Small-cap tech stocks, usually defined as technology companies with market capitalizations of no more than $2 billion, can be risky investments. Many of these small companies are pioneering new technologies. But their share prices can be highly volatile, and they risk being outcompeted by larger businesses with stronger balance sheets.
Some of these emerging technology businesses may be future leaders in their industries and are worth adding to your portfolio today. Investing in a basket of small-cap stocks -- say five to 10 -- is less risky than concentrating your holdings in a single company or two.

Four small-cap tech stocks to watch
New technologies are reshaping the global economy and creating profit opportunities for small businesses and their shareholders. These four small-cap tech companies are worth watching in 2025:
1. PubMatic

NASDAQ: PUBM
Key Data Points
PubMatic (PUBM +2.02%) is a digital advertising technology firm. Its software provides internet publishers with a means to monetize their work by using artificial intelligence (AI) and automation to sell advertising.
PubMatic's publisher clients include a diverse group of businesses, including news organizations, e-commerce companies, video game makers, and streaming TV services. The company derives about half of its revenue from internet content formatted for mobile devices. Mobile represents a growing opportunity for PubMatic, especially outside the U.S., where PubMatic is just beginning to add customers. Digital marketing is another secular growth trend that benefits the company.
PubMatic completed its initial public offering (IPO) at the end of 2020. The company's sales growth has slowed this year, and share prices have been volatile. Still, the stock looks attractively valued, given that its cloud platform processed 75 trillion ad impressions in the first quarter of 2025 for more than 1,950 publishers.
2. Harmonic

NASDAQ: HLIT
Key Data Points
3. ACM Research

NASDAQ: ACMR
Key Data Points
4. Inseego

NASDAQ: INSG
Key Data Points
Related investing topics
Why invest in small-cap tech stocks?
Investing small sums of cash in emerging tech businesses could produce substantial portfolio gains over time. But maintaining portfolio exposure to small-cap companies requires regularly finding new small companies in which to invest, since many successful small-cap companies eventually become mid-cap or even large-cap companies. Share prices of small-cap stocks can be highly volatile, but small-cap tech stocks can also yield significant returns for patient shareholders.















