The summer of 2025 has produced a split-screen market. At the top, a narrow group of AI-tilted mega-caps continues to pull the S&P 500 toward record territory, with breadth still thin under the surface. The index has logged multiple record closes this year, while the top-10 constituents sit near their highest share of index weight on record, showing how much leadership is concentrated at the summit. Meanwhile, the equal-weight S&P has risen far less, capturing the weaker participation beneath the headline gains.

Under that surface, valuation gaps are largest where investors have paid the least attention. U.S. small caps trade at steep discounts to large caps on forward multiples, ranging from about 25 to 30 percent in recent manager and index work, and as wide as 40 percent in Research Affiliates’ end-2024 calculation, which still places the spread at extreme historical levels. Historically, the cheapest quintile of small-cap stocks has delivered roughly 12.4 percent annualized returns, edging toward 13.9 percent when screened for quality and momentum. Research Affiliates also notes the gap persists even versus equal-weight large-cap indexes, pointing to concentration rather than a universal collapse in small-cap fundamentals.

Healthcare is a second pocket where growth and cheapness intersect. Year-to-date, the S&P 500 healthcare sector is down roughly 5 percent versus a gain of about 7 percent for the broader index. Forward P/E multiples near 16 times put sector valuations around three-decade lows and meaningfully below the S&P 500’s average. Policy overhangs, including renewed U.S. scrutiny of drug pricing and related cost pressures, have weighed on sentiment, yet analysts’ profit forecasts for the group still point to high-single- to low-double-digit growth over the next two years.

Even within technology, outside the headline AI leaders, there are names growing briskly without premium-of-the-moment pricing. Uber’s latest quarter showed revenue up 18 percent year over year, alongside strong cash generation, while the company expands autonomous ride-hailing through partnerships that are now live in Austin and rolling out in Atlanta. Uber’s enterprise-value-to-sales ratio sits near 4 times on trailing figures, which is low by big-tech standards and closer to mature consumer platforms than to high-multiple software peers.

Macro conditions amplify the dispersion. The Fed’s June Summary of Economic Projections pegs 2025 real GDP growth at a 1.4 percent median, with PCE inflation at 3.0 percent and core PCE at 3.1 percent, implying a slow-growth, still-sticky-inflation backdrop.

On top of that, shifting U.S. trade policy and tariff headlines have injected recurring uncertainty into risk premia, with markets repeatedly reacting to tariff announcements, carve-outs and negotiation volleys. In this setup, “cheap growth” isn’t shorthand for low P/E alone; it’s where credible earnings expansion meets valuations suppressed by macro-driven capital concentration.

The evidence is visible in the gaps above: record-era index concentration, unusually wide small-cap discounts with supportive long-run return history, sector-level dislocations like healthcare, and selectively mispriced operators in tech whose growth is grounded in delivered results rather than distant promises.

Methodology

We used stock screeners to pick stocks with a forward P/E ratio of less than 20 and an expected EPS growth rate of more than 20%. We also checked if these stocks have year-over-year EPS growth rate of at least 20%, to make sure each stock has a valid track record for delivering earnings growth. Additionally, we made sure these stocks have an upside potential of at least 25%, as of August 7. We have also mentioned the hedge fund sentiment around each stock as of Q1 2025.

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. Barrick Mining Corporation (NYSE:B)

Forward P/E Ratio: 11.61

EPS Growth YoY: 61%

Forward EPS Growth: 44%

Price Target Upside: 26%

Barrick Mining Corporation (NYSE:B) is one of the best cheap growth stocks to buy according to analysts. On July 23, 2025, reports emerged that China’s Zijin Mining is in advanced talks to acquire Barrick’s Tongon gold mine in Ivory Coast for up to $500 million. The deal, still subject to regulatory approval, comes as Barrick continues to streamline its portfolio by shedding lower-margin, shorter-life assets. Tongon, which began production in 2010, has seen its reserves decline in recent years and is projected to cease operations by 2027 without major reinvestment. Selling the mine would free up capital for Barrick to pursue higher-return opportunities, particularly in copper and long-life gold projects.

The potential sale reflects Barrick’s broader strategy of focusing on assets with strong margins and long production horizons. Management has signaled increased emphasis on copper, which now accounts for roughly one-fifth of the company’s output, with a target of raising that share to 30 percent by 2029. Divesting from smaller, aging mines like Tongon aligns with this shift, enabling Barrick to redeploy resources toward growth-oriented ventures in regions such as Latin America, North America, and Central Asia.

Barrick Mining Corporation (NYSE:B) is a global leader in gold and copper production, with operations spanning North and South America, Africa, the Middle East, and Asia. Founded in 1983, the company is headquartered in Toronto, Canada.

9. Targa Resources Corp. (NYSE:TRGP)

Forward P/E Ratio: 19.23

EPS Growth YoY: 54%

Forward EPS Growth: 37%

Price Target Upside: 25.67%

Targa Resources Corp. (NYSE: TRGP) is one of the best cheap growth stocks to buy according to analysts. On August 8, 2025, Wells Fargo analyst Michael Blum reiterated an Overweight rating on Targa Resources and raised the firm’s price target from $198 to $205. The rating was maintained following the company’s second-quarter performance, which Wells Fargo considered to be in line with expectations.

The updated price target reflected continued confidence in Targa’s 2025 guidance as well as anticipated volume growth in the Permian Basin. While these forward-looking assessments were not directly quoted from the analyst, they align with broader interpretations of the firm’s outlook. The reaffirmation suggests that Targa remains well positioned within the midstream space despite sector-wide volatility.

Targa Resources Corp. (NYSE: TRGP), headquartered in Houston, Texas, is a leading provider of midstream natural gas and natural gas liquids services. The company operates a vast network of pipelines, processing plants, and storage facilities, primarily focused on the Permian Basin and other key shale regions in the United States.

8. Micron Technology, Inc. (NASDAQ:MU)

Forward P/E Ratio: 15.20

EPS Growth YoY: 208%

Forward EPS Growth: 68.7%

Price Target Upside: 26.17%

Micron Technology Inc. (NASDAQ:MU) is one of the best cheap growth stocks to buy according to analysts. In August 2025, Micron made two aggressive moves in the data center storage arms race. On August 5, the company unveiled the 6600 ION SSD, a PCIe Gen 5 drive offering an eye-watering 122 terabytes of capacity in a single U.2 form factor. Micron stated that this drive is designed for hyperscale and enterprise data centers, with efficiency metrics like 1 watt per 4.9TB and up to 88 petabytes per rack. A 245TB version is already slated for 2026, reinforcing Micron’s push to replace mechanical hard drives entirely in this segment.

Just days before that, Micron introduced the 9650 SSD, which it billed as the world’s first PCIe Gen 6 drive. Targeted at AI-heavy data center workloads, the 9650 boasts sequential read speeds of 28GB/s, writes at 14GB/s, and up to 5.5 million IOPS, the kind of performance figures that dwarf anything currently on the market. It’s not meant for consumer use and won’t fit in typical PCs, but its presence sets a new ceiling for enterprise-grade storage performance.

Both product launches were clearly aimed at strengthening Micron’s position in the AI infrastructure supply chain, though the company hasn’t made explicit comments tying the products to specific customers or demand signals. The announcements came at a time when hyperscalers are rapidly upgrading backend architecture to keep pace with training and inference loads driven by large language models and other compute-heavy AI use cases.

Micron Technology Inc. (NASDAQ:MU) is based in Boise, Idaho. It’s is a global leader in innovative memory and storage solutions. The company manufactures DRAM, NAND, and NOR flash memory products used across a wide range of industries, including data centers, mobile devices, automotive systems, and industrial applications.

7. Full Truck Alliance Co. Ltd.(NYSE:YMM)

Forward P/E Ratio: 16.28

EPS Growth YoY: 56%

Forward EPS Growth: 32%

Price Target Upside: 30.6%

Full Truck Alliance Co. Ltd. (NYSE:YMM) is one of the best cheap growth stocks to buy according to analysts. On August 1, 2025, the company announced that it will increase service fee rates on its freight brokerage platform beginning in the third quarter. The move is aimed at reducing reliance on government grants, which the company described as uncertain. In its official press release, Full Truck Alliance stated that this decision is expected to result in a significant drop in transaction volumes, a decline in related revenue, and an increase in cost of revenue, all of which could negatively impact its profitability. The company did not provide specific projections, but said the effects would be noticeable starting in the current quarter ending September 30.

The pricing adjustment marks a strategic shift toward more self-sustaining operations, but it comes with short-term financial tradeoffs. While the company’s relative strength rating recently climbed above 80, a common threshold for technically strong stocks, analyst sentiment remains mixed. JPMorgan downgraded the stock from Overweight to Neutral in early August and lowered its price target from $18 to $10, citing valuation concerns.

Based in Guiyang, ChinaFull Truck Alliance Co. Ltd. (NYSE: YMM) operates a digital freight platform that connects shippers with truckers, often referred to as the “Uber for freight” in China. The company provides freight matching, digital transaction services, and other logistics solutions to streamline road transportation across the country.

6. Light & Wonder (NASDAQ:LNW)

Forward P/E Ratio: 14.30

EPS Growth YoY: 20%

Forward EPS Growth: 59%

Price Target Upside: 31.8%

Light & Wonder Inc. (NASDAQ: LNW) is one of the best cheap growth stocks to buy according to analysts. On August 8, 2025, Benchmark analyst Mike Hickey maintained a Buy rating on the stock but trimmed his price target from $100 to $90.

One day earlier, on August 7, JPMorgan downgraded Light & Wonder from Overweight to Neutral and lowered its price target from $108 to $95. JPMorgan analysts expressed concern about the company’s ability to meet its full-year 2025 EBITDA target through organic growth alone. The updated guidance includes EBITDA contributions from a recent acquisition. To hit the midpoint of that target, Light & Wonder would need to grow EBITDA by about 15% in the second half of 2025, a noticeable acceleration from its reported growth of 11% in Q1 and 7% in Q2. The firm also flagged uncertainty around free cash flow and leverage.

Macquarie also updated its position on August 7, maintaining its Outperform rating but cutting its price target from $122 to $117.

Light & Wonder Inc. (NASDAQ: LNW), headquartered in Las Vegas, Nevada, is a global developer and supplier of content and technology for the gaming and lottery industries. The company operates across three business segments: gaming, iGaming, and SciPlay, and provides hardware, systems, and digital platforms to casinos and online operators worldwide.

5. Shift4 Payments, Inc. (NYSE:FOUR)

Forward P/E Ratio: 15.07

EPS Growth YoY: 55%

Forward EPS Growth: 33%

Price Target Upside: 34.79%

Shift4 Payments Inc. (NYSE:FOUR) is one of the best cheap growth stocks to buy according to analysts. On August 6, 2025, UBS lowered its rating on the stock from Outperform to Buy and cut the price target from $125 to $115. The firm cited a weaker-than-expected ramp in enterprise activity despite a healthy $35 billion backlog. End-to-end payment volume slightly missed expectations for the second quarter, and UBS flagged delayed implementations among larger clients. While the Global Blue acquisition is expected to contribute approximately $300 million in revenue and $125 million in EBITDA during the second half of the year, UBS noted that execution risk remains.

On the same day, Goldman Sachs reinstated coverage of Shift4 with a Buy rating and issued a price target of $104. The firm described Shift4 as a compelling growth story, highlighting the company’s acquisition-led strategy as a way to scale without incurring high customer acquisition costs. The Global Blue deal was emphasized as a key example of that approach, allowing the company to expand its footprint in high-end international markets while maintaining capital efficiency.

Shift4 Payments Inc. (NYSE: FOUR) provides integrated payment processing and business solutions for merchants in hospitality, food and beverage, stadiums, casinos, e-commerce, and specialty retail. The company’s ecosystem includes secure payment platforms, software integrations, and analytics tools that support over 200,000 businesses across the United States and abroad.

4. Alamos Gold Inc. (NYSE:AGI)

Forward P/E Ratio: 18.83

EPS Growth YoY: 63%

Forward EPS Growth: 53%

Price Target Upside: 40%

Alamos Gold Inc. (NYSE:AGI) is one of the best cheap growth stocks to buy according to analysts. On August 8, 2025, Alamos Gold filed a base shelf prospectus enabling the company to issue up to US $500 million in securities, including common shares, debt instruments, warrants, and subscription receipts, over the next 25 months.

The filing specifically states that there are no current plans to issue securities, positioning the move purely as a precaution to maintain financial flexibility, and it replaces a previous prospectus that expired in June 2025.

Alamos Gold Inc. is a Canadian-based intermediate gold producer. Its operations span the Island Gold District and Young‑Davidson mine in Ontario, as well as the Mulatos District in Mexico. The company emphasizes low-cost, long-life assets, with a development pipeline that includes the Phase 3+ expansion at Island Gold and the Lynn Lake project in Manitoba.

3. Stagwell Inc. (NASDAQ:STGW)

Forward P/E Ratio: 6.66

EPS Growth YoY: 21.4%

Forward EPS Growth: 21%

Price Target Upside: 48.29%

Stagwell Inc. (NASDAQ:STGW) is one of the best cheap growth stocks to buy according to analysts. On July 9, 2025, Stagwell announced the launch of the Stagwell Media Platform (SMP), a centralized team integrating the company’s media, technology, and data investment arms under one umbrella. The platform is designed to streamline operations and enhance performance across Stagwell’s global media business by leveraging AI-driven insights to optimize trading and buying strategies.

Matt Adams was appointed as the Global CEO of SMP, bringing over two decades of experience in media and agency leadership. Marissa Jimenez was also named Global Chief Trading and Solutions Officer, effective July 14, signaling an emphasis on operational efficiency and innovation in media buying. SMP is expected to serve as a backbone for Stagwell’s broader growth strategy, which includes delivering $80–100 million in AI-led efficiencies and driving toward its long-term revenue goal of $5 billion.

Stagwell Inc. (NASDAQ:STGW), headquartered in New York City, is a digital-first marketing and communications firm. Its portfolio spans advertising, research, strategy, and media services across dozens of brands. The company positions itself at the intersection of creativity and data, delivering marketing transformation for clients globally.

2. Harmony Biosciences Holdings Inc. (NASDAQ:HRMY)

Forward P/E Ratio: 8.68

EPS Growth YoY: 58.41%

Forward EPS Growth: 22%

Price Target Upside: 61%

Harmony Biosciences Holdings, Inc. (NASDAQ:HRMY) is one of the best cheap growth stocks to buy according to analysts. On August 11, 2025, Mizuho Securities raised its price target on Harmony Biosciences from $48 to $50 while maintaining an Outperform rating on the stock. The update came following investor meetings that, according to the firm, increased their confidence in Harmony’s ongoing Phase 3 trial of ZYN002 for Fragile X syndrome. Based on the updated outlook, Mizuho adjusted its probability-of-success estimate for the trial to 60%.

The ZYN002 trial is a key pipeline focus for Harmony and represents one of its more advanced late-stage programs. A successful outcome could help the company diversify beyond its lead asset, WAKIX®, and strengthen its position in neurological rare disease markets. While no further timeline details were provided in the rating note, the trial’s topline data is expected within the current quarter.

Harmony Biosciences Holdings Inc. (NASDAQ:HRMY), headquartered in Plymouth Meeting, Pennsylvania, is a commercial-stage pharmaceutical company focused on central nervous system disorders. Its lead product, WAKIX® (pitolisant), is FDA-approved for the treatment of excessive daytime sleepiness or cataplexy in adult patients with narcolepsy.

1. Gambling.com Group Limited (NASDAQ:GAMB)

Forward P/E Ratio: 8.89

EPS Growth YoY: 96%

Forward EPS Growth: 38%

Price Target Upside: 71%

Gambling.com Group Limited (NASDAQ:GAMB) is one of the best cheap growth stocks to buy according to analysts. On July 2, 2025, Jefferies analyst David Katz reiterated a Buy rating on Gambling.com Group but lowered the firm’s price target from $20 to $18. The adjustment followed a valuation recalibration, with Katz trimming the applied EV/EBITDA multiple from 10.5x to 10x. Other valuation inputs, including EV/Sales, P/E, and P/FCF multiples, were left unchanged. The firm did not cite any fundamental changes in the company’s financial outlook or growth trajectory as part of the downgrade.

Jefferies has remained consistently bullish on Gambling.com’s business model, which leverages performance marketing to drive customer acquisition for regulated online gambling operators. The company operates a portfolio of publishing assets designed to capture search traffic and funnel it to sportsbook and casino platforms, generating revenue on a cost-per-acquisition basis. Its U.S. footprint has expanded steadily in recent quarters as more states legalize online wagering.

Gambling.com Group Ltd. (NASDAQ:GAMB) is headquartered in St. Helier, Jersey, and is a digital marketing company focused on the online gambling industry. Through its owned-and-operated websites, the company provides comparisons and reviews of gambling operators to help users make informed decisions.

While we acknowledge the potential of GAMB to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than GAMB and that has 100x upside potential, check out our report about this cheapest AI stock.

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