Best Small-cap Stocks (Updated Monthly!)

Back in May 2020 when I first recommended Nio stock, as the best EV penny stock, it had a market cap valued around $4.5 billion with a stock price trading around $3. Today the stock has seen its share price grow from $3 to almost $50 per share and it currently has a market cap of $67 billion.

If you had bought 1,000 shares of Nio around that time and held it till now, your $3,000 investment would be worth over $50,000. What an incredible RIO! And Nio is not alone, there are a handful of small-cap stocks that have brought in mind-blowing ROIs this year and in years past.

Stocks like Amazon and Tesla started trading as small-cap stocks and today they are worth trillions and billions respectively.

I like to think that every large company started small, but I think it’s more accurate to say that ‘most’ large-cap companies started as small-cap companies. The greatest reward in the stock market is getting into a company like Amazon at $7 per share and holding your position, through the ups and downs, as it gets to its current price of $3,399 per share.

Check out: The Best Small-cap 5G stocks and the Best Small-cap SaaS Stocks

However, as promising as small-cap stocks can be, they are extremely risky investments because of their volatility.

Common Sense: Since the companies are small, they aren’t established (don’t have a strong footing) and a little negative wind, here and there, can see them crash hard. With small-cap stocks, the more rewarding, the riskier it is. However, on a few occasions, the rewards are more than worth the risk.

If you are looking to invest in small-cap stocks, here are really good (by good, I mean promising) small-cap stocks to consider:

1. Purple Innovations

Purple Innovation, Inc. designs and manufactures mattresses, pillows, and cushions. It also offers sheets, mattress protector, bed frames, seat cushions, and weighted blanket and duvets.

The company markets and sells its products through direct-to-consumer online channels, retail brick-and-mortar wholesale partners, and third-party online retailers, as well as through its factory outlet and the company owned showrooms.

Purple Innovation, Inc. was founded in 2010 and is headquartered in Lehi, Utah.

2. Yext

Yext, Inc., a search experience cloud company, engages in delivering brand-verified answers that puts businesses in control of their facts online.

Its Yext platform lets businesses structure the facts about their brands in a database called a Knowledge Graph.

The Yext platform leverages the structured data stored in the Knowledge Graph to power direct answers on a business’ own website, as well as across its Knowledge Network of approximately 175 third-party maps, apps, search engines, intelligent GPS systems, digital assistants, vertical directories, and social networks.

 The platform powers the company’s features, including listings, pages, answers, and other features. It serves the healthcare, retail, and financial services industries.

The company was founded in 2006 and is headquartered in New York, New York.

3. Casa Systems

Casa Systems, Inc., a communications technology company, provides solutions for next-generation centralized, distributed, and virtualized architectures for cable broadband, fixed-line broadband, and wireless networks in North America, Latin America, the Asia-Pacific, Europe, the Middle East, and Africa.

 It offers converged cable access platforms; wireless network core products, such as virtual evolved packet and 5G core products, and security and wireless gateways, as well as small cell solutions and fixed wireless access devices; and optical access solutions, virtualized broadband network gateway router and multiservice routers, fiber-to-the-distribution-point devices, and residential broadband gateways; and machine-to-machine and industrial internet of things routers.

The company was founded in 2003 and is headquartered in Andover, Massachusetts.

4. Limelight Networks, Inc.

Limelight Networks, Inc. provides content delivery and related services in the Americas, Europe, the Middle East, Africa, and the Asia Pacific.

The company operates private networks that deliver Websites, mobile applications, videos, music, software, games, and APIs; offers live and on-demand video delivery services; and provides online video platforms that help organizations manage, publish, syndicate, analyze, and monetize video contents.

It also offers edge cloud services; cloud security services that provide defense against malicious apps, Website attacks, and unauthorized content access; and cloud storage services.

In addition, the company provides professional services; and other infrastructure services, such as transit and rack space services.

It serves media companies operating in the television, music, radio, newspaper, magazine, movie, gaming, software, and social media industries, as well as technology companies and other entities conducting businesses online.

Limelight Networks, Inc. was founded in 2001 and is headquartered in Scottsdale, Arizona.

5. Zuora

Zuora, Inc. provides cloud-based software on a subscription basis that enables companies in various industries to launch, manage, and transform into a subscription business.

The company offers Zuora Central platform that acts as an intelligent subscription management hub that allows customers to orient order-to-revenue operations.

Its products include Zuora Billing for subscription billing; Zuora RevPro, a revenue recognition automation solution; Zuora CPQ for configuring deals, pricing, and quoting in a subscription business; and Zuora Collect designed to handle the complicated function of collections associated with subscription-based businesses.

The company also provides Zuora Marketplace that offers industry-specific tools and third-party applications for its customers.

Zuora, Inc. sells its products through its direct sales force, global systems integrators, management consulting firms, resellers, technology and ecosystem partners.

The company was incorporated in 2006 and is headquartered in Redwood City, California.