In this piece we will look at the 5 Best Small-Cap Growth Stocks to Invest In Now. Please visit 9 Best Small-Cap Growth Stocks to Invest In Now if you’d like to see an extended list and how we came up with the list of Best Small-Cap Growth Stocks to Invest In Now.
5. Vanda Pharmaceuticals Inc. (NASDAQ:VNDA)
Number of Hedge Fund Holders: 23
Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) is one of the Best Small-Cap Growth Stocks to Invest In Now. Recently, on June 4, H.C. Wainwright reiterated a Buy rating on Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) with a price target of $21.
The rating is based on an update through a Federal Register notice on the company’s regulatory situation. The company is seeking approval from the FDA for a drug called HETLIOZ as a treatment for jet lag. However, the FDA didn’t approve the drug initially. The company disagreed and asked for a formal hearing to argue its case. The FDA agreed to give them one. This is a big deal because this kind of hearing hasn’t happened for any drug in over 40 years.
The notice sets a pre-hearing conference for July 20, 2026, where the FDA will schedule a formal evidentiary public hearing regarding its proposal to refuse approval of Vanda’s supplemental application for HETLIOZ.
The hearing was granted by the FDA in March 2026, and H.C. Wainwright expects the actual hearing to occur before year-end. The analyst highlighted a key opportunity, noting that although generic tasimelteon already exists on the market, securing this new jet lag indication could let Vanda generate branded prescription sales largely insulated from generic competition.
Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) is a biopharmaceutical company focused on developing and selling therapies for unmet medical needs.
4. NET Power Inc. (NYSE:NPWR)
Number of Hedge Fund Holders: 23
NET Power Inc. (NYSE:NPWR) is one of the Best Small-Cap Growth Stocks to Invest In Now. On June 11, Barclays identified key gas power generation equipment companies that are expected to benefit from artificial intelligence infrastructure spending acceleration.
The firm projects that annual AI capital expenditure can surpass $1 trillion before 2028, which, in turn, is expected to drive demand for power generation capacity. The firm named NET Power Inc. (NYSE:NPWR) as one of the companies set to benefit from this increased spending on AI.
The company, on May 11, highlighted progress on its core development project while emphasizing a strategic pivot in how it generates power. Management noted that they are shifting from the company’s original proprietary technology to pairing it with Siemens gas turbines with post-combustion carbon capture technology. Entropy’s post-combustion carbon-capture technology has demonstrated an approximately 90% carbon-capture rate.
Notably, management highlighted that Project Permian Phase I remains on track and targets 80MW of output. A final investment decision is expected in the second half of 2026, with commercial operations targeted for early 2029. Moreover, the company has also hired a strategic advisor to help secure a long-term power purchase agreement.
NET Power Inc. (NYSE:NPWR) is an energy technology company in the United States.
3. Larimar Therapeutics, Inc. (NASDAQ:LRMR)
Number of Hedge Fund Holders: 31
Larimar Therapeutics, Inc. (NASDAQ:LRMR) is one of the Best Small-Cap Growth Stocks to Invest In Now. Recently, on June 19, Samantha Semenkow, an analyst from Citi, maintained a Buy rating on Larimar Therapeutics, Inc. (NASDAQ:LRMR), with a price target of $14.
The firm noted that the bullish sentiment is based on the company’s lead drug candidate, Nomlabofusp, which is being developed for Friedreich’s ataxia, a rare genetic disease. The analyst highlighted several upcoming catalysts, including new open-label clinical data and a planned rolling submission to the FDA by June 2026. (Larimar has now submitted the first module of its rolling BLA seeking accelerated approval for nomlabofusp).
The analyst believes that the drug can help achieve a carrier-like state, where symptoms become minimal or non-existent. Moreover, the firm also expects expanded data covering patients treated for a full year to show continued improvement on key functional measures, while maintaining good safety results.
Larimar Therapeutics, Inc. (NASDAQ:LRMR) develops treatments for rare diseases using its cell-penetrating peptide technology platform.
2. Verastem, Inc. (NASDAQ:VSTM)
Number of Hedge Fund Holders: 38
Verastem, Inc. (NASDAQ:VSTM) is one of the Best Small-Cap Growth Stocks to Invest In Now. Recently, on June 24, RBC Capital reiterated an Outperform rating on Verastem, Inc. (NASDAQ:VSTM) with a $15 price target. The firm noted that the bullish sentiment is based on the company’s G12D inhibitor drug program.
The firm noted that the G12D inhibitor program targets a specific genetic mutation found in certain cancers, and this is an important area of competitive drug development. The firm noted that they remain reassured on the drug’s efficacy and expect the results seen in patients outside the US to reasonably translate to US patients across the drug’s major target indications.
In terms of the safety profile, the firm sees some room for improvement, but overall sees the drug as market competitive. The update was based on early, preliminary Phase 1/2 data and safety data rather than full efficacy results. RBC expects a more complete data readout with longer patient follow-up in the second half of 2026.
Verastem Inc. (NASDAQ:VSTM) is a biopharmaceutical company that develops and commercializes new medicines to improve the lives of patients diagnosed with RAS/MAPK pathway-driven cancers.
1. Compass Therapeutics, Inc. (NASDAQ:CMPX)
Number of Hedge Fund Holders: 44
Compass Therapeutics, Inc. (NASDAQ:CMPX) is one of the Best Small-Cap Growth Stocks to Invest In Now. Recently, on June 4, Citizens reiterated a Market Outperform rating on the stock with a price target of $10. The rating comes after the company presented new clinical data at the ASCO conference.
The data was regarding the company’s CTX-8371, which is a bispecific antibody that targets both PD-1 and PD-L1. PD-1 and PD-L1 are two related immune checkpoint proteins commonly targeted in cancer immunotherapy. The data showed that CTX-8371 showed early signs of activity in heavily pretreated patients across three difficult cancer types, including non-small cell lung cancer, triple-negative breast cancer, and classical Hodgkin lymphoma.
Looking ahead, several catalysts are expected for the stock. For instance, the company plans to meet with the FDA in August to discuss a path toward approval for a separate drug, Tovecimig. Additionally, updated CTX-8371 data and initial results from another candidate, CTX-10726, are both expected later in 2026.
Compass Therapeutics, Inc. (NASDAQ:CMPX) is a clinical-stage biotechnology company developing antibody-based treatments for cancer.
While we acknowledge the potential of CMPX 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 CMPX and that has 100x upside potential, check out our report about the cheapest AI stock.
READ NEXT: 10 Good Stocks to Invest in Now and 10 Most Undervalued US Stocks According to Hedge Funds.
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