When it comes to cashing in on Wall Street, many investors are enticed by the allure of small-cap stocks. These companies may carry a bit more risk, but they also offer the potential to get in on the ground floor of something big.
The following small-cap stocks are no more than about $1.7 billion in market value, making them a fraction of the size of the typical blue-chip stock out there. They are all in different corners of the market, with a unique business model that gives them a niche even if they can’t compete at the scale of global mega-caps.
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It may never be a good move to put all your eggs in a single small-cap stock — or any stock, for that matter. But thinking holistically about an investment portfolio, there is certainly a place for high-risk but higher-potential companies. Here are nine of the best small-cap stocks to buy now:
| Small-Cap Stock | Sector | Market Capitalization |
| Butterfly Network Inc. (ticker: BFLY) | Health Care | $1.1 billion |
| Coastal Financial Corp. (CCB) | Financial | $1.4 billion |
| Innodata Inc. (INOD) | Technology | $1.7 billion |
| Liquidity Services Inc. (LQDT) | Consumer Cyclical | $1.1 billion |
| Natural Grocers by Vitamin Cottage Inc. (NGVC) | Consumer Staples | $1.1 billion |
| Natural Gas Services Group Inc. (NGS) | Energy | $345 million |
| Outbrain Inc. (OB) | Communication Services | $653 million |
| Redfin Corp. (RDFN) | Real Estate | $1.1 billion |
| U.S. Gold Corp. (USAU) | Materials | $118 million |
Butterfly Network Inc. (BFLY)
Sector: Health care Market cap: $1.1 billion
While most small-cap stock investors may think of aggressive biotech bets as the natural place to look for opportunities in the health care sector, Butterfly is a company making a name for itself with innovative handheld ultrasound devices that are integrated with proprietary software, artificial intelligence and even smartphone apps. The company just closed the books on fiscal 2024 with 35% year-over-year growth in quarterly revenue, beating its full-year growth target of about 25%. Further growth of 20% is expected in fiscal 2025, and the company continues to narrow its losses as it hopes to approach consistent profitability.
There is obviously risk, as the rules are the same for BFLY as they are for high-growth but low-revenue biotechs. That said, the addressable market is huge, and continued success could catch the eye of larger medical device companies and result in a big buyout premium, should things continue to go well in 2025.
Coastal Financial Corp. (CCB)
Sector: Financial Market cap: $1.4 billion
Normally, it’s hard to see the appeal of smaller financial stocks considering the big Wall Street banks have deeper pockets as well as access to more sophisticated business lines, such as investment banking and corporate finance offerings. However, in an era of cross-border political disputes, the multinational nature of these megabanks makes them a bit riskier, while a clear desire to bolster homegrown businesses is a natural fit for regional and community banks.
That’s where Coastal Community Bank comes in. It offers products and services to small and midsize businesses and regular working professionals in Washington state. Lines of credit for local shops or mortgages and auto loans may not make the world turn for banks with trillions in assets, but it is the bread and butter of CCB — which means it stands to benefit more directly from any emphasis on serving these segments.
The stock is already growing nicely, with a 25% revenue gain this fiscal year and another 35% projected for its 2026 fiscal year. And with regional banks insulated from the fallout of a trade war, there’s reason to expect this small-cap stock in the financial sector to keep punching above its weight.
Innodata Inc. (INOD)
Sector: Technology Market cap: $1.7 billion
Founded back in 1988, Innodata is a bit older than what you would expect for a small-cap tech stock. However, what makes it interesting is how far it has grown beyond its roots. Previously, INOD operated as a small and relatively straightforward IT services company. Lately, however, the small-cap stock has focused its operations on data mining and artificial intelligence. That transition seems to be paying off big time, with roughly 90% organic revenue growth in fiscal 2024 and another 35% growth expected in 2025 on top of that. Shares have responded in kind, with the stock up 609% in the past 12 months thanks to strong investor optimism.
Liquidity Services Inc. (LQDT)
Sector: Consumer cyclical Market value: $1.1 billion
Though it’s technically a cyclical stock because of its consumer-focused sales platform, Liquidity Services is actually a bit of a hedge against hard economic times because of the unique nature of its business. Specifically, LQDT provides e-commerce marketplaces and self-directed auction tools with a focus on liquidating inventory quickly and with minimal hassle. As you can imagine, this tends to be very useful in times of financial distress — even as a liquidation resource during bankruptcy. This isn’t just another eBay Inc. (EBAY), however, as LQDT has a unique niche operating government surplus sales as well as a global search engine platform for listing used construction and agriculture equipment. For many folks, LQDT is the most effective way to unload otherwise difficult-to-sell gear.
Shares are up about 111% in the past 12 months as of Feb. 18, thanks to expectations of roughly 35% revenue growth for the fiscal year. What’s more, the company is comfortably profitable with a plush $139 million cash balance and zero debt. That gives it a position both to invest in continued growth and to weather any short-term volatility this small-cap stock may experience in 2025.
Natural Grocers by Vitamin Cottage Inc. (NGVC)
Sector: Consumer staples Market cap: $1.1 billion
Consumer staples stocks typically aren’t growth powerhouses. But NGVC has a unique niche, operating both the Natural Grocers market and Vitamin Cottage dietary supplements brand, and is at the center of two trends that have created a massive opportunity for this small-cap stock. A continued focus on healthier eating habits across the U.S. has helped this staples stock power 490% higher over the past five years, and that growth continues with an impressive rise of about 49% in the past three months alone.
It’s seeing brisk sales growth, tallying a roughly 9% jump in revenue in fiscal 2024 over the prior year — but more importantly, NGVC saw its operating income jump more than 48% thanks to improved pricing power and more efficient operations. Organic and healthy food can be more expensive, but it also tends to be the kind of staples purchased by higher-income Americans and thus not as susceptible to cutbacks in family budgets. That makes Natural Grocers a stable staples play with continued upside potential in 2025.
Natural Gas Services Group Inc. (NGS)
Sector: Energy Market cap: $345 million
It’s no secret that the Trump administration is eager to loosen regulations for the fossil fuel industry. That makes Natural Gas Services Group an obvious beneficiary of an increase in activity across the energy sector. NGS provides natural gas compression equipment and services to the energy industry in the U.S., helping oil and gas producers bring their fuel to market.
While many stocks of integrated energy companies or smaller explorers have run up in the hopes of better days ahead, NGS stands out in that it is not as exposed to the ups and downs of commodity market pricing. It’s also diversified across clients in the sector, which means it’s a bit more insulated from the trend-chasing we’ve seen that may have led to overpriced individual oil and gas picks. With current-year revenue set to rise almost 30% and another 10% to 15% growth expected next fiscal year, it’s no surprise that this small-cap stock’s price has risen more than 79% in the past year in anticipation of strong performance in 2025.
Outbrain Inc. (OB)
Sector: Communication services Market cap: $653 million
Outbrain bills itself as a “web recommendation platform,” but a more blunt description is that it serves those ads that masquerade as content across various internet platforms. With the continued evolution of AI and algorithmic advertising sales, Outbrain is uniquely positioned to benefit from the steady increase in digital ad spending across all kinds of marketing budgets.
What’s more, the recent federal rollbacks, including the blunting of Federal Trade Commission enforcements and attempts to completely dissolve the Consumer Financial Protection Bureau, mean that there is much less likelihood that aggressive advertisers will suffer the consequences if they make misleading claims that result in complaints or backlash. Outbrain’s fundamentals are definitely on the upswing as it has moved to profitability and is forcasting a mammoth 60% revenue growth rate in fiscal 2025, so this is definitely a small-cap advertising stock to watch.
Redfin Corp. (RDFN)
Sector: Real estate Market cap: $1.1 billion
Redfin is a digital real estate platform with a unique value proposition that includes a standard listing fee of 1.5% of the final sale price. That can be significantly lower from a dollar perspective when compared with listing fees as high as 3% charged by other realtors. By comparison, that 1.5-percentage-point difference would add up to $4,500 on a $300,000 home and $7,500 on a $500,000 home. As housing inventories have been tight and interest rates high, housing sales have been comparatively cool over the past year or two. But hopes for Redfin’s disruptive model as well as a more favorable housing sales environment have helped the stock jump about 50% from a short-lived low in January, as this high-risk but high-potential stock has attracted investor interest.
U.S. Gold Corp. (USAU)
Sector: Materials Market cap: $118 million
As the name implies, U.S. Gold engages in the exploration and development of gold and precious metals, primarily in the U.S. That is a unique distinction given the fact that many gold miners are located in South America or Canada rather than within America. For obvious reasons amid current trade dynamics with foreign nations, the notion of a homegrown gold miner has a lot of appeal to investors.
With projects that span 1,120 acres in Laramie County, Wyoming, and 1,710 acres in Lemhi County, Idaho, USAU is a unique play on small-cap gold mining stocks. The run for gold coupled with its domestic appeal has been very favorable for investors in recent months, with shares up roughly 60% since early November and up about 170% in the past 12 months. On Feb. 19, the stock soared more than 9% in intraday trading after positive ratings from several analysts and news that it’s focusing on new flotation technologies to streamline operations at its CK Gold Project in Wyoming.
Just keep in mind that this is the smallest of the small caps, with a market value that is a tenth of some of the other companies on this list — and a small fraction of the typical blue-chip stock.
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9 Best Small-Cap Stocks to Buy in 2025 originally appeared on usnews.com
Update 02/19/25: This story was published at an earlier date and has been updated with new information.
