We recently published a list of 10 Stocks Under $10 that Will Triple. In this article, we are going to take a look at where Relay Therapeutics, Inc. (NASDAQ:RLAY) stands against other stocks under $10 that will triple.
As we delve into the discussion on stocks that will triple, we must shed light on the U.S. small-cap stocks, which are struggling amid broader market challenges due to ongoing shifts in tariff policy, affecting investors’ confidence. The Russell index (which tracks small-cap stocks) has fallen over 15% from its peak in November 2024 as of the time of writing this article and is down by nearly 19% on a YTD basis. However, the broader market, mostly consisting of large-cap stocks, has only dropped about 14% on a YTD basis. This gap shows how economic uncertainties and higher interest rates have more impact on smaller companies as they typically carry more debt and feel borrowing costs more acutely.
Furthermore, trade tensions have added to small-cap stocks’ volatility. Reuters reported that Trump’s new 25% tariffs on Canadian, Mexican, and Chinese imports rolled out on March 4, with more duties to be imposed by April 2. This measure affects nearly $2.2 trillion in trade and has sparked retaliatory tariffs from Canada and China, which have stoked inflation fears and triggered global market drops. As such, small-cap companies with international supply chains now face higher costs that could damage their profitability.
Yet, small-cap stocks might bounce back as Trump’s domestic economic growth agenda could benefit these U.S.-based companies. In addition, onshoring and increased capital expenditures (CAPEX) might boost the sector’s earnings. Furthermore, analysts believe that stabilizing inflation and easing interest rates could help small-caps recover in the second half of 2025.
As such, inflation seems to be leveling off, which is beneficial for small-cap companies. While high rates have pressured these debt-reliant companies, the Federal Reserve’s decision to slow rate hikes in late 2024 provided some breathing room. With inflation settling between 1% and 3%—historically complimentary for small-caps—the sector’s performance is expected to get a boost. Therefore, as financial market trends are settling, analysts expect small-cap earnings to outpace large-cap in 2025, especially later in the year.
A significant move that could be helpful for small-cap stocks is the recovery in mergers and acquisitions (M&A) and initial public offerings (IPOs). Even though deal activity slowed during recession fears, M&A rebounded in 2024 and is expected to continue in 2025. Historically, rising M&A activity has boosted returns across market caps and proven to be beneficial for small-caps, as it makes those companies acquisition targets, increasing investors’ interest.
Moreover, industry changes and technological advances offer more opportunities to small-cap companies. While the AI boom has mostly helped mega-cap tech industries, many smaller companies are crucial to AI infrastructure in terms of cybersecurity and thermal management. A 2023 PwC report valued the healthcare AI market at $11 billion, projecting its growth to $188 billion by 2030.
Despite the market challenges, some small-caps under $10 have beaten the broader market, showing resilience amid inflation and trade uncertainties. They show remarkable growth possibilities even as conditions fluctuate.
Methodology
We chose consensus picks of credible websites and compiled a list of stocks priced at $10 or less that are expected to triple. Furthermore, we used a screener to identify stocks with a projected upside potential of over 300%. We have also assessed the hedge fund sentiment from Insider Monkey’s database of over 1,000 elite hedge funds tracked as of the end of the fourth quarter of 2024. The list is arranged in ascending order of the number of hedge fund holders in each stock.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A chemist arranging containers of compounds, ready for the commercialization process.
Relay Therapeutics, Inc (NASDAQ:RLAY)
Upside Potential: 490.23%
Number Of Hedge Funds: 37
Relay Therapeutics, Inc. (NASDAQ:RLAY) develops targeted treatments for cancer and genetic diseases. The company speeds up drug discovery using cutting-edge computational tools and experimental technologies. The company utilizes AI and ML to find new drugs by blending computing power with cutting-edge lab data. This gives a unique insight into how proteins move and behave, which helps the company discover promising candidates that can be used to create innovative therapies.
For FY24, Relay Therapeutics, Inc. (NASDAQ:RLAY) brought in $10 million in revenue, down from $25.5 million in 2023. The main reason for this decline was milestone payments from the company’s license agreements. However, Relay ended Q4 with $781.3 million in cash and investments, a substantial reserve to continue with the ongoing clinical trials. The R&D costs reached $319.1 million in 2024, slightly lower than the prior year, thanks to strategic prioritization, while the yearly net loss was $337.7 million, a small improvement from 2023.
Moreover, Relay’s late-stage cancer program continues to advance with a crucial clinical trial beginning in mid-2025. Early results look promising, showing better treatment responses and disease advancements. In addition, Relay Therapeutics, Inc. (NASDAQ:RLAY) is also exploring new drug combinations to improve effectiveness and increase treatment options.
Thus, Relay Therapeutics, Inc. (NASDAQ:RLAY) shows notable potential with steady cash reserves to fund its clinical programs, ongoing cancer research progress, and growing treatment possibilities. These factors make Relay one of the 10 stocks that will triple.
Overall, RLAY ranks 3rd on our list of stocks under $10 that will triple. While we acknowledge the potential of RLAY, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than RLAY but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.