9 Best Small-Cap Stocks to Buy in 2025
As we approach 2025, investors are increasingly turning their attention to small-cap stocks as a compelling avenue for long-term growth and portfolio diversification.
While large-cap stocks dominate headlines, small-cap companies—typically defined as those with market capitalizations between $300 million and $2 billion—often offer higher growth potential due to their agility, innovation, and ability to capture emerging market opportunities.
In this article, we highlight nine of the best small-cap stocks to consider for your investment portfolio in 2025. These companies were selected based on strong fundamentals, solid growth trajectories, competitive advantages, and favorable industry tailwinds.
1. Enphase Energy, Inc. (ENPH)
Market Cap: ~$1.8 billion (as of early 2025)
Sector: Renewable Energy / Technology
Although Enphase has grown significantly over the past few years, it remains a small-cap player in the broader energy sector. The company specializes in solar microinverters, battery storage, and energy management systems.
With global demand for clean energy accelerating, Enphase is well-positioned to benefit from government incentives and rising residential solar adoption.
Why Buy in 2025?
Strong international expansion, recurring software revenue (via Enphase IQ), and integration with smart home ecosystems make ENPH a high-growth candidate.
2. Axon Enterprise, Inc. (AXON)
Market Cap: ~$1.5 billion
Sector: Technology / Public Safety
Known for its TASER devices and digital evidence management platform (Evidence.com), Axon is transforming law enforcement through technology.
The company is investing heavily in AI-driven tools for body camera analytics, real-time crime monitoring, and officer safety solutions.
Why Buy in 2025?
Recurring SaaS revenue from cloud services, a mission-critical product suite, and increasing adoption by police departments globally position AXON for sustained growth.
3. ShockWave Medical, Inc. (SWAV)
Market Cap: ~$1.6 billion
Sector: Healthcare / Medical Devices
ShockWave Medical pioneers intravascular lithotripsy (IVL), a breakthrough technology used to treat calcified coronary and peripheral artery disease. Its minimally invasive approach is gaining rapid traction among interventional cardiologists.
Why Buy in 2025?
Expanding clinical applications, growing physician adoption, and under-penetrated international markets offer significant upside potential.
4. The Trade Desk, Inc. (TTD)
Market Cap: ~$1.9 billion
Sector: Advertising Technology
While The Trade Desk is a leader in programmatic advertising, it still qualifies as a small-cap relative to tech giants. The company provides a data-driven platform for advertisers to buy digital ads across connected TV, mobile, and audio platforms.
Why Buy in 2025?
With the shift from traditional TV to CTV (Connected TV) accelerating, TTD is at the forefront of the next-generation ad economy. Its open ecosystem and privacy-compliant targeting tools give it a competitive edge.
5. Zscaler, Inc. (ZS)
Market Cap: ~$1.7 billion
Sector: Cybersecurity / Cloud Computing
Zscaler offers cloud-native security solutions that protect enterprises in a zero-trust environment. Its platform replaces legacy firewalls with secure access service edge (SASE) architecture, ideal for remote work and hybrid IT environments.
Why Buy in 2025?
Cybersecurity threats are rising, and Zscaler’s subscription-based model ensures predictable revenue. Strong customer retention and upsell opportunities support long-term growth.
6. Upstart Holdings, Inc. (UPST)
Market Cap: ~$1.4 billion
Sector: Fintech / Artificial Intelligence
Upstart uses AI to improve credit decisioning for banks and lenders, enabling more accurate risk assessment and expanding access to credit. Despite volatility in the lending market, Upstart’s technology has proven resilient and scalable.
Why Buy in 2025?
Partnerships with major financial institutions, improving credit performance, and international expansion into Canada and Brazil could drive a strong rebound in 2025.
7. Aehr Test Systems (AEHR)
Market Cap: ~$600 million
Sector: Semiconductor Equipment
Aehr Test Systems provides test and reliability solutions for power semiconductors used in electric vehicles, 5G, and renewable energy systems. As demand for silicon carbide (SiC) and gallium nitride (GaN) devices grows, Aehr is becoming a critical enabler.
Why Buy in 2025?
Strategic positioning in the EV supply chain, rising backlog, and long-term contracts with tier-1 manufacturers make AEHR a high-leverage play on semiconductor growth.
8. CryoPort, Inc. (CYRX)
Market Cap: ~$500 million
Sector: Life Sciences / Logistics
CryoPort specializes in cryogenic logistics for biopharmaceuticals, including cell and gene therapies that require ultra-cold chain solutions. With personalized medicine on the rise, the need for temperature-controlled shipping is growing rapidly.
Why Buy in 2025?
Strong partnerships with leading biotech firms, recurring service contracts, and expanding global infrastructure support long-term scalability.
9. Rumble, Inc. (RUM)
Market Cap: ~$700 million
Sector: Digital Media / Technology
Rumble is an emerging video-sharing platform focused on free speech and content monetization for creators. It has gained traction as an alternative to mainstream platforms, attracting conservative and independent voices.
Why Buy in 2025?
Increasing user engagement, advertising revenue growth, and potential partnerships with media companies could propel Rumble into a major digital content player.
Final Thoughts: Why Small-Caps Matter in 2025
Small-cap stocks carry higher risk due to lower liquidity and greater volatility, but they also offer outsized return potential. The nine companies listed above represent innovative leaders in high-growth industries—from clean energy and AI to biotech and cybersecurity.
As the global economy evolves in 2025, driven by digital transformation, decarbonization, and healthcare innovation, small-cap stocks could outperform larger peers. However, investors should conduct thorough due diligence and consider diversifying across sectors to manage risk.
Bottom Line: These nine small-cap stocks are poised for strong growth in 2025. Whether you’re a growth-oriented investor or looking to diversify with emerging leaders, these companies deserve a close look.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always consult with qualified financial advisor before making investment decisions.