology
We used the Finviz stock screener to compile a list of stocks under $10 with an upside of over 50%. Once we had an aggregated list, we ranked these stocks based on the analyst upside potential sourced from CNN. Please note that the share price is accurate as of March 7. We also mentioned hedge fund sentiment around each stock, as of Q4 2024. Finally, the 12 best stocks under $10 with high upside are ranked in ascending order of the upside potential.
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).
A person viewing their financial progress on a computer, highlighting the financial health offerings of the company.
Alight, Inc. (NYSE:ALIT)
Share Price: $6.31
No. of Hedge Fund Holders: 42
Analyst Upside Potential: 74.33%
Alight, Inc. (NYSE:ALIT) is a cloud-based human capital technology and services provider. Its Employer Solutions segment offers employee well-being, benefits administration, and payroll services leveraging AI. Alight’s Professional Services segment provides cloud advisory and optimization, while its Worklife platform focuses on improving employee engagement and driving organizational performance.
On February 21, Needham analyst Kyle Peterson reiterated a Buy rating on Alight, Inc. (NYSE:ALIT) shares, with a price target of $9 per share. Peterson highlighted that Alight is returning to its core competencies, emphasizing customer service and relationships. The company’s divestiture of its payroll and professional services has enhanced its fundamentals, strengthening its balance sheet.
Alight, Inc. (NYSE:ALIT) posted solid results during Q4 2024, with quarterly revenue of $680 million. The company’s recurring revenue comprised 91% of the total revenue, driven by a significant increase in ARR bookings and robust cash flow. For the full year, the company achieved an 18% increase in ARR bookings, reflecting strong demand for its solutions. The company completed its cloud migration, which has improved operational stability and efficiency. Alight has also announced a $200 million increase to its share repurchase authorization, indicating confidence in its financial health.
Overall ALIT ranks 11th on our list of the stocks under $10 with high upside potential. While we acknowledge the potential of ALIT as an investment, 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 ALIT 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 30 Best Stocks To Invest In According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
