10 Hottest SMID-Cap Stocks So Far In 2025

Page 9 of 9

1. Cidara Therapeutics Inc. (NASDAQ:CDTX)

Sector/Industry: Healthcare/Biotechnology

YTD Total Returns: 716.8%

Market Cap: $6.9 Billion

Number of Hedge Fund Holders: 34

Cidara Therapeutics Inc. (NASDAQ:CDTX) tops our list of the hottest SMID-cap stocks so far in 2025 with a 717% share price surge year-to-date. Following the acquisition announcement by Merck & Co. Inc. (NYSE:MRK), Guggenheim analyst Seamus Fernandez downgraded his rating on Cidara Therapeutics from Buy to Neutral on November 17, according to TheFly. Before the deal, Fernandez had assigned a price target of $167, but after the downgrade, he raised it to the offer price of $221.5.

On November 14, Merck announced the acquisition of Cidara Therapeutics Inc. (NASDAQ:CDTX) in an all-cash deal at $221.5 per share, valuing the transaction at $9.2 billion. The offer price represented a 109% premium over the November 13 closing price of $105.99. Under the deal’s terms, a Merck subsidiary will acquire all of Cidara’s outstanding shares through a tender offer and is expected to close the deal in the first quarter of 2026, after receiving required approvals.

With this deal, Merck plans to expand its infectious disease portfolio with Cidara’s lead drug-Fc conjugates (DFC) candidate, CD388, a late-stage, long-acting antiviral designed to prevent influenza in people at high risk of complications. CD388 is currently in Phase 3 (ANCHOR Study) and has held Breakthrough Therapy and Fast Track designations following positive Phase 2b results.

According to reports, this addition should help Merck offset revenue declines from upcoming patent expirations of its key drug, Keytruda. Underpinning the importance of this deal, Merck CEO Rob Davis noted that CD388 is an “important driver of growth through the next decade.”

On the day of the announcement, Cidara Therapeutics Inc.’s (NASDAQ:CDTX) stock rallied by over 105% to close near the offer price. With that, the stock has rallied 717% year to date.

Apart from Guggenheim, analysts, including those from H.C. Wainwright, JPMorgan, and RBC Capital, also downgraded the stock to Hold. Morgan Stanley analyst Maxwell Skor expects the deal to sail through as per plans, and thus downgraded the stock to Equal Weight, raising his price target to the offer price of $221.5.

Cidara Therapeutics Inc. (NASDAQ:CDTX) is a clinical-stage biotechnology company. It develops anti-infectives for the treatment and prevention of fungal, bacterial, and viral pathogens.

While we acknowledge the potential of CDTX 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 CDTX and that has 100x upside potential, check out our report about this cheapest AI stock.

READ NEXT: 30 Most Fantastic Stocks Every Investor Should Pay Attention To and 13 Best Stocks to Buy According to Citadel LLC.

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.

Page 9 of 9