On January 29, Michael Sansoterra, Silvant Capital CIO, joined ‘The Exchange’ on CNBC to discuss the recent performance of tech stocks. Sansoterra observed that the ‘Triple Qs’ have been roughly flat since October, which is ‘sad’ when compared to the recent strong performance in small-cap and mid-cap stocks. However, he remains unconcerned about the flat start to the year and emphasizes that earnings and free cash flow are the primary drivers of value. He anticipates that the upcoming earnings reports would provide essential information, and as long as tech giants continue to exceed expectations and maintain strong fundamentals, the stocks should perform well.

Additionally, on January 16, Larry Adam, Raymond James CIO, appeared on CNBC’s ‘Power Lunch’ to discuss whether the rally in small cap stocks is here to stay. Adam stated that Raymond James is currently neutral on small-caps. He explained that for each of the last four years, the consensus has predicted a breakout for the sector based on earnings, yet in each of those years, earnings estimates were ultimately revised downward by more than 10%. Consequently, he maintains a neutral stance until the optimism surrounding their earnings translates into reality. He also clarified his sector-specific stances and stated he would be a buyer in the technology sector if a headline drove prices lower.

That being said, we’re here with a list of the 11 best small cap tech stocks to invest in now.

Our Methodology

We sifted through the Finviz stock screener to compile a list of small-cap, tech stocks that were trading between $300 million and $2 billion. We then selected 11 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q3 2025.

Note: All data was sourced on January 30. 

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).

11 Best Small Cap Tech Stocks to Invest In Now

11. Progress Software Corporation (NASDAQ:PRGS)

Number of Hedge Fund Holders: 25

Progress Software Corporation (NASDAQ:PRGS) is one of the best small cap tech stocks to invest in now. On January 16, as part of the firm’s 2026 infrastructure software outlook, Citi reduced its price target for Progress Software from $57 to $54 while maintaining a Buy rating. This adjustment came as the firm anticipates that the sector’s strong 2025 momentum will persist throughout the upcoming year.

Earlier on January 5, Jefferies lowered its price target for Progress Software from $50 to $45 while maintaining a Hold rating. This decision was made as the firm cited a cautious outlook for 2026. Jefferies anticipates the year will be characterized by gradual AI monetization and emphasized that significant growth acceleration is necessary to alleviate concerns regarding AI disintermediation.

As sector valuations align with historical averages, Jefferies advised investor patience and a more selective approach. However, the firm remains confident that long-term value will eventually accrue within the software layer.

Progress Software Corporation (NASDAQ:PRGS) provides software products that develop, deploy, and manage AI powered applications and digital experiences in the US and internationally.

10. MaxLinear Inc. (NASDAQ:MXL)

Number of Hedge Fund Holders: 26

MaxLinear Inc. (NASDAQ:MXL) is one of the best small cap tech stocks to invest in now. On January 29, MaxLinear reported a strong Q4 2025, with revenue reaching $136.4 million, which marked an 8% sequential increase and a 48% year-over-year rise. This was fueled by the infrastructure segment, which surged 76% annually due to high demand for optical interconnects and wireless infrastructure in data centers.

Looking ahead to 2026, MaxLinear Inc. (NASDAQ:MXL) expects its Keystone PAM4 DSP family to drive revenue between $100 million and $130 million as it ramps up at major hyperscale data centers. However, the company anticipates a softer H1 for its broadband business due to industry transitions to DOCSIS 4.0, which may lead to an overall annual decline in that specific segment. Despite supply chain tightness in the optical market and competitive pressures, leadership remains optimistic that infrastructure product mix improvements will push gross margins toward 60% by year-end.

Shortly after the company’s earnings report, on January 30, analyst Richard Shannon from Craig-Hallum reiterated a Buy rating on the stock with a price target of $27.

MaxLinear Inc. (NASDAQ:MXL) provides communications systems-on-chip solutions in the US, Asia, Europe, and internationally. It serves electronics distributors, module makers, OEMs, and original design manufacturers.