Best Small-Cap Stocks to Buy in 2025

By Jeremy Bowman – Updated Aug 13, 2025 at 3:53 PM | Fact-checked by Frank Bass

Key Points

Small-cap stocks, between $300M and $2B in value, offer high growth potential but are less stable than large caps.
Invest in small-cap ETFs like iShares Russell 2000 to diversify risk without picking individual stocks.
Small caps may catch up in the bull market's later stages, benefiting from interest rates potentially falling in 2025.

Some of the best stocks to buy in the past 25 years started as small-cap stocks. Amazon (AMZN +1.43%) was a $7 stock in 1998, and Tesla (TSLA -3.36%) had a market valuation of a little more than $1 billion in 2010.

Of course, not every small-cap company becomes a giant. Investing in small companies can be rewarding, but it also comes with risks that investors need to understand. Here's a close look at small-cap stocks, including our picks for some of the best.

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Category	Market Capitalization
Micro-cap companies	Less than $300 million
Small-cap companies	$300 million to $2 billion
Mid-cap companies	$2 billion to $10 billion
Large-cap companies	$10 billion to $200 billion
Mega-cap companies	More than $200 billion

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Small-cap companies are often young companies. They tend to have significant growth potential but are generally less stable than their larger, more established peers. They are often unprofitable.

However, a comparison of the small-cap-focused Russell 2000 index and the large-cap-focused S&P 500 shows that small-cap stocks have outperformed large-cap companies since 2000. Yet large caps have narrowed the gap significantly as artificial intelligence (AI) has become more widely adopted. The chart below demonstrates the difference:

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A chart showing the performance of the Russell 2000 vs. the S&P 500

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Over time, small-cap stock prices tend to be more volatile than those of larger companies, and stock values fluctuate more dramatically. Typically, small caps outperform in bull markets, but the recent one has been different. Thanks to the AI boom that began around 2023, large-cap tech stocks have paced the stock market's gains, while small-cap stocks have underperformed, in part due to high interest rates.

Small caps have also fallen sharply amid concerns about tariffs and trade wars, showing again that they're more volatile than their large-cap peers.

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NASDAQ: MGNI

Magnite

Today's Change

(4.21%) $0.81

Current Price

$19.95

Key Data Points

Market Cap

$3B

Day's Range

$19.55 - $20.27

52wk Range

$8.22 - $26.65

Volume

62K

Avg Vol

2.9M

Gross Margin

61.03%

Dividend Yield

N/A

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NASDAQ: AMPL

Amplitude

Today's Change

(1.60%) $0.16

Current Price

$10.14

Key Data Points

Market Cap

$1B

Day's Range

$10.02 - $10.28

52wk Range

$7.55 - $14.88

Volume

1.1M

Avg Vol

1.5M

Gross Margin

74.14%

Dividend Yield

N/A

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For example, Amplitude helped guide Burger King's "Whopper Detour" campaign. It also showed Peloton (PTON +4.27%) how social engagement was key to getting its customers to stick with its workouts.

Like other software stocks, Amplitude struggled in the aftermath of the COVID-19 pandemic as many of its customers restructured their contracts. But the company has moved past that churn. It's seeing improving growth, especially in remaining performance obligations, a proxy for backlog.

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NASDAQ: CWCO

Consolidated Water

Today's Change

(0.45%) $0.16

Current Price

$35.44

Key Data Points

Market Cap

$1B

Day's Range

$35.24 - $35.71

52wk Range

$22.69 - $36.88

Volume

78K

Avg Vol

99K

Gross Margin

34.89%

Dividend Yield

0.01%

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The company is currently focused on the Caribbean market, with several plants in the Cayman Islands and the Bahamas. That's helped it deliver strong growth in recent years, outperforming its water utility peers. The trend should continue as it capitalizes on the desalination opportunity and water scarcity becomes a greater problem.

In June, the company raised its quarterly dividend 27% to $0.14, a sign of confidence in its future growth.

4. Sweetgreen

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NYSE: SG

Sweetgreen

Today's Change

(-0.81%) $-0.06

Current Price

$7.38

Key Data Points

Market Cap

$1B

Day's Range

$7.28 - $7.60

52wk Range

$7.23 - $45.12

Volume

4.3M

Avg Vol

Gross Margin

8.51%

Dividend Yield

N/A

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NASDAQ: SERV

Serve Robotics

Today's Change

(0.73%) $0.10

Current Price

$13.84

Key Data Points

Market Cap

$1B

Day's Range

$13.83 - $14.45

52wk Range

$4.66 - $24.35

Volume

6.8M

Avg Vol

10M

Gross Margin

-34726.88%

Dividend Yield

N/A

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About the Author

Jeremy Bowman has been a contributing Motley Fool stock market analyst, covering technology, consumer goods, and macroeconomic trends since 2011. Before The Motley Fool, Jeremy was a newspaper reporter, restaurant manager, and English teacher abroad. He holds a bachelor’s degree in English from Colorado College and a master’s degree in business administration from American University. One of his Motley Fool headlines was briefly featured on Late Night with Stephen Colbert.

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Jeremy Bowman has positions in Amazon, Chipotle Mexican Grill, Magnite, Meta Platforms, Nvidia, Sweetgreen, The Trade Desk, and Walt Disney. The Motley Fool has positions in and recommends Adobe, Alphabet, Amazon, Chipotle Mexican Grill, Meta Platforms, Nvidia, Peloton Interactive, Serve Robotics, Tesla, The Trade Desk, Uber Technologies, Walt Disney, and Warner Bros. Discovery. The Motley Fool recommends Magnite and Sweetgreen and recommends the following options: short September 2025 $60 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.