In 2023 and 2024, as the S&P 500 was putting up 20%-plus returns each year, a lot of investors got used to thinking that growth was easy to come by. But 2025 has proven to be a much more challenging environment, and many people have dialed back their risk tolerance in an effort to find stable blue chips instead of the next momentum leaders.
That doesn’t mean growth stocks are dead, however. In fact, there are plenty of under-the-radar companies that are plotting significant growth in the year ahead. You probably haven’t heard about them, though, as these specialized small-cap stocks don’t make waves the same way that mega-cap tech stocks do.
But as the following list of the best small-cap stocks to buy shows, big profit potential can come in small packages. Each one of these companies has significantly outperformed in 2025, and is valued at $2 billion or less:
| Stock | Market value | Sector |
| Aeva Technologies Inc. (ticker: AEVA) | $425 million | Technology |
| Astronics Corp. (ATRO) | $820 million | Industrials |
| DRDGold Ltd. (DRD) | $1.4 billion | Materials |
| Groupon Inc. (GRPN) | $750 million | Communication services |
| Natural Grocers by Vitamin Cottage Inc. (NGVC) | $1.1 billion | Consumer defensive |
| Nutex Health Inc. (NUTX) | $770 million | Health care |
| Redfin Corp. (RDFN) | $1.1 billion | Real estate |
| Root Inc. (ROOT) | $1.9 billion | Financial services |
| ThredUp Inc. (TDUP) | $400 million | Consumer cyclical |
Aeva Technologies Inc. (AEVA)
Market value:
$425 million Sector: Technology
Aeva is a sensor specialist committed to transformational technologies that range from automated driving to industrial robotics. Its solutions include cutting-edge light detection and ranging (more commonly known as “lidar”) components — think radar but with lasers instead of sound waves — to support next-gen applications. The company is not yet profitable, so there’s a hefty amount of risk in this startup. But with plans for the company to grow revenue threefold in fiscal 2026, you’d be hard-pressed to find a faster-growing tech stock with more buzz behind it. Shares are up more than 50% year to date in 2025 and could just be getting started if the company can keep putting up impressive growth numbers across the rest of the year.
Astronics Corp. (ATRO)
Market value: $820 million Sector: Industrials
Astronics is an aerospace company closely tied to the U.S. Department of Defense, so it’s not as vulnerable to cyclical ups and downs as other industrial stocks. The company provides critical instruments and components to manufacturers of aircraft, as well as training and test systems for pilots. Thanks to a unique niche and deep customer relationships, the company is predicting that earnings per share may leap 40% or more this fiscal year. Shares of ATRO have also rallied more than 40% this year thanks to investor optimism even as the rest of Wall Street has been deeply in the red, showing this is a small-cap stock that has big-time momentum.
DRDGold Ltd. (DRD)
Market value: $1.4 billion Sector: Materials
The ultimate alternative asset, gold has been in favor lately as investors have sought allocations in areas beyond just the stock market. Specifically, gold has gained more than 25% thus far in 2025 — however, this small-cap miner located in South Africa has gained even more than gold in recent months. That’s because of what’s called “operational leverage,” where input costs remain the same but profits can push higher thanks to better margins driven by commodity prices. DRD proves the power of a miner that can ramp up production and tap into reserves quickly, with massive gains of around 90% already this year. This momentum swings both ways, of course, so DRD stock could drop sharply if precious metal prices retreat. But given the uncertainty of early 2025, that doesn’t seem likely anytime soon.
Groupon Inc. (GRPN)
Market value: $750 million Sector: Communications services
Groupon’s initial public offering was back in 2011 at $28 per share, valuing the digital marketing company at more than $11 billion at the time. That valuation was very short-lived, however, as the company remains down more than 90% from that level when you account for a 20-for-1 reverse split in 2020. But with a much more modest valuation and low expectations on Wall Street, Groupon stock has been doing quite well lately. Case in point: A strong earnings report thanks to its “hyperlocal” marketing push showed a big sequential jump in unit sales. GRPN stock has surged more than 50% year to date thanks to this good news, providing strong outperformance as the broader U.S. market has been under pressure this year.
Natural Grocers by Vitamin Cottage Inc. (NGVC)
Market value: $1.1 billion Sector: Consumer defensive
While the grocery business isn’t usually particularly profitable, Natural Grocers has performed much better than some of the larger chains over the last year or two thanks to its focus on higher-margin organic and natural foods that are akin to “luxury staples” for higher-income households. NGVC started the year off with a bang, as its fiscal first-quarter earnings showed more than 9% sales growth overall thanks to a similar 9% gain for same-store sales. This is hard proof that the company continues to provide a unique value proposition that seems to be protecting Natural Grocers from competition by bigger brands. Economic uncertainty may surely impact consumer trends in 2025, but this solid staples retailer is a combination of stability and growth that’s hard to find in other small-cap stocks.
[READ: Magnificent 7 Stocks: What Are They and How They Dominate the Market]
Nutex Health Inc. (NUTX)
Market value: $770 million Sector: Health care
Nutex provides management of both hospitals and affiliated physician groups, providing a cloud-based platform to help manage health care organizations. Its real estate segment also owns and leases hospital buildings. At the beginning of April, Nutex made a splash with favorable earnings that included a move into profitability thanks to a strategy to send 60% to 70% of billable patient visits to arbitration each month rather than struggle with past billing-related frictions. Investors like what they have seen, with shares up an amazing 300% or so in 2025, including a roughly 150% gain in the last 30 days alone.
Redfin Corp. (RDFN)
Market value: $1.1 billion Sector: Real estate
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 standard 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. After tariff-related volatility tanked interest rates in recent weeks, mortgage applications surged a stunning 20% in early April as a result — proving that potential homeowners who have been frustrated by tight inventories and high borrowing costs are ready to strike while the iron is hot. The stock has jumped more than 50% from a short-lived low in January thanks to renewed investor interest.
Root Inc. (ROOT)
Market value: $1.9 billion Sector: Financial services
With a unique insurance model that relies on an app to track policyholders’ driving habits, Root has disrupted traditional risk-management models by using real-world data to inform its rate structure. The company’s quotes and discounts allow it to undercut the competition without leaving it exposed to large claim volumes. That approach, coupled with its online-only sales model, allows it to be lean and efficient, with expectations of double-digit revenue growth in both fiscal 2025 and fiscal 2026 as the company turns a corner into profitability. What’s even more impressive than a startup challenging mega-cap insurers, however, is the stock’s year-to-date gains of more than 70%. This combination of impressive narrative, numbers and stock performance makes Root one of the very best small-cap stocks to buy in 2025.
ThredUp Inc. (TDUP)
Market value: $400 million Sector: Consumer cyclical
ThredUp is capitalizing on the persistent demand for high-end fashion coupled with a more frugal approach from consumers via an innovative “virtual thrift shop.” This isn’t like suffering through the racks at your local Goodwill or surfing unwearable bargain items on eBay Inc. (EBAY). ThredUp is the go-to destination for more than 50,000 brands from Gap to Gucci — and for the bargain-conscious, sometimes you can strike for 90% off the former retail price. The stock closed 2024 with record revenue and gross margins, and investors clearly have high hopes for 2025 considering the stock has more than doubled already. There’s definitely risk here, as the company still isn’t yet booking an operational profit, but if you want an up-and-coming small-cap stock for 2025, TDUP could be it.
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9 Best Small-Cap Stocks to Buy in 2025 originally appeared on usnews.com
Update 04/16/25: This story was published at an earlier date and has been updated with new information.
