10 Must-Buy Small-Cap Stocks to Invest In

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1. ThredUp Inc. (NASDAQ:TDUP)

Market cap: $1.37 Billion

Year to date returns: 691.49%

Number of hedge fund holders: 25

ThredUp Inc. (NASDAQ:TDUP) is one of the must-buy small-cap stocks to invest in. On August 4, the company delivered solid second-quarter results driven by strong customer and order growth. Revenue in the quarter increased 16% year-over-year to $77.7 million as Gross profit increased 17% to $61.7 million and gross margin expanded to 79.5% from 78.8% in the second quarter of last year.

The robust revenue growth was driven by a 17% increase in active buyers to 1.47 million and a 21% rise in orders purchased to 1.54 million. Loss from continuing operations shrank to $5.2 million compared to a loss of $9.4 million in the second quarter of last year. The better-than-expected results came as ThredUp continues to benefit from AI investments that are driving buyer and seller acquisition.

ThredUp expects the growth achieved in the second quarter to continue in the third quarter. Therefore, it expects revenue to range between $76 million and $78 million, representing a 25% year-over-year increase. Gross margin is expected to range between 77% and 79%.

ThredUp Inc. (NASDAQ:TDUP) is an online consignment and thrift store specializing in buying and selling secondhand women’s and children’s clothing, shoes, and accessories. It also offers a “Resale-as-a-Service” platform that allows brands and retailers to integrate resale into their businesses.

While we acknowledge the potential of ThredUp Inc. (NASDAQ:TDUP) 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 TDUP and that has 100x upside potential, check out our report about this cheapest AI stock.

READ NEXT: 11 Best Alternative Energy Stocks to Buy Right Now and 13 Best Multibagger Penny Stocks to Buy According to Analysts.

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