In the quest for achieving outsized returns, small-cap stocks have emerged on fertile ground for such aspirations. Historically, small-cap companies tend to do extremely well in bull markets but fairly poorly in bear markets.
If you’re one of the lucky few, you’ll have the opportunity to capitalize on them before they pass you by. However, that does not mean that it won’t carry any risk. Investors should always tread carefully and only invest what they can afford to lose potentially. But if you’re willing to take some risks, these three small caps could be the launchpad to triple-digit returns by 2026.
Now, let’s discover the three best small-cap stocks in February 2024!
Navitas Semiconductor (NVTS)
Navitas Semiconductor (NASDAQ:NVTS) has been on a tear in the last week, up nearly 20% to $6.79 per share. Investors are placing their bets on the SiC chip boom and the long term growth prospects of gallium nitride-based semiconductors.
Navitas plans to revolutionize the semiconductor industry with a new technology that offers significant advantages to silicon carbide chips. Gallium nitride provides robust performance, efficiency, size and cost advantages. While they primarily serve the energy storage and EV markets, there is a growing interest and use case in consumer electronics. Their flagship GANFast power ICs and GeneSiC MOSFETs are paving the way for a greener, more efficient future.
In Q3 2023, the company’s revenue skyrocketed 115% YOY to $122 million. They also secured a major supply deal with Samsung to power the Galaxy S23. The company is led by its CEO, Gene Sheridan, who has more than 25 years of experience in the semiconductor industry. With the company at the forefront of a new emerging technology, Navitas is undoubtedly one of the best small-cap stocks to buy for 2024.
ACM Research (ACMR)
ACM Research (NASDAQ:ACMR) remains one of the top small-cap stocks to buy for 2024. The company is set to benefit from the rebound in the wafer fabrication equipment market over the next several quarters.
ACM Research’s underlying business primarily supports integrated circuits (ICs) and semiconductor manufacturing. Their focus lies on wafer packaging and cleaning preparation for ICs. While most of their business is concentrated in China, tailwinds support accelerated growth in FY24.
In their latest quarterly results, revenue increased 26% YOY to 168.6 million. Net income increased by 22% as spending on mature nodes drove profitability. Management expects continued growth in the 2024 fiscal year, and AI could be a key driver. Furthermore, CEO David Wang is guiding revenue in the $650 million to $725 million range, reflecting approximately 30% YOY growth. This under-the-radar semiconductor stock could be a multibagger if you’re more risk-tolerant.
Sterling Infrastructure (STRL)
Sterling Infrastructure (NASDAQ:STRL) is an infrastructure and construction company headquartered in Houston, Texas. The stock more than doubled in 2023 due to strong revenue and EPS growth.
Sterling Infrastructure specializes in e-infrastructure, transportation, and building solutions. Their diverse portfolio and expertise allow them to tackle projects ranging from data centers and distribution hubs to highways, bridges and residential buildings. The company is also set to benefit from the Bipartisan Infrastructure Bill, which encompasses up to $65 billion to enhance U.S. infrastructure across the country. This will be just one of the tailwinds for accelerated growth over the next decade.
They have been landing large contracts over the last several quarters and are set to report their Q4 and full-year results for 2023. For example, STRL landed $730 million in new contract awards on October 31st for their e-mobility and transportation business. In Q3 2023, EPS surged 26% YOY to $1.26 per share with a quarter ended backlog of over $2 billion. With the need to rapidly build new data centers, this infrastructure stock could be pivotal for the AI revolution that’s currently unfolding.
On the date of publication, Terel Miles did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
