On Tuesday, the Dow Jones Industrial Average dropped 0.98%, mainly because of worries about rising US inflation and mixed earnings reports from big banks. The S&P 500 also fell by 0.4%, easing off the fresh record high it had reached earlier in the session. In contrast, the Nasdaq Composite gained 0.18% as a result of gains in technology stocks.
The inflation data that was released on Tuesday showed an increase in June compared to May levels. The consumer price index (CPI) rose by 0.3% on the month, bringing the annual inflation rate to 2.7%. Core CPI, which excludes food and energy prices, increased 0.2% month over month, which was less than expected. However, it grew 2.9% year-over-year, which aligned with estimates.
This report sparked fears that President Trump’s tariffs are pushing prices higher. On Saturday, the US President announced plans to impose a 30% tariff on imports from the European Union and Mexico starting August 1.
Matthew Ryan, head of market strategy at global financial services firm Ebury, noted that the latest inflation report practically confirms that President Trump‘s tariffs contributed to pushing consumer prices higher in June.
With this background in mind, let’s take a look at the 10 best small-cap stocks to buy according to billionaires.
A senior executive looking up at a large boardroom filled with the stocks their company manages.
Our Methodology
To compile our list of the 10 best small-cap stocks to buy according to billionaires, we used the Finviz stock screener to look for stocks with a market capitalization between $300 million and $2 billion. We sorted our results based on market capitalization and picked the top 100 stocks. Next, we focused on the top 10 stocks most favored by billionaires. Data for the number of billionaire investors for each stock was taken from Insider Monkey’s Q4 2024 database. Finally, the 10 best small-cap stocks to buy were ranked in ascending order based on the number of billionaires holding stakes in them as of Q4 2024.
Additionally, we mentioned the hedge fund sentiment surrounding each stock, which was taken from Insider Monkey’s Q1 2025 database of 1,000 elite hedge funds.
Why do we care about what hedge funds do? 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 According to Billionaires
10. Viasat, Inc. (NASDAQ:VSAT)
Market Capitalization: $1.97 Billion
Number of Billionaire Investors: 11
Number of Hedge Fund Holders: 32
Viasat, Inc. (NASDAQ:VSAT) is one of the best small-cap stocks to buy according to billionaires. On July 1, Viasat, Inc. (NASDAQ:VSAT) announced that Inmarsat Maritime has received orders for more than 1,000 vessels for NexusWave.
This strong performance came after months of rigorous development and testing. In just six months since the service launched, global customers are already adopting NexusWave for their fleets. This shows that the global shipping industry has a strong appetite for a fully managed, high-speed, bonded connectivity service.
In May 2023, Viasat, Inc. (NASDAQ:VSAT) completed its acquisition of Inmarsat to bring together the teams, technologies, and resources of both companies to form a new global communications partner.
Inmarsat’s NexusWave combines Global Xpress (GX) Ka-band, low-Earth orbit (LEO), coastal LTE, and resilient L-band services into one fully managed solution. Recent tests have shown that NexusWave can reach download speeds up to 340 Mbps and upload speeds up to 80 Mbps. The network is very reliable as availability on vessels has consistently surpassed 99.9%. Additionally, the quality of video calls is not affected by the availability or performance of any single network.
Users also enjoy unlimited data, global coverage, and secure-by-design infrastructure to protect the connections at sea.
Viasat, Inc. (NASDAQ:VSAT) is a global communications technology company that provides internet and other communication services to consumers, businesses, governments, and militaries around the world. The company offers important communications solutions that are available on the ground, in the air, at sea, and in space.
9. WisdomTree, Inc. (NYSE:WT)
Market Capitalization: $1.85 Billion
Number of Billionaire Investors: 11
Number of Hedge Fund Holders: 34
WisdomTree, Inc. (NYSE:WT) is one of the best small-cap stocks to buy according to billionaires. On June 26, Goldman Sachs analyst Alexander Blostein upgraded WisdomTree, Inc. (NYSE:WT) from “Sell” to “Neutral” and raised the price target from $9.50 to $11.90.
The research firm sees encouraging signs that WisdomTree, Inc. (NYSE:WT) is experiencing broader and faster fund flows, which are expected to drive unique organic base fee growth in the coming years. Goldman Sachs pointed out that the company’s mix of flows is becoming more diversified.
The analyst told investors in a research note that WisdomTree, Inc. (NYSE:WT) has averaged about 9% organic growth over the past three years. Goldman Sachs expects this positive trend to continue and projects mid-to-high single-digit growth in organic base fees through 2027.
Additionally, the firm increased its earnings per share estimates for WisdomTree, Inc. (NYSE:WT). The new forecasts are $0.73 for 2025, $0.84 for 2026, and $0.95 for 2027. These are above the firm’s previous estimates of $0.72 for 2025, $0.78 for 2026, and $0.84 for 2027.
WisdomTree is a global financial innovator, offering a well-diversified suite of exchange-traded products (ETPs), models, solutions and products leveraging blockchain technology.
WisdomTree, Inc. (NYSE:WT) is an innovative company in the financial sector that specializes in exchange-traded products (ETPs), including ETFs, and also operates as an asset manager.
8. American Eagle Outfitters, Inc. (NYSE:AEO)
Market Capitalization: $1.74 Billion
Number of Billionaire Investors: 11
Number of Hedge Fund Holders: 35
American Eagle Outfitters, Inc. (NYSE:AEO) is one of the best small-cap stocks to buy according to billionaires. On July 10, UBS reiterated its “Buy” rating for American Eagle Outfitters, Inc. (NYSE:AEO) with a price target of $19.
The investment firm believes that the company’s Aerie brand can be a key driver of future growth.
UBS expects Aerie to drive “surprising top-line growth” for American Eagle Outfitters, Inc. (NYSE:AEO). The firm projects the company’s earnings per share to grow at a compound annual growth rate of 10% over the next five years.
The firm also noted that American Eagle Outfitters, Inc.’s (NYSE:AEO) earnings growth could cause the stock’s price-to-earnings ratio to return to its past five-year mean. Based on conversations with investors, UBS believes that the market is being overly negative about the stock.
Additionally, UBS recently attended retail bus tour store visits with American Eagle Outfitters, Inc.’s (NYSE:AEO) management in Chicago. These visits reinforced the firm’s positive stance on the company.
American Eagle Outfitters, Inc. (NYSE:AEO) is an American multinational specialty retailer offering clothing, accessories, and personal care products under its American Eagle and Aerie brands.
7. TeraWulf Inc. (NASDAQ:WULF)
Market Capitalization: $1.87 Billion
Number of Billionaire Investors: 11
Number of Hedge Fund Holders: 35
TeraWulf Inc. (NASDAQ:WULF) is one of the best small-cap stocks to buy according to billionaires. On May 27, TeraWulf Inc. (NASDAQ:WULF) announced the acquisition of all the membership interests of Beowulf Electricity & Data LLC and its affiliates.
This deal helps TeraWulf Inc. (NASDAQ:WULF) make its company structure simpler by removing a related-party relationship and consolidating resources under a unified operating framework.
The total consideration for the acquisition is about $52.4 million. This includes $3 million in cash and 5 million shares of TeraWulf Inc. (NASDAQ:WULF) common stock issued at closing. Following this deal, the company’s earlier cost guidance for 2025 remains unchanged.
Beowulf Electricity & Data LLC and its affiliates bring strong experience in building and operating power generation assets and electrical infrastructure. By integrating these capabilities into TeraWulf Inc. (NASDAQ:WULF), the company aims to support its long-term growth plans. This is especially important as power generation plays a crucial role in high-power compute operations.
TeraWulf Inc. (NASDAQ:WULF) is an American company that develops, owns, and operates next-generation data center infrastructure that is specifically designed for Bitcoin mining and hosting high-power computing workloads.
6. Madison Square Garden Entertainment Corp. (NYSE:MSGE)
Market Capitalization: $1.88 Billion
Number of Billionaire Investors: 11
Number of Hedge Fund Holders: 43
Madison Square Garden Entertainment Corp. (NYSE:MSGE) is one of the best small-cap stocks to buy according to billionaires. On June 9, Madison Square Garden Entertainment Corp. (NYSE:MSGE) held a special meeting of stockholders, which was conducted via live webcast.
The company got approval from its shareholders to officially change its state of incorporation from Delaware to Nevada.
Nevada is seen as a business-friendly state. This change does not affect Madison Square Garden Entertainment Corp.’s (NYSE:MSGE) operations, its management, or any material contracts. Additionally, shareholders were not required to exchange their existing stock certificates for new stock certificates.
Madison Square Garden Entertainment Corp. (NYSE:MSGE) believes that Nevada offers predictability and certainty in decision-making because of its statutory regime. The company expects that the Nevada re-domestication process will lower the risk of lawsuits against the company, its directors, and officers, which can be time-consuming and expensive. Madison Square Garden Entertainment Corp. (NYSE:MSGE) also expects this move to provide more flexibility for certain corporate transactions.
Moreover, the company expects to save nearly $250,000 by being a Nevada corporation instead of a Delaware corporation. For the last franchise tax period, Madison Square Garden Entertainment Corp. (NYSE:MSGE) paid $250,000 in franchise taxes to the state of Delaware, which it will no longer have to pay.
Madison Square Garden Entertainment Corp. (NYSE:MSGE) is an American live entertainment company. The company is known for its portfolio of venues that include New York’s Madison Square Garden, The Theater at Madison Square Garden, Radio City Music Hall, Beacon Theatre, and The Chicago Theatre.
5. Sarepta Therapeutics, Inc. (NASDAQ:SRPT)
Market Capitalization: $1.79 Billion
Number of Billionaire Investors: 11
Number of Hedge Fund Holders: 47
Sarepta Therapeutics, Inc. (NASDAQ:SRPT) is one of the best small-cap stocks to buy according to billionaires. On July 10, JPMorgan lowered its price target for Sarepta Therapeutics, Inc. (NASDAQ:SRPT) from $30 to $28 but kept an “Overweight” rating.
JPMorgan highlighted that there is a “valuation disconnect” and the current stock price does not fully reflect the long-term value of the company’s business.
Sarepta Therapeutics, Inc. (NASDAQ:SRPT) has three FDA-approved treatments for Duchenne Muscular Dystrophy (DMD) with amenable mutations. These treatments are known as Exondys 51, Vyondys 53, and Amondys 45.
Additionally, JPMorgan analysts noted that the company’s gene therapy, Elevidys, has full approval for use in all ambulatory DMD patients.
The company’s gene therapy Elevidys currently has full approval for all ambulatory DMD patients, according to JPMorgan. However, Elevidys still holds accelerated approval status while Sarepta Therapeutics, Inc. (NASDAQ:SRPT) continues discussions with the FDA.
Sarepta Therapeutics, Inc. (NASDAQ:SRPT) is a medical research and drug development company focused on developing precision genetic medicines for rare diseases. The company has leading positions in Duchenne muscular dystrophy (DMD) and limb-girdle muscular dystrophies (LGMDs).
4. Amicus Therapeutics, Inc. (NASDAQ:FOLD)
Market Capitalization: $1.82 Billion
Number of Billionaire Investors: 11
Number of Hedge Fund Holders: 47
Amicus Therapeutics, Inc. (NASDAQ:FOLD) is one of the best small-cap stocks to buy according to billionaires. On June 25, Amicus Therapeutics, Inc. (NASDAQ:FOLD) reported that it received approval for Pombiliti (cipaglucosidase alfa) + Opfolda (miglustat) for the treatment of adults with late-onset Pompe disease (LOPD) from Japan’s Ministry of Health, Labour and Welfare (MHLW).
According to the report by Amicus Therapeutics, Inc. (NASDAQ:FOLD), Pombiliti + Opfolda works as a two-component therapy. Pombiliti is a special enzyme designed for increased uptake into muscle cells, while Opfolda is an enzyme stabilizer that helps keep this enzyme stable in the blood.
Amicus Therapeutics, Inc. (NASDAQ:FOLD) has now received approvals for Pombiliti + Opfolda in the United States, the European Union, the United Kingdom, Canada, Australia, Switzerland, and Japan.
Amicus Therapeutics, Inc. (NASDAQ:FOLD) is an American biopharmaceutical company that discovers, develops, and delivers novel medicines for people living with rare diseases.
3. Century Aluminum Company (NASDAQ:CENX)
Market Capitalization: $1.87 Billion
Number of Billionaire Investors: 12
Number of Hedge Fund Holders: 34
Century Aluminum Company (NASDAQ:CENX) is one of the best small-cap stocks to buy according to billionaires. On June 2, Century Aluminum Company (NASDAQ:CENX) praised President Trump’s decision to raise tariffs on imported aluminum from 25% to 50%.
This move aims to encourage investment and job growth in the US aluminum industry and support the nation’s domestic production of critical metals.
With this support, Century Aluminum Company (NASDAQ:CENX) has announced plans to build the first new aluminum smelter in the US in 50 years. The company also intends to double its domestic production.
Century Aluminum Company (NASDAQ:CENX) is the largest producer of primary aluminum in the US. The company is an integrated producer of bauxite, alumina, and primary aluminum products. It also has production facilities in Iceland, the Netherlands, and Jamaica.
2. Cogent Biosciences, Inc. (NASDAQ:COGT)
Market Capitalization: $1.60 Billion
Number of Billionaire Investors: 12
Number of Hedge Fund Holders: 37
Cogent Biosciences, Inc. (NASDAQ:COGT) is one of the best small-cap stocks to buy according to billionaires. On July 7, Jefferies increased its price target on Cogent Biosciences, Inc. (NASDAQ:COGT) from $23 to $28 and reiterated a “Buy” rating.
This decision came as the research firm noted strong results from the SUMMIT trial for non-advanced systemic mastocytosis (non-AdvSM). All of the trial’s primary and secondary endpoints achieved statistically significant comparisons in favor of bezuclastinib over placebo.
The data showed a reduction of -8.91 in placebo-adjusted Total Symptom Score (TSS). Jefferies analysts pointed out that this is about 57% better than the competing drug Ayvakit. These results are even more impressive because Cogent Biosciences, Inc.’s (NASDAQ:COGT) trial included patients with more severe baseline conditions.
According to the research note, the safety results were also positive, as Grade 3 AST/ALT elevations came in at 5.9%. This is an improvement from the 10% seen in earlier data.
Jefferies analysts believe that Cogent Biosciences, Inc. (NASDAQ:COGT) will have a market opportunity of approximately $1 billion for bezuclastinib in indolent systemic mastocytosis (ISM). The drug has additional potential in advanced systemic mastocytosis (ASM) and gastrointestinal stromal tumor (GIST), which means the total addressable market could grow.
Cogent Biosciences, Inc. (NASDAQ:COGT) is a biotechnology company focused on developing precision therapies for genetically defined diseases.
1. Huntsman Corporation (NYSE:HUN)
Market Capitalization: $1.92 Billion
Number of Billionaire Investors: 12
Number of Hedge Fund Holders: 38
Huntsman Corporation (NYSE:HUN) is one of the best small-cap stocks to buy according to billionaires. On June 16, Jefferies reduced its price target on Huntsman Corporation (NYSE:HUN) from $19 to $17 but kept a “Buy” rating.
The research firm cited continued weakness in the construction and automotive demand. This weakness is expected to keep affecting Huntsman Corporation’s (NYSE:HUN) sales volumes throughout the summer. Jefferies also pointed out that any seasonal increase in business has likely been muted.
As per Jefferies analysts, Huntsman Corporation’s (NYSE:HUN) second-quarter EBITDA is expected to be near the low end of the $60-$90 million range. Because of weaker-than-normal conditions expected in the second half of this year, the firm also lowered its 2025 EBITDA forecast for Huntsman Corporation (NYSE:HUN) by 13%.
The firm believes that a cyclical recovery for the company may be delayed until late 2026 or 2027. Despite lowering the price target, Jefferies analysts kept the Buy rating. This shows longer-term confidence in the company’s business prospects.
Huntsman Corporation (NYSE:HUN) is an American multinational manufacturer and marketer of differentiated and specialty chemicals. The company serves a wide range of consumers and industrial end markets.
While we acknowledge the potential of HUN as an investment, 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 HUN and that has a 100x upside potential, check out our report about this cheapest AI stock.
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