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.
8. Phibro Animal Health Corporation (NASDAQ:PAHC)
Market Capitalization: $1.84 billion
6-Month Performance: 85.02%
Number of Hedge Fund Holders: 23
Phibro Animal Health Corporation (NASDAQ:PAHC) is one of the Hottest Small Cap Stocks to Buy Now. On November 7, Ekaterina Knyazkova from J.P. Morgan raised the firm’s price target on Phibro Animal Health Corporation (NASDAQ:PAHC) from $45 to $50 and maintained a Buy rating. On the same day, Erin Wright from Morgan Stanley also raised the price target on the stock from $34 to $45, but maintained a Hold rating.
This improved positive outlook follows the company’s announcement of fiscal Q1 2026 results on November 5. During the quarter, Phibro Animal Health Corporation (NASDAQ:PAHC) grew its revenue by 39.73% year-over-year to $363.9 million, surpassing estimates by $18.46 million. Moreover, the EPS of $0.73 also topped estimates by $0.13.
Management attributed net sales growth to a $100.9 million increase in Animal Health segment revenue and a $3.9 million increase in Mineral Nutrition revenue. The Animal Health segment particularly benefitted from an 81% year-over-year increase in MFAs net sales. Management noted that the MFAs net sales were driven by incremental revenues of $80.5 million from the MFA portfolio acquired on October 31, 2024, and from an increased demand across America.
Moreover, Phibro Animal Health Corporation (NASDAQ:PAHC) also updated full-year net income guidance to 66% growth versus the previous guidance of 63% growth. However, the revenue guidance of 12% growth remains unchanged. Management noted they improved the income guidance based on the momentum and favorability witnessed during Q1; however, they felt it’s too soon to update revenue guidance for the year.
Phibro Animal Health Corporation (NASDAQ:PAHC) is a global diversified company that develops, manufactures, and markets animal health and mineral nutrition products.
7. Establishment Labs Holdings Inc. (NASDAQ:ESTA)
Market Capitalization: $1.99 billion
6-Month Performance: 97.95%
Number of Hedge Fund Holders: 28
Establishment Labs Holdings Inc. (NASDAQ:ESTA) is one of the Hottest Small Cap Stocks to Buy Now. On November 5, Establishment Labs Holdings Inc. (NASDAQ:ESTA) announced results for its fiscal Q3 2025, which topped analysts’ estimates. The stock has gained more than 27% since the release, bringing it on Wall Street’s radar.
During the quarter, Establishment Labs Holdings Inc. (NASDAQ:ESTA) delivered a revenue of $53.78 million, reflecting 33.7% year-over-year growth and surpassing estimates by $1.5 million. The EPS of negative $0.38 also exceeded expectations by $0.15. Management noted revenue growth to be driven by $11.9 million in sales of Motiva in the United States and strong sales in its direct markets.
In addition, management mentioned its US business to be a critical growth segment. The company’s US business was up 16% subsequently in a seasonally slower quarter for breast procedures, where markets can be down 20% to 30%, noted the management.
However, the fourth quarter is the strongest quarter for breast augmentation, and the company is already witnessing sales acceleration in the United States, added Peter Caldini, Chief Executive Officer of Establishment Labs Holdings Inc. (NASDAQ:ESTA). Therefore, management expects to end 2025 with approximately 20% share of the US breast augmentation market and exceed its previous guidance of $40 million in US Motiva sales.
Establishment Labs Holdings Inc. (NASDAQ:ESTA) is a medical technology company focused on women’s health. The company specializes in designing, developing, manufacturing, and marketing silicone-filled breast and body shaping implants.
6. Terns Pharmaceuticals, Inc. (NASDAQ:TERN)
Market Capitalization: $1.85 billion
6-Month Performance: 581.46%
Number of Hedge Fund Holders: 28
Terns Pharmaceuticals, Inc. (NASDAQ:TERN) is one of the Hottest Small Cap Stocks to Buy Now. On November 11, Andy Hsieh from William Blair reiterated a Buy rating on Terns Pharmaceuticals, Inc. (NASDAQ:TERN) without disclosing any price targets.
The rating follows the company’s fiscal third-quarter results announced on November 10. The company reported positive momentum for its CARDINAL program for its TERN-701, which is in Phase 1 trial for treating chronic myeloid leukemia. Earlier in November, Terns Pharmaceuticals, Inc. (NASDAQ:TERN) released an abstract with updated data from the ongoing Phase 1 CARDINAL trial, which showed encouraging results suggesting TERN-701 can become a best-in-disease treatment.
Andy Hsieh of William Blair noted the initial results from the study suggest that TERN-701 has the potential to impact the chronic myeloid leukemia treatment market. Hsieh believes the drug can challenge the current market leaders, including Scemblix, for both treatment-naive and relapsed populations. Moreover, the analyst also likes the company’s financial position with $295 million in cash, expected to fund operations into 2028.
Terns Pharmaceuticals, Inc. (NASDAQ:TERN) is a clinical-stage biopharmaceutical company developing small-molecule product candidates to treat serious diseases, including cancer and obesity.
5. Avadel Pharmaceuticals plc (NASDAQ:AVDL)
Market Capitalization: $1.84 billion
6-Month Performance: 96.35%
Number of Hedge Fund Holders: 96.35%
Avadel Pharmaceuticals plc (NASDAQ:AVDL) is one of the Hottest Small Cap Stocks to Buy Now. On November 5, Ami Fadia from Needham reiterated a Hold rating on Avadel Pharmaceuticals plc (NASDAQ:AVDL) without disclosing any price target.
The rating follows the company’s Q3 2025 results released on November 4. During the quarter, the company grew its revenue by 54.86% year-over-year to $77.47 million, surpassing analysts’ estimates by $3.89 million. However, the EPS of $0 fell short of the expectations by $0.05. Management attributed revenue growth to robust sales of LUMRYZ and a 48% increase to 3,400 patients on LUMRYZ as of September 30, 2025.
Although Avadel Pharmaceuticals plc (NASDAQ:AVDL) missed EPS estimates, its net income of $20,000 for the quarter was significant. The net income reflected a significant improvement versus the same quarter previous year, where the company reported a net loss of $2.6 million, translating to a negative EPS of $0.03. This was aided by a reversal of $9.5 million by Jazz in conjunction with the Settlement Agreement.
Avadel Pharmaceuticals plc (NASDAQ:AVDL) is a biopharmaceutical company that develops extended-release drug formulations to improve patient treatment experiences. Their main product, LUMRYZ, is an FDA-approved once-at-bedtime extended-release sodium oxybate therapy for excessive daytime sleepiness in adults and children with narcolepsy.
4. Pediatrix Medical Group, Inc. (NYSE:MD)
Market Capitalization: $1.94 billion
6-Month Performance: 57.45%
Number of Hedge Fund Holders: 30
Pediatrix Medical Group, Inc. (NYSE:MD) is one of the Hottest Small Cap Stocks to Buy Now. On November 10, David S Macdonald from Truist Financial raised the firm’s price target on Pediatrix Medical Group, Inc. (NYSE:MD) from $17 to $24, while reiterating a Buy rating.
The enhanced positive outlook follows a 33.59% increase in share price since the company released its fiscal Q3 2025 results on November 3. The company delivered $492.88 million in quarterly revenue, down 3.58% year-over-year, but surpassing analysts’ estimates by $16.43 million. The EPS of $0.67 also topped the consensus by $0.20.
Management attributed the decrease in revenue to its portfolio restructuring activity of approximately $54 million. However, the decrease was offset by 8% growth in same-unit, 7.5% increase in same-unit pricing, and around 40 basis points increase in patient service volumes.
In addition, the adjusted EBITDA for the quarter reached $87 million, exceeding management’s expectations. This was driven by positive pricing outcomes, collections, and expense controls. As a result, Pediatrix Medical Group, Inc. (NYSE:MD) raised its full-year adjusted EBITDA guidance to a range of $270 million to $290 million, up from the previous guidance range of $245 million to $255 million.
Pediatrix Medical Group, Inc. (NYSE:MD) is a leading provider of specialized physician services for women, babies, and children, focusing on newborn, maternal-fetal, and pediatric subspecialty care.
3. nLIGHT, Inc. (NASDAQ:LASR)
Market Capitalization: $1.77 billion
6-Month Performance: 178.69%
Number of Hedge Fund Holders: 30
nLIGHT, Inc. (NASDAQ:LASR) is one of the Hottest Small Cap Stocks to Buy Now. On November 7, Cantor Fitzgerald analyst Troy Jensen raised the firm’s price target on nLIGHT, Inc. (NASDAQ:LASR) from $33.50 to $40 and maintained an Overweight rating on the stock. On the same day, Ruben Roy from Stifel Nicolaus also reiterated a Buy rating on the stock and raised the price target from $26 to $40.
The positive outlook is followed by the company’s fiscal Q3 2025 results announced on November 6. During the quarter, the company grew its revenue by 18.91% year-over-year to $66.74 million, surpassing estimates by $2.85 million. Moreover, the EPS of $0.08 also topped consensus by $0.06. Management attributed revenue growth to a record aerospace and defense revenue, which contributed $46 million to the total revenue, driven by a 70% growth in defense product sales.
nLIGHT, Inc. (NASDAQ:LASR) also achieved a record product gross margin of 41%, up significantly from 28.8% a year ago. The improvement was supported by a favorable customer and product mix, record revenue from A&D markets, and an overall increase in volume.
Analyst Troy of Cantor Fitzgerald commented in his research note that he sees continued strength for the company, driven by near-term product growth and a growing pipeline of new opportunities.
nLIGHT, Inc. (NASDAQ:LASR) designs and manufactures high-power semiconductor and fiber lasers mainly used in aerospace, defense, industrial, and microfabrication sectors.
2. The RealReal, Inc. (NASDAQ:REAL)
Market Capitalization: $1.81 billion
6-Month Performance: 176.43%
Number of Hedge Fund Holders: 35
The RealReal, Inc. (NASDAQ:REAL) is one of the Hottest Small Cap Stocks to Buy Now. On November 10, The RealReal, Inc. (NASDAQ:REAL) announced results for its fiscal Q3 2025. The stock has gained more than 27% since the announcement as the company exceeded expectations.
The RealReal, Inc. (NASDAQ:REAL) posted a revenue of $173.57 million, reflecting 17.47% year-over-year growth and surpassing estimates by $3.32 million. The EPS of negative $0.04 also exceeded the consensus by $0.02. The revenue growth was driven by a 15% increase in consignment revenue and a 47% increase in direct revenue. Notably, GMV for the quarter reached a record high of $520 million, reflecting a year-over-year growth of 20. Management attributed growth in GMV to increased unit volume and higher average selling prices.
Moreover, the company also raised its full-year revenue and Adjusted EBITDA guidance. Revenue for FY 2025 are now expected in the range of $687 million – $690 million, up from the previous range of $667 million – $674 million. The Adjusted EBITDA is anticipated to be in the range of $37.7 million – $38.7 million, versus the previous range of $29.0 million – $32.0 million.
The RealReal, Inc. (NASDAQ:REAL) is an online and physical marketplace that authenticates and sells pre-owned luxury goods such as fashion, jewelry, and watches.
1. uniQure N.V. (NASDAQ:QURE)
Market Capitalization: $1.90 billion
6-Month Performance: 134.52%
Number of Hedge Fund Holders: 36
uniQure N.V. (NASDAQ:QURE) is one of the Hottest Small Cap Stocks to Buy Now. Wall Street has a positive outlook on uniQure N.V. (NASDAQ:QURE) despite the regulatory challenges from the FDA for its experimental gene therapy called AMT-130. On November 12, Yanan Zhu from Wells Fargo also reiterated a Buy rating on uniQure N.V. (NASDAQ:QURE), but lowered the price target from $80 to $60. A day earlier, TD Cowen analyst Joseph Thome had maintained a Buy rating on the stock without disclosing any price target.
Earlier in September, uniQure N.V. (NASDAQ:QURE) presented critical results from a three-year study of their experimental gene therapy called AMT-130, aimed at treating Huntington’s disease. The results showed a significant reduction in disease progression.
However, regardless of the encouraging results, the FDA on November 3 provided negative feedback for AMT-130. As per the management, the FDA no longer thinks the data from their early Phase I/II studies of AMT-130 is enough to support their main evidence for getting approval to sell the therapy. As a result, the timing for the pre-Biologics License Application for AMT-130 is now unclear.
Analyst Joseph Thome from TD Cowen noted that management’s confidence in the data and potential of AMT-130 remains robust. He mentioned the company is in active engagement with the FDA to explore a viable way forward. Thome remains confident in the company’s ability to address these concerns effectively.
uniQure N.V. (NASDAQ:QURE) is a biotechnology company based in the Netherlands that develops gene therapies designed to be given once and potentially cure severe genetic diseases
While we acknowledge the potential of QURE 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 QURE and that has 100x upside potential, check out our report about this cheapest AI stock.
READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
