In ths article, we will look at the 12 Small Cap Stocks to Buy with Huge Upside Potential.
On December 17, Lale Akoner, Global Market Analyst at eToro, appeared on CNBC to talk about the market rotation trend shifting from mega-cap tech toward small caps, cyclicals, and financials.
Talking about rotation in the market, she expects the trend to continue for a while, with the capital basically moving from the high multiple mega cap winners towards small caps, cyclicals, and the international markets. According to her, this trend will continue given the fact that the monetray policy will stay easy coming from the Fed with “the end of the quantitative tightening” and the Fed rate cuts. She also stated that the fiscal policy will be felt more strongly in the US economy in the next few quarters.
READ ALSO: 11 Most Profitable NYSE Stocks to Buy Right Now and 15 Best Long-Term Penny Stocks to Invest In.
Akoner further reasoned that she likes downcap because they are still undervalued, especially in a backdrop where the Fed rate cuts are coming into the picture. Small caps, in general, tend to outperform when we are further into the rate cutting cycle. Another reason supporting this outlook is the fiscal policy and the new tax bill helping R&D intensive small caps particularly, who are able to expand their R&D expenses. Both these factors prove highly positive for small caps, according to her.
With these trends in view, let’s look at the best small cap stocks to buy with huge upside potential.
Our Methodology
We used stock screeners to make a list of small cap stocks that analysts were bullish on and selected the top 12 stocks with the highest analyst upside potential, as of December 18, and number of hedge fund holders, as of Q3 2025. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of hedge fund holders.
Note: All data was recorded on December 18.
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).
12 Small Cap Stocks to Buy with Huge Upside Potential
12. UP Fintech Holding Ltd. (NASDAQ:TIGR)
Analyst Upside: 72.79%
Market Cap: $1.54 billion
Number of Hedge Fund Holders: 18
UP Fintech Holding Ltd. (NASDAQ:TIGR) is one of the best small cap stocks to buy with huge upside potential. Goldman Sachs lifted the price target on UP Fintech Holding Ltd. (NASDAQ:TIGR) to $4.73 from $4.15 on December 5, but maintained a Sell rating on the stock.
The firm told investors that while UP Fintech Holding Ltd. (NASDAQ:TIGR) reported a net profit and revenue beat in fiscal Q3, which was primarily attributed to higher-than-anticipated assets under management per paying client, it is reaffirming a cautious outlook on the stock’s earnings outlook for several reasons. These include more expected rate cuts by the Fed in the future, continual slowing in client acquisition, higher volatility in the US market, and the recent downturn in the Hong Kong market.
The same day, Citi also lifted the price target on UP Fintech Holding Ltd. (NASDAQ:TIGR) to $17.50 from $17.40, maintaining a Buy rating on the stock and telling investors that the company reported “strong” fiscal Q3 results.
The rating updates came after UP Fintech Holding Ltd. (NASDAQ:TIGR) announced on December 4 its unaudited financial results for fiscal Q3 2025, reporting a 73.3% year-over-year and 26.3% quarter-over-quarter growth in total revenues to $175.2 million. The company sustained a high ARPU by prioritizing product diversification and user quality, which resulted in both its GAAP and non-GAAP net income delivering strong growth. Net income attributable to its ordinary shareholders was $53.8 million, up 29.9% quarter-over-quarter and approximately three times that of the same quarter last year.
UP Fintech Holding Ltd. (NASDAQ:TIGR) is an online brokerage firm with a focus on global investors. The company offers an online trading platform allowing investors to trade in equities and other financial instruments on several exchanges across the globe.
11. Vericel Corporation (NASDAQ:VCEL)
Analyst Upside: 53.33%
Market Cap: $1.84 billion
Number of Hedge Fund Holders: 18
Vericel Corporation (NASDAQ:VCEL) is one of the best small cap stocks to buy with huge upside potential. Truist analyst Richard Newitter slashed the price target on Vericel Corporation (NASDAQ:VCEL) to $45 from $50 on December 18, reaffirming a Buy rating on the stock as part of a broader research note previewing the coming year for the MedTech sector. Similarly, on December 16, Canaccord Genuity reaffirmed a Buy rating on Vericel Corporation (NASDAQ:VCEL) and set a $58 price target.
In its fiscal Q3 2025 results, Vericel Corporation (NASDAQ:VCEL) reported that the total net revenue for the quarter rose to $67.5 million compared to $57.9 million in the prior year period, while total net product revenue included $55.7 million of MACI (autologous cultured chondrocytes on porcine collagen membrane) net revenue compared to $44.7 million in the prior year period, and $10.4 million of Epicel (cultured epidermal autografts) net revenue compared to $44.7 million. It also included $1.5 million of NexoBrid (anacaulase-bcdb) net revenue, down from $1.1 million in fiscal Q3 2024.
Vericel Corporation (NASDAQ:VCEL) further reported that the total operating expenses for the quarter rose to $46.1 million compared to $44.1 million for the same period in 2024, with the increase primarily attributed to the rise in headcount and related employee expenses, along with additional costs related to the company’s new Burlington facility, including depreciation and MACI tech transfer activities.
Vericel Corporation (NASDAQ:VCEL) has a total full-year revenue guidance of $272 to $276 million, and reaffirmed its MACI full-year revenue growth in the low 20% range, or $237.5 to $239.5 million. The company also reaffirmed full-year profitability guidance of 74% gross margin and adjusted EBITDA margin of 26%.
Vericel Corporation (NASDAQ:VCEL) is involved in product development, research, manufacturing, and distribution of patient-specific, expanded cellular therapies that help treat diseases. The company’s product portfolio includes Epicel and MACI. Epicel covers skin replacement for patients with deep dermal or full-thickness burns, while the MACI portfolio is FDA-approved for the process of tissue engineering for cell growth on scaffolds using healthy cartilage tissue derived from the patient’s own knee.
