In this article, we will look at the 10 Hottest Small Cap Stocks to Buy Now.
On November 12, Scott Chronert, Citi’s U.S. equity strategist, appeared on a CNBC Television interview to discuss his bullish case for small- and mid-cap stocks. He noted that as the market approaches the end of the year, investors are increasingly paying for 2026 earnings growth expectations. Chornert acknowledges that the Mag 7 companies are expected to continue their performance in 2026, driven by AI. However, the market is set up even more favorably for small and mid-cap stocks to catch up.
Chornert backed this thesis by mentioning consensus expectations, which suggest small and mid-cap stocks to go from low single-digit earnings growth in 2025 to low double-digit growth in 2026. He noted that these companies during the recent Q3 earnings raised Q4 and 2026 guidance, which further supports his thesis. Chornert believes that this is because the smaller-cap companies are coming from a two-year streak of low earnings, which naturally sets the comparison in favour of the small and mid-caps. Moreover, the noise from administration policy and high chances of at least one or two more Fed rate cuts set the stage for an earnings growth catch-up.
Chornert’s bottom line is that while the large-caps will perform in 2026, the fundamentals are more biased towards small-caps catching up on earnings growth.
Now that we have discussed the bull case for small-cap stocks, let’s take a look at the 10 Hottest Small Cap Stocks to Buy Now.
Our Methodology
To compile the list of 10 Hottest Small Cap Stocks to Buy Now, we used the Finviz Stock Screener, WSJ, Yahoo Finance, and Insider Monkey’s Q2 2025 database. Using the screener, we aggregated a list of small-cap stocks (Market Cap between $300 million and $2 billion) that have gained more than 50% over the past 6 months. Next, we cross-checked the performance of each stock from Yahoo Finance and the market capitalization from WSJ. Lastly, we ranked the stocks in ascending order of the number of hedge fund holders, sourced from Insider Monkey’s database. Please note that the data was recorded on November 12, 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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
10 Hottest Small Cap Stocks to Buy Now
10. Aveanna Healthcare Holdings Inc. (NASDAQ:AVAH)
Market Capitalization: $1.88 billion
6-Month Performance: 55.36%
Number of Hedge Fund Holders: 20
Aveanna Healthcare Holdings Inc. (NASDAQ:AVAH) is one of the Hottest Small Cap Stocks to Buy Now. On November 13, BMO Capital initiated coverage of Aveanna Healthcare Holdings Inc. (NASDAQ:AVAH) with an Outperform rating and a $11 price target.
The firm noted that the stock has gained approximately 130% since August, supported by strong Q2 and Q3 results. The firm highlighted that the company has benefited from state reimbursement increases, disciplined cost control, and preferred payer expansion. These efforts have also helped lower leverage, commented the analyst from BMO Capital.
The bullish sentiment follows the release of fiscal Q3 2025 results by Aveanna Healthcare Holdings Inc. (NASDAQ:AVAH) announced on November 6. The revenue grew by 22.2% year-over-year to $621.9 million and topped analysts’ consensus by $30.76 million, along with an EPS of $0.15, also surpassing estimates by $0.01. Management attributed revenue growth to a $104.9 million increase in PDS segment revenue and a $8.3 million increase in HHH segment revenue. However, the revenue was partially offset by a $0.2 million decrease in MS segment revenue.
Notably, Aveanna Healthcare Holdings Inc. (NASDAQ:AVAH) grew its adjusted EBITDA by 67.5% year-over-year to $80.1 million during the quarter. The growth was attributed to improved rate, volume, environment, and continued cost savings initiatives. In addition, taking confidence from the improved momentum, management also raised its full-year guidance. It expects full-year revenue to surpass $2.375 billion, up from the previous anticipation of $2.3 billion.
Aveanna Healthcare Holdings Inc. (NASDAQ:AVAH) provides diversified home care services, including private duty nursing, home health and hospice care, and medical solutions such as enteral nutrition supplies.
9. Spyre Therapeutics, Inc. (NASDAQ:SYRE)
Market Capitalization: $1.81 billion
6-Month Performance: 56.40%
Number of Hedge Fund Holders: 21
Spyre Therapeutics, Inc. (NASDAQ:SYRE) is one of the Hottest Small Cap Stocks to Buy Now. On November 4, Spyre Therapeutics, Inc. (NASDAQ:SYRE) announced positive interim Phase 1 results for SPY003, which is its novel, half-life extended Anti-IL-23 antibody. The treatment is being tested for curing inflammatory bowel disease and rheumatic diseases.
During the trial, SPY003 showed a half-life of approximately 85 days, supporting maintenance dosing of three or six months. Management noted that the trial was randomized, double-blind, and placebo-controlled with 59 healthy volunteers at various doses. In addition, the drug also demonstrated a favourable safety profile, with no serious adverse events.
On the same day, Julian Harrison of BTIG maintained Spyre Therapeutics, Inc. (NASDAQ:SYRE) with a Buy rating and a $70 price target. He noted that the extended half-life supports less frequent dosing, which is a critical advancement for SPY003 as a valuable component in combination therapies.
Moreover, Harrison also mentioned the company’s unique ability to combine multiple monoclonal antibodies into a single treatment. In terms of finances, the analyst noted the company to be well-positioned with a substantial cash runway to fund operations till the second half of 2028.
Spyre Therapeutics, Inc. (NASDAQ:SYRE) is a clinical-stage biotechnology company that develops antibody-based therapies for inflammatory bowel disease and other immune-related conditions.
