10 Best Small Cap Tech Stocks With Biggest Upside Potential

3. Sunrun Inc. (NASDAQ:RUN)

Number of Hedge Fund Holders: 36

Market Capitalization as of June 20: $1.42 billion 

Average Upside Potential as of June 20: 60.51%

Sunrun Inc. (NASDAQ:RUN) is one of the best small cap tech stocks with biggest upside potential. On June 18, RBC Capital Markets downgraded Sunrun from Outperform to Sector Perform and halved its price target from $12 to $5. The adjustment was prompted by concerns over a recent US Senate proposal that signals the potential elimination of Section 25D residential solar leasing tax credits.

While the proposed Senate reconciliation bill preserves tax credits for battery storage, which accounts for ~70% of Sunrun’s installations, the solar portion of these systems, which represents less than 30% of the installation value, would no longer qualify for subsidies. RBC analysts believe that without these subsidies, Sunrun’s offerings may struggle to compete with conventional utilities across most US regions.

This competitive disadvantage could only be mitigated by declines in interest rates or system costs, or increases in utility prices. RBC also highlighted the elevated soft costs in the US solar market, including high sales and marketing expenses, permitting fees, and overheads. Still, the company was able to generate $56 million in cash in Q1 2025, which marked its 4th consecutive quarter of positive cash generation.

Sunrun Inc. (NASDAQ:RUN) designs, develops, installs, sells, owns, and maintains residential solar energy systems in the US.