In this article, we will look at the 12 Best Small Cap Tech Stocks to Buy According to Hedge Funds.
Andrew Slimmon of Morgan Stanley Investment Management appeared on CNBC to talk about the recent market action and whether the rally points to a warning.
He was of the opinion that every time he hears someone say that the breadth is bad, it is misleading because maybe the big stocks are showing the best fundamentals, and if they are, then they should be rewarded. Therefore, he is not very worried. What he is more worried about right now is that what has really led since the end of the first quarter is the real speculative stocks, and they are on a tear. That is a warning sign to him that the market is vulnerable to bad news that comes along when the leadership is in the very, very speculative names.
READ ALSO: 10 Best Commodity Stocks to Buy for the Supercycle AND 12 Best Medical Stocks to Invest In According to Billionaires.
Evans further stated that the bull markets die on euphoria, there are not enough indications of that, and that consumer sentiment is continuing to stay woefully depressed. In addition, while tech valuations remain reasonably priced, they are not euphoric.
With these broader market trends in view, let’s look at the best small cap tech stocks to buy according to hedge funds.
Our Methodology
We used the Finviz stock screener to identify the best small-cap tech stocks and selected the top 12 stocks most popular among hedge funds as of Q4 2025, using the hedge fund sentiment data from Insider Monkey’s database. The stocks are arranged in ascending order of hedge fund sentiment.
Note: All data was recorded on May 25.
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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
12 Best Small Cap Tech Stocks to Buy According to Hedge Funds
12. EverCommerce Inc. (NASDAQ:EVCM)
Number of Hedge Fund Holders: 9
EverCommerce Inc. (NASDAQ:EVCM) is one of the best small cap tech stocks to buy according to hedge funds. Canaccord lifted the price target on EverCommerce Inc. (NASDAQ:EVCM) to $13 from $12 on May 11, maintaining a Buy rating on the shares. The firm updated its model on the stock after its fiscal results, which were, although modestly ahead of guidance on the headline numbers, failed to fully address more fundamental questions about the trajectory of the underlying business.
In its financial results for fiscal Q1 2026, EverCommerce Inc. (NASDAQ:EVCM) reported $147.5 million in revenue from continuing operations, reflecting an increase of 3.6% compared to $142.3 million for the quarter ended March 31, 2025. Pro forma revenue rose 3.0% to $147.5 million, compared to $143.2 million for the quarter ended March 31, 2025. Management further reported that subscription and transaction fees revenue from continuing operations was $142.1 million, up 3.1% compared to $137.8 million for the quarter ended March 31, 2025.
EverCommerce Inc. (NASDAQ:EVCM) provides integrated, vertically-tailored software-as-a-service solutions for service-based small and medium-sized businesses. The company’s operations are divided into the United States and International geographical segments.
11. Ambiq Micro, Inc. (NYSE:AMBQ)
Number of Hedge Fund Holders: 15
Ambiq Micro, Inc. (NYSE:AMBQ) is one of the best small cap tech stocks to buy according to hedge funds. Ambiq Micro, Inc. (NYSE:AMBQ) received rating updates from UBS and Northland on May 13 following the release of financial results for its fiscal Q1 2026 earnings. UBS lifted the price target on the stock to $70 from $43, maintaining a Neutral rating on the shares and telling investors in a research note that growth inflections with Atomiq are still ahead.
Northland also lifted the price target on Ambiq Micro, Inc. (NYSE:AMBQ) to $72 from $44 on May 13, reiterating an Outperform rating on the stock after the company reported that its EPS beat consensus, driven primarily by revenue upside. It further stated that Ambiq Micro, Inc. (NYSE:AMBQ) is seeing solid demand for its low-power products across the wearable space and other end markets, and the firm believes that AI-enabled wearables are “in the first inning of growth.”
Ambiq Micro, Inc. (NYSE:AMBQ) provides ultra-low power semiconductor solutions that address the significant power consumption challenges of general-purpose and AI computing. The company’s operations are divided into the following geographical segments: China, Taiwan, Singapore, and the rest of the World.
10. Bandwidth Inc. (NASDAQ:BAND)
Number of Hedge Fund Holders: 15
Bandwidth Inc. (NASDAQ:BAND) is one of the best small cap tech stocks to buy according to hedge funds. Needham lifted the price target on Bandwidth Inc. (NASDAQ:BAND) to $60 from $45 on May 14, maintaining a Buy rating on the shares. The rating update came after the firm hosted the company at the 21st annual Needham Technology & Media Conference for a fireside chat with CEO David Morken and CFO Daryl Raiford. The firm stated that key topics of conversations included the considerable competitive advantage provided by the company’s owned network, Agentforce contact center opportunity, and how the second half of the year volumes can provide upside to current guidance, as well as how voice AI can drive outsized growth going forward.
Bandwidth Inc. (NASDAQ:BAND) also received a rating update from Citizens on May 15, with the firm lifting the price target on the stock to $70 from $45. It maintained an Outperform rating on the shares, stating that the company’s management struck a highly positive tone on business trends.
Bandwidth Inc. (NASDAQ:BAND) provides cloud communications software services and is also involved in delivering experiences through text messaging, voice calling, and emergency services applications.
9. Arteris, Inc. (NASDAQ:AIP)
Number of Hedge Fund Holders: 22
Arteris, Inc. (NASDAQ:AIP) is one of the best small cap tech stocks to buy according to hedge funds. Arteris, Inc. (NASDAQ:AIP) received several rating updates from analysts following the release of its financial results for fiscal Q1. Northland lifted the price target on the stock to $38 from $24 on May 13, maintaining an Outperform rating on the shares after the company reported fiscal Q1 EPS ahead of consensus and guided above consensus. The firm told investors that the need for fast movement of data in AI chips is moving earnings up.
Arteris, Inc. (NASDAQ:AIP) also received a rating update from Jefferies the same day. The firm lifted the price target on the stock to $35 from $16, reiterating a Hold rating on the shares. It told investors in a research note that the company reported a “beat-and-raise” quarter as demand accelerates from AI-related activity. The firm further added that Arteris, Inc.’s (NASDAQ:AIP) royalty trends improved meaningfully, which was supported by greater exposure to data centers. However, Jefferies stated that it awaits better clarity on the company’s profitability after the step-up in spending before recommending the shares.
Arteris, Inc. (NASDAQ:AIP) provides interconnect and other intellectual property technology. The company’s products include Coherent NoC IP, Non-Coherent NoC IP, Last-level Cache IP, and IP Development Technology.
8. Alkami Technology, Inc. (NASDAQ:ALKT)
Number of Hedge Fund Holders: 25
Alkami Technology, Inc. (NASDAQ:ALKT) is one of the best small cap tech stocks to buy according to hedge funds. Alkami Technology, Inc. (NASDAQ:ALKT) announced on May 19 a new partnership between MANTL and FVSBank through which MANTL will help FVSBank in modernizing its deposit account opening process. MANTL is an Alkami solution team and a provider of loan and deposit account opening technology, while FVSBank is a mutual bank headquartered in Fond du Lac, Wisconsin. The partnership will help improve customer and employee experiences, accelerate deposit growth, and streamline operations across the institution.
Alkami Technology, Inc. (NASDAQ:ALKT) further reported that through MANTL, FVSBank will be able to automate over 85% of application decisions, which include Anti-Money Laundering, Know Your Customer, and Bank Secrecy Act, along with product setup, funding, and core booking. This would help elevate operational efficiency and reduce manual intervention.
In a separate development, Alkami Technology, Inc. (NASDAQ:ALKT) announced a partnership between MANTL and Sturgis Bank, a community bank serving Michigan, through which Sturgis Bank will modernize onboarding across all physical and digital banking channels.
Alkami Technology, Inc. (NASDAQ:ALKT) provides digital banking software solutions to banks, credit unions, credit union service organizations, and service bureaus.
7. Flywire Corporation (NASDAQ:FLYW)
Number of Hedge Fund Holders: 32
Flywire Corporation (NASDAQ:FLYW) is one of the best small cap tech stocks to buy according to hedge funds. JPMorgan upgraded Flywire Corporation (NASDAQ:FLYW) to Neutral from Underweight on May 21, lifting the price target on the company to $16 from $14. It told investors in a research note that the company’s execution on re-mixing the business makes it less vulnerable to negative earnings revision risk. The firm also believes that Flywire Corporation (NASDAQ:FLYW) has reset expectations, creating “far less” downside risk relative to a year ago with upside potential from its recent deals and pipeline. It added that the travel trends remain positive, with no notable impact from the Middle East conflict.
Flywire Corporation (NASDAQ:FLYW) also received a rating update from Truist on May 19. The firm lifted the price target on the stock to $18 from $16 and maintained a Buy rating on the shares. It told investors in a research note that after the company’s 9% point organic revenue beat and corresponding guidance raise, the firm is raising its top-line estimates by 2-3 points to take into account stronger trends in the education and travel verticals.
Flywire Corporation (NASDAQ:FLYW) is a payments enablement and software company that combines its global payments network, payments platform, and vertical-specific software to deliver important and complex payments for its clients and their customers.
6. Globant S.A. (NYSE:GLOB)
Number of Hedge Fund Holders: 33
Globant S.A. (NYSE:GLOB) is one of the best small cap tech stocks to buy according to hedge funds. Globant S.A. (NYSE:GLOB) announced on May 21 a strategic partnership with Cascadience LLC, which is a not-for-profit technology company that creates inclusive digital solutions for individuals with disabilities, and Viability, a not-for-profit organization that provides community-based human services across five US states. The partnership aims at developing a suite of AI-first digital platforms extending “Viability’s proven support model into the digital space, amplifying user agency while expanding access and opportunity through human-centered technology”.
Globant S.A. (NYSE:GLOB) further reported that through the collaboration, the company is providing end-to-end product development expertise, which includes data integration, AI architecture design, user experience development, and accessibility engineering. Globant S.A. (NYSE:GLOB) is developing the “digital backbone” through adaptive support features, intelligent task orchestration, and secure data management.
In a separate development, Wedbush cut the price target on Globant S.A. (NYSE:GLOB) to $54 from $61 on May 18, maintaining an Outperform rating on the shares.
Globant S.A. (NYSE:GLOB) provides information technology services, including application development, application maintenance, testing, and infrastructure management.
While we acknowledge the potential of GLOB 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 GLOB and that has 100x upside potential, check out our report about the cheapest AI stock.
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