On June 11, Jason Furman, former CEA Chair & Harvard Professor, joined ‘Closing Bell Overtime’ on CNBC to talk about the state of the US economy, and how he believes economic hard data over the soft data right now. Regarding the economy, Furman observed that the real economy is holding up surprisingly well. While he noted some slowing in labor markets, he attributed this more to slower potential growth coming from reduced immigrant inflow, rather than a demand deficiency that the Fed could address.

Concerning the US-China trade talks, which Commerce Secretary Lutnick indicated are going well but might continue, Furman expresses a critical view. He believes that the administration should have confronted China on trade earlier. He questioned what a win would look like at this stage of negotiations and pointed out that only the US and China are in the room, and China holds a lot of cards due to US reliance on rare earths for its industries. Furman also discussed the potential impact of future rate cuts on the long end of the yield curve and the broader bond market. He does not believe Fed rate cuts would significantly affect the long end, attributing its current state more to issues with the term premium, concerns about risk associated with the US, and future inflation expectations. He supports the Fed’s current patience and believes that neither price data nor jobs data needs immediate action.

That being said, we’re here with a list of the 10 best small cap tech stocks with biggest upside potential.

Methodology

We sifted through the Finviz stock screener to compile a list of the top small-cap tech stocks trading between $300 million and $2 billion. We then selected 10 stocks that had a high average upside potential of over 25%. The stocks are ranked in ascending order of their average upside potential. We’ve also added the hedge fund sentiment for each stock, which was sourced from Insider Monkey’s database, 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 Best Small Cap Tech Stocks With Biggest Upside Potential

10. PagerDuty Inc. (NYSE:PD)

Number of Hedge Fund Holders: 36

Market Capitalization as of June 20: $1.28 billion

Average Upside Potential as of June 20: 29.31%

PagerDuty Inc. (NYSE:PD) is one of the best small cap tech stocks with biggest upside potential. Earlier on June 2, Canaccord lowered its price target for PagerDuty from $23 to $21, while maintaining a Buy rating on the shares. The revision followed PagerDuty’s Q1 2025 performance, which exceeded guidance.

The company reported revenue of $119.8 million. While this number fell short of the initial expectations, it was still an 8% increase year-over-year, due to effective cost management. The company achieved its third consecutive year of non-GAAP profitability in Q1 and recorded 9% annual growth in both revenue and ARR. Canaccord now expects a notable increase in PagerDuty’s growth by 2026.

Enterprise engagement at PagerDuty improved through a shift towards multi-year and multi-product platform partnerships. Multi-product customers now contribute 65% to the company’s total ARR. The introduction of new AI capabilities and a streamlined packaging structure is also expected to improve operations, although the company faces near-term growth pressure as it moves to an enterprise-focused, top-down value selling approach.

PagerDuty Inc. (NYSE:PD) operates a digital operations management platform internationally.

9. Harmonic Inc. (NASDAQ:HLIT)

Number of Hedge Fund Holders: 35

Market Capitalization as of June 20: $1.00 billion

Average Upside Potential as of June 20: 29.50%

Harmonic Inc. (NASDAQ:HLIT) is one of the best small cap tech stocks with biggest upside potential. Earlier on June 2, Harmonic announced that Vectra has chosen Harmonic’s cOS virtualized broadband platform. The collaboration aims to accelerate Vectra’s expansion of multigigabit broadband services, facilitate selective migration to deep fiber infrastructure, and support new wholesale fiber and DOCSIS offerings.

The deployment marks the world’s first implementation of Harmonic’s PTP-less capability for distributed access architecture/DAA for enhanced reliability, simplified operations, and reduced costs. Vectra will integrate Harmonic’s cOS platform with Reef Remote PHY (R-PHY) Shelves, Oyster DAA nodes, and various remote OLT devices.

Vectra will also utilize Harmonic’s newly launched SeaStar Optical Node to deliver fiber connectivity to lower-density brownfield multi-dwelling units (MDUs) by using existing in-building coax wiring. The adoption of a PTP-less Virtualized Core will streamline overall network operations. The cOS platform will also enable Vectra to selectively migrate from DOCSIS to PON and deliver high-speed fiber connectivity to targeted areas using existing infrastructure, thereby reducing capital expenses.

Harmonic Inc. (NASDAQ:HLIT) provides broadband access solutions worldwide and operates through its Broadband and Video segments. Vectra is a major internet provider in Poland.