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.
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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.
10. Innoviva, Inc. (NASDAQ:INVA)
Analyst Upside: 63.77%
Market Cap: $1.50 billion
Number of Hedge Fund Holders: 23
Innoviva, Inc. (NASDAQ:INVA) is one of the best small cap stocks to buy with huge upside potential. Innoviva, Inc. (NASDAQ:INVA) received a rating update from H.C. Wainwright on December 16, who lifted the price target to $46 from $45 while keeping a Buy rating on the stock.
The rating update came after Innoviva, Inc. (NASDAQ:INVA) reported the FDA approval of NUZOLVENCE® (zoliflodacin) on December 12, with the firm telling investors that zoliflodacin’s approval came on schedule. Zoliflodacin is a first-in-class, single-dose, oral antibiotic to treat uncomplicated urogenital gonorrhea in adults and pediatric patients 12 years and older weighing at least 35 kg.
NUZOLVENCE’s development was a part of a not-for-profit, private collaboration with the The Global Antibiotic Research and Development Partnership (GARDP), which led and sponsored the Phase 3 clinical trial.
Innoviva, Inc. (NASDAQ:INVA) reported that the FDA approval was based on the results from this Phase 3 clinical trial, which was the largest ever conducted for a new treatment against Neisseria gonorrhoeae infection in regions with a high prevalence of gonorrhea across five countries. The approval makes NUZOLVENCE one of the first new FDA-approved treatments for the condition in nearly two decades.
Innoviva, Inc. (NASDAQ:INVA) is involved in the development, commercialization, and financial management of biopharmaceuticals.
9. Progress Software Corporation (NASDAQ:PRGS)
Analyst Upside: 66.70%
Market Cap: $1.87 billion
Number of Hedge Fund Holders: 25
Progress Software Corporation (NASDAQ:PRGS) is one of the best small cap stocks to buy with huge upside potential. Progress Software Corporation (NASDAQ:PRGS) announced on December 16 its debut in The Forrester Wave™: Digital Experience Platforms, Q4 2025, as one of the included nine vendors. Management reported that the inclusion reflects the company’s growing influence in the digital experience platform (DXP) market, along with its commitment to deliver scalable, secure, dynamically generated, and personalized digital experiences through trusted AI. The Forrester report stated that:
“Progress is an ideal fit for midsize, multibrand organizations that manage dozens of microsites and portals for different audiences, such as banks, governments, manufacturers, and event producers.”
It further noted that “customers praise Progress for its ease of use, low-code flexibility, and ability to support multisite management and personalization across complex digital estates,” and that the company “made quick work of integrating its Nuclia acquisition into its platform, resulting in an excellent search capability.”
Powered by Progress® Agentic RAG, Progress Software Corporation (NASDAQ:PRGS) earned the highest possible score (5.0) in the Search criterion.
In another development, Progress Software Corporation (NASDAQ:PRGS) announced on December 10 the Q4 2025 release of its leading developer toolsets Progress® Telerik® and Progress® Kendo UI®, with the release introducing Agentic AI as an active development partner via a Progress Agentic UI Generator. It also includes a robust set of new AI-driven features, which help organizations improve application quality, cut down development costs, and expedite time-to-market.
Progress Software Corporation (NASDAQ:PRGS) provides products and solutions that develop and deploy mission-critical business applications, including Chef, Corticon, DataDirect, Developer Tools, Flowmon, Kemp LoadMaster, MarkLogic, MOVEit, OpenEdge, Semaphore, and more.
8. Celldex Therapeutics, Inc. (NASDAQ:CLDX)
Analyst Upside: 107.68%
Market Cap: $1.71 billion
Number of Hedge Fund Holders: 29
Celldex Therapeutics, Inc. (NASDAQ:CLDX) is one of the best small cap stocks to buy with huge upside potential. Barclays lifted the price target on Celldex Therapeutics, Inc. (NASDAQ:CLDX) to $24 from $21 on December 17 and reaffirmed an Equal Weight rating on the stock. The firm told investors that it adjusted the price targets in the biotechnology space to take into account its 2026 outlook.
In a separate development, Celldex Therapeutics, Inc. (NASDAQ:CLDX) announced on December 9 that it initiated the global Phase 3 trial (EMBARQ-ColdU and SD) designed to evaluate the efficacy and safety of barzolvolimab in adult patients with cold urticaria (ColdU) and symptomatic dermographism (SD) who remain symptomatic despite H1 antihistamine treatment. Barzolvolimab is a humanized monoclonal antibody.
ColdU and SD are characterized by the presence of wheals or hives with an attributable associated trigger: rubbing/scratching the skin in SD and exposure to cold temperatures in ColdU. Management stated that advanced approved therapies to treat SD and ColdU do not exist, making barzolvolimab the only drug in development that exhibits clinical benefit in patients living with the conditions in a randomized, large, placebo-controlled study, with all primary and secondary endpoints met with high statistical significance at 12 weeks and sustained through end of treatment period (20 weeks) in Phase 2 study.
Management further reported that the initiation of the EMBARQ-ColdU and SD marks the second barzolvolimab Phase 3 program, with Phase 3 in CSU ongoing.
Celldex Therapeutics, Inc. (NASDAQ:CLDX) develops, manufactures, and commercializes novel therapeutics for human health care. The company’s pipeline includes Varlilumab, CDX-1140, CDX-301, and CDX-3379.
7. Pharvaris N.V. (NASDAQ:PHVS)
Analyst Upside: 75.83%
Market Cap: $1.54 billion
Number of Hedge Fund Holders: 30
Pharvaris N.V. (NASDAQ:PHVS) is one of the best small cap stocks to buy with huge upside potential. Morgan Stanley analyst Maxwell Skor reiterated a Buy rating on Pharvaris N.V. (NASDAQ:PHVS) on December 15, setting a $41 price target. Pharvaris N.V. (NASDAQ:PHVS) also received a rating update from Oppenheimer on December 4, with the company reaffirming an Outperform rating on the stock and lifting the price target to $50 from $44.
The firm told investors that the company reported positive top-line results for the pivotal RAPIDe-3 study confirming potential of deucrictibant for on-demand treatment of HAE attacks. Pharvaris N.V. (NASDAQ:PHVS) reported the results on December 3, stating that the study met the primary endpoint, with the median time to onset of symptom relief attained in 1.28 hours, significantly faster versus placebo.
In addition, all secondary efficacy endpoints were met, including End of Progression (median 17.47 minutes) and complete symptom resolution (median 11.95 hours). The results confirmed the well-tolerated safety profile of deucrictibant, with efficacy and safety outcomes consistent across all HAE subtypes represented (HAE type 1, HAE type 2, and HAE with normal C1 inhibitor) and varying attack severities and locations.
Pharvaris N.V. (NASDAQ:PHVS) further reported that data from the pivotal Phase 3 would be used as the basis for marketing authorization applications, which the company plans to start filing in H1 2026.
Pharvaris N.V. (NASDAQ:PHVS) is a clinical-stage company that develops and commercializes innovative therapies for rare diseases, with a focus on angioedema and other bradykinin-mediated diseases.
6. Enovis Corporation (NYSE:ENOV)
Analyst Upside: 72.73%
Market Cap: $1.56 billion
Number of Hedge Fund Holders: 31
Enovis Corporation (NYSE:ENOV) is one of the best small cap stocks to buy with huge upside potential. Canaccord Genuity slashed the price target on Enovis Corporation (NYSE:ENOV) to $50 from $58 on December 17 and maintained a Buy rating on the stock. The firm updated its model on the company to take into account its new 2027 estimates, with some updates to its 2026 estimates as well.
In addition, Enovis Corporation (NYSE:ENOV) was initiated with a Buy rating by Freedom Capital analyst Keith Hinton on December 16, who set a $45 price target on the stock. The analyst told investors that the orthopedics-focused medtech company is undergoing a rebound in organic growth in 2025, and the momentum is expected to continue.
He views the company’s improving competitive positioning to be “underappreciated”, with shares trading near their post-spin lows and reducing M&A dyssynergies diminishing. Hinton anticipates the multiple to begin bridging the gap with peers, provided the new CEO continues execution.
Separately, in its fiscal Q3 2025 results, Enovis Corporation (NYSE:ENOV) reported that its net sales for the quarter rose 9% on a reported basis and 7% on an organic basis to $549 million compared to the same quarter last year, with the quarterly results reflecting stable end markets, encouraging momentum in new product introductions, and continued execution in P&R and Recon. Net sales in Recon rose 2% on a reported basis and 9% on an organic basis compared to the prior year period, and P&R grew 6% on a reported basis and 4% on an organic basis.
Enovis Corporation (NYSE:ENOV) is a medical technology growth company that develops clinically differentiated solutions to transform workflows and generate better patient outcomes. The company operates through the Prevention & Recovery and Reconstructive segments.
5. Vital Farms, Inc. (NASDAQ:VITL)
Analyst Upside: 52.91%
Market Cap: $1.47 billion
Number of Hedge Fund Holders: 33
Vital Farms, Inc. (NASDAQ:VITL) is one of the best small cap stocks to buy with huge upside potential. On December 18, TD Cowen analyst Robert Moskow slashed the price target on Vital Farms, Inc. (NASDAQ:VITL) to $44 from $59 while reiterating a Buy rating on the stock.
The firm told investors that it attended the company’s investor day, where Vital Farms, Inc. (NASDAQ:VITL) established an aggressive $2 billion sales target for 2030, supported by unlocking of capacity constraints, rising brand awareness, growing household penetration, and expansion of shelf space. However, the firm added that the company’s 2025 guidance cut added to market concerns regarding susceptibility to an increasingly price sensitive consumer and crowded premium egg category.
In another development, Morgan Stanley cut the price target on Vital Farms, Inc. (NASDAQ:VITL) to $45 from $48 on December 17, and maintained an Overweight rating on the stock. The firm told investors that Vital Farms, Inc. (NASDAQ:VITL) updated its long-term algorithm with above-consensus targets at its investor day. However, this was overshadowed according to the analyst, and the previous day’s stock reaction was driven by an “unexpected” 2025 revenue guidance cut. Still, the firm sees the event as providing additional visibility into “a long, underappreciated growth runway.”
The rating updates came after Vital Farms, Inc. (NASDAQ:VITL) announced on December 16 that it updated its long-term financial targets, and expects a multi-year path toward a net revenue of $2 billion by 2030, and 15% to 17% adjusted EBITDA margins by 2030. In addition, the company expects gross margins of 35+% between 2025 and 2030 as it continually drives expands household penetration and brand loyalty, increases brand awareness, continues scaling of its supply chain, and deepens distribution, establishing 2030 as its new long-term planning horizon.
Vital Farms, Inc. (NASDAQ:VITL) packages, markets, and distributes pasture-raised butter, shell eggs, and other products. It sells its products primarily to retail food service channels under the trade names Vital Farms, Alfresco Farms, Lucky Ladies, and RedHill Farms.
4. Five9, Inc. (NASDAQ:FIVN)
Analyst Upside: 63.55%
Market Cap: $1.65 billion
Number of Hedge Fund Holders: 36
Five9, Inc. (NASDAQ:FIVN) is one of the best small cap stocks to buy with huge upside potential. Five9, Inc. (NASDAQ:FIVN) announced on December 17 the appointment of Amit Mathradas as the company’s Chief Executive Officer and a director, effective February 2, 2026. Mr. Mathradas would take on the role from Board Chairman Mike Burkland, who would continue to serve on the Board and work with Mr. Mathradas to allow a smooth transition. Mike Burkland’s decision to retire from the CEO position was announced by management in July.
The same day, Five9, Inc. (NASDAQ:FIVN) received a rating update from William Blair analyst Arjun Bhatia, who reaffirmed a Buy rating on the stock. Wells Fargo analyst Ryan MacWilliams also released a rating update for the stock on December 16, maintaining a Hold rating with a $22 price target.
Separately, Five9, Inc. (NASDAQ:FIVN) reported an 8% growth in its revenue for fiscal Q3 2025, reaching a record $285.8 million, compared to $264.2 million for the same quarter last year. Its Enterprise AI revenue rose 41% year-over-year, and profitability increased with adjusted EBITDA margin reaching a record 25%.
For the full year 2025, the company expects to report revenue in the $1.1435 to $1.1495 billion range, and GAAP net income per share in the range of $0.36 to $0.43, assuming diluted shares outstanding of around 88.0 million.
Five9, Inc. (NASDAQ:FIVN) provides cloud software for contact centers, specializing in omnichannel routing, workforce organization, analytics, and reporting.
3. Nurix Therapeutics, Inc. (NASDAQ:NRIX)
Analyst Upside: 64.74%
Market Cap: $1.84 billion
Number of Hedge Fund Holders: 40
Nurix Therapeutics, Inc. (NASDAQ:NRIX) is one of the best small cap stocks to buy with huge upside potential. On December 16, Wells Fargo analyst Derek Archila reaffirmed a Buy rating on Nurix Therapeutics, Inc. (NASDAQ:NRIX) with a $30 price target.
In a separate development, Nurix Therapeutics, Inc. (NASDAQ:NRIX) announced on December 8 new clinical data from patients with relapsed or refractory Waldenström macroglobulinemia (WM) treated in the Phase 1 clinical trial of its Bruton’s tyrosine kinase (BTK) degrader bexobrutideg (NX-5948). Management reported an objective response rate (ORR) of 75.0%, including three very good partial responses (VGPR) in heavily pre-treated Waldenström macroglobulinemia patients.
Nurix Therapeutics, Inc. (NASDAQ:NRIX) added that the median duration of response (DOR) and median progression-free survival (PFS) have not been reached, with a median follow up of 8.1 months. However, favorable tolerability and encouraging efficacy support the continued development of bexobrutideg in Waldenström macroglobulinemia, as it was well tolerated in patients with WM.
Furthermore, adverse events were “predominantly low grade”, with the most common being thrombocytopenia (19.4%), neutropenia (29.0%), petechiae (29.0%), diarrhea (25.8%), anemia (22.6%), and purpura/contusion (22.6%). No dose limiting toxicities were observed, along with no grade 5 AEs.
Nurix Therapeutics, Inc. (NASDAQ:NRIX) is a clinical-stage biopharmaceutical company that discovers, develops, and commercializes innovative small molecules and antibody therapies as a novel treatment approach for inflammatory conditions, cancer, and other challenging diseases.
2. BioCryst Pharmaceuticals Inc. (NASDAQ:BCRX)
Analyst Upside: 168.60%
Market Cap: $1.50 billion
Number of Hedge Fund Holders: 47
BioCryst Pharmaceuticals Inc. (NASDAQ:BCRX) is one of the best small cap stocks to buy with huge upside potential. H.C. Wainwright lifted the price target on BioCryst Pharmaceuticals Inc. (NASDAQ:BCRX) to $32 from $30 on December 15, and reaffirmed a Buy rating on the stock. The firm told investors that the approval of Orladeyo in the pediatric patient population marks a significant factor for the rating update, as Orladeyo is the first and only targeted oral prophylactic therapy approved for use in patients ages two to 12 with hereditary angioedema.
BioCryst Pharmaceuticals Inc. (NASDAQ:BCRX) announced on December 12 that the FDA approved its New Drug Application (NDA) for the use of an oral pellet formulation of once-daily ORLADEYO (berotralstat) for prophylactic therapy in pediatric patients with hereditary angioedema aged 2 to <12 years. The only targeted treatment options for patients under age 12, until now, were administered either intravenously or through subcutaneous injection, which could prove burdensome for younger patients and their caregivers.
Management further reported that the FDA granted approval to a capsule formulation of ORLADEYO for prophylaxis for the prevention of HAE attacks in adult and pediatric patients 12 years and older in December 2020, which now holds approval in over 45 countries across the globe.
BioCryst Pharmaceuticals Inc. (NASDAQ:BCRX) is a biotechnology company that provides structure-guided drug design to develop oral small-molecule and protein therapeutics to target difficult-to-treat rare diseases.
1. UniQure (NASDAQ:QURE)
Analyst Upside: 123.16%
Market Cap: $1.42 billion
Number of Hedge Fund Holders:
UniQure (NASDAQ:QURE) is one of the best small cap stocks to buy with huge upside potential. Stifel slashed the price target on UniQure (NASDAQ:QURE) to $40 from $50 on December 11, keeping a Buy rating on the stock and stating that it “refreshed diligence” on several companies under its coverage in the biotechnology sector. The firm added that it made several estimate, model, and price target changes for a 2026 look ahead note for the sector.
UniQure (NASDAQ:QURE) also received a rating update from Mizuho analyst Uy Ear on December 8, who lowered the price target to $33 from $60 while keeping an Outperform rating on the stock. The firm cited the lowering of its view of the company’s probability of success and expected launch year for AMT-130 by one year.
This followed UniQure’s (NASDAQ:QURE) announcement on December 4 that it received the final meeting minutes from the FDA regarding the pre-Biologics License Application (BLA) meeting that was held on October 29 to discuss the application for AMT-130. AMT-130 is an investigational gene therapy for Huntington’s disease (HD).
Management reported that the FDA conveyed in the final meeting minutes that the submitted data from the Phase I/II studies of AMT-130 was currently unlikely to offer the primary evidence that could support a BLA submission. UniQure (NASDAQ:QURE) stated that it is evaluating the feedback carefully, and has plans to urgently request a follow-up meeting with the FDA for fiscal Q1 2026.
UniQure (NASDAQ:QURE) discovers, develops, and commercializes innovative gene therapies, with its discoveries focused on treating Huntington’s disease, glybera, hemophilia, and cardiovascular problems.
While we acknowledge the potential of QURE 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 QURE and that has 100x upside potential, check out our report about this cheapest AI stock.
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