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Business Insider
02-07-2025
- Business
- Business Insider
4 reasons forecasters are bullish on the market's smallest stocks after years of underperformance
Stock forecasters can't stop talking about the market's smallest and least impressive stocks. They're referring to the small-cap sector, an area of the stock market that strategists have been bullish on, despite underperforming the overall market in recent years. The Russell 2000, which slipped into a bear market over the first half of the year, has recouped most of its losses in recent months. But the index of small-cap US firms is still down about 1% year-to-date, lagging the S&P 500 's 5% gain. On a five-year horizon, the Russell 2000 has yielded a 53% return — underwhelming compared to the S&P 500's 98% climb. But there are a few reasons some forecasters remain bullish on the sector. Here's what strategists are saying. 1. A possible IPO boom on the horizon There's reason to believe that more small, private companies are gearing up to go public in the near term, according to analysts at Janus Henderson. Small private firms have typically relied on private equity investors to get fresh capital, but many private loans are structured over a 5- to 7-year time horizon, analysts said, and companies will likely be looking for new sources of money once the debt matures. Interest rates are also higher than they were in the past decade, which could make it more challenging to attract private investors, they added. "That's why going public could become a more attractive path for companies needing refinancing or private equity sponsors looking for an exit," analysts said, pointing to the surge in IPOs over the first half of 2025 compared to the prior year. "A reopening IPO market typically benefits the entire small-cap asset class as quality companies tend to go public first and generate positive momentum across the space." Rebounding from a bear market Small-cap stocks have historically performed well after bear markets, according to an analysis from Royce Investment Partners. The Russell 2000 fell into a bear market earlier this year, falling 21% from January to April 8, and historically, stocks in the index have seen healthy growth following a trough. In 2020, the Russell 2000 plunged more than 30% peak-to-trough amid the broader coronavirus-fueled sell-off, but value and growth stocks in the index more than doubled in value in the year following the event, according to Francis Gannon, the co-chief investment officer at Royce. Over the last 20 years, small-caps gained an average 60% in the year following a bear market, Gannon added in a note. Valuations in the sector also remain attractive. "We see the small-cap market as fundamentally healthy. The disconnect between large caps and small caps reflects market sentiment rather than underlying business performance," analysts at Janus Henderson said. Strong investment themes According to Jill Hall, the head of US small and mid-cap strategy at Bank of America, small-cap stocks should also benefit from a handful of bullish themes unfolding in the broader economy. Here are some of the tailwinds Hall sees: Reshoring. The economy moving more of its manufacturing activity back to the US could be a boon for small public companies. In a note last year, Morgan Stanley estimated that restoring could unlock as much as $10 trillion in value for the US economy over the next decade. Capital expenditures. The US is in the midst of a big capex cycle, which could also benefit small firms, Hall suggested. US private fixed investment clocked in around $4.2 trillion in the first quarter of 2024, according to data from the Bureau of Economic Analysis De-globalization. The US decreasing its reliance on supply chains abroad could also support small domestic firms. "Overall, I do think that over the long-term, there is still greater potential for outperformance of small-caps, given where valuations are, and given some of the multi-year themes," Hall said, speaking to CNBC this week. The America-first economy The Trump administration's push for an America-first economy should also benefit small public firms, according to Peter Kraus, the CEO of the asset manager Aperture Investors. Kraus pointed to the GOP tax and spending bill, which includes proposals like extending Trump's 2017 tax cuts and bigger tax breaks for some businesses and workers. "Congress is going to focus on the domestic economy, and I do think domestically oriented companies, principally mid-cap and small-cap companies, are going to benefit. And they've been the laggards in the last five years," Kraus said, speaking to CNBC on Tuesday.
Yahoo
06-04-2025
- Business
- Yahoo
Is Aura Biosciences (AURA) The Small Cap Stock with Huge Upside Potential?
We recently published a list of . In this article, we are going to take a look at where Aura Biosciences, Inc. (NASDAQ:AURA) stands against other small cap stocks with huge upside potential. In times when everyone is chasing high-cap powerhouses, knowing the right stock to invest in at the right time and the right price is highly essential. In this race for Wall Street giants, one must slow down and ask if the stock is really worth it. Or better – is it set to yield the same returns as a high-growth small-cap stock? As Francis Gannon, Co-Chief Investment Officer at Royce Investment Partners, says: 'Small-cap stocks are a 'forgotten' group that present lucrative opportunities for investors seeking diversification amid market uncertainties.' Small-cap stocks have a market capitalization between $300 million and $2 billion. Although generally more volatile and risky, history shows that small-cap stocks have often outperformed large-cap stocks. During the tech bubble of the 1990s, large-cap stocks were everyone's favorite, until the bubble burst in March 2000, when more and more small-cap companies witnessed better performance. In general, the performance of the stock doesn't entirely depend on whether the stock is large-cap or small-cap but more on where the macro and micro environments are taking the business. However, since the small-cap stocks are usually away from the analysts' eyes, they are more undervalued, and so can provide a solid return on the investment. Since there is a high growth potential for such a stock, small-cap stocks are highly valued by analysts. As the business itself is in an early stage of growth, there is more room for a stock boom. Volatility is another reason for holding these stocks. There is an increased likelihood of short-term trading and price swings that an investor can capitalize on. Additionally, many such stocks operate in specialized or niche markets, allowing the analysts to leverage interesting and unique business models, and that too, if successful, can return immensely. The fact that small-cap stocks are common targets for mergers and acquisitions is another reason to believe in these stocks. Analysts keep track of these stocks with the expectation of buyouts, which often leads to a premium in share price. A research report by John Hancock Investment Management on understanding the performance of small-cap stocks indicated that, historically, small-cap stocks have had higher average returns than large-cap stocks. As small-cap stocks work well in diversified portfolios, they behave differently than large-cap stocks. The study examined the existence of size premiums in the United States, emphasizing the historical performance of Fama/French U.S. Small and Large Cap portfolios. The findings show that since the 1920s, small-cap stocks have outperformed large-cap stocks. Another research by Invesco in 2020 revealed that small caps have outpaced large caps from the past four recessions in all but one of the following 1- and 3-year periods. To decide which small-cap stock is right for you, it is pertinent to monitor closely not only the stock itself but also its peers, as it provides a bigger picture. The factors that are crucial in the choice you make include the liquidity position, sensitivity to market swings, financial stability, and connection to AI. The stocks that we have selected are among the ones yielding high upside potential across a range of industries like financial, food, and mining. We have used Finviz and Stock Analysis screeners to select ten stocks with market capitalizations between $300 million and $2 billion. The one-year price targets have been extracted from Yahoo Finance to calculate the upside potential based on the stocks' prices as of March 28, 2025. These companies are then listed according to their upside potential. At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (). A close-up of white lab coats and protective masks in a biotechnology research laboratory. Upside Potential: 244% Market Capitalization: $349.661 million Aura Biosciences, Inc. (NASDAQ:AURA) is a Massachusetts-based clinical-stage biotechnology company that develops precision immunotherapies to treat various types of solid tumors designed to fight cancer by protecting the functions of organs. The primary offering of the company, bel-ser, is in the last stage of clinical development for the treatment of people living with choroidal melanoma. This small-cap company fully leverages its vision to treat cancer through a modified approach. At the recent investor event, the management shared details on their bladder program, which has the potential to apply to a range of cancers. The company has also initiated a Phase 2 clinical trial in metastases to the choroid, a condition affecting around 20,000 people annually in the United States and Europe, with no approved treatments. The financial results support Aura Biosciences, Inc. (NASDAQ:AURA)'s plans to tap the untapped, with Research and Development costs up by nearly 12%, from $65.2 million to $73.3 million, for the year ended December 31, 2024. The latest earnings report of Aura Biosciences, Inc. (NASDAQ:AURA) also posted $151.1 million in cash and marketable securities for the previous year, adequate to support operations into the second half of 2026. The company is highly optimistic regarding the potential of its top tier, Bel-Sar, to redefine treatment paradigms across major cancer types. Just a few days ago, H.C. Wainwright raised the price target for Aura Biosciences, Inc. (NASDAQ:AURA) to $25 from $22 while holding onto the buy rating. The financial institution also expects the company to report sales of $33 million during the launch year, with forecasts as high as $680 million by 2030 if it can commercialize the treatment for primary choroidal melanoma in 2027. Capitalizing on the development plans it has for the future, this small-cap company has a huge upside potential of around 244%. Overall, AURA ranks 1st on our list of small cap stocks with huge upside potential. While we acknowledge the potential of AURA, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than AURA but that trades at less than 5 times its earnings, check out our report about this . READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
06-04-2025
- Business
- Yahoo
Is Aspen Aerogels (ASPN) The Small Cap Stock with Huge Upside Potential?
We recently published a list of . In this article, we are going to take a look at where Aspen Aerogels, Inc. (NYSE:ASPN) stands against other small cap stocks with huge upside potential. In times when everyone is chasing high-cap powerhouses, knowing the right stock to invest in at the right time and the right price is highly essential. In this race for Wall Street giants, one must slow down and ask if the stock is really worth it. Or better – is it set to yield the same returns as a high-growth small-cap stock? As Francis Gannon, Co-Chief Investment Officer at Royce Investment Partners, says: 'Small-cap stocks are a 'forgotten' group that present lucrative opportunities for investors seeking diversification amid market uncertainties.' Small-cap stocks have a market capitalization between $300 million and $2 billion. Although generally more volatile and risky, history shows that small-cap stocks have often outperformed large-cap stocks. During the tech bubble of the 1990s, large-cap stocks were everyone's favorite, until the bubble burst in March 2000, when more and more small-cap companies witnessed better performance. In general, the performance of the stock doesn't entirely depend on whether the stock is large-cap or small-cap but more on where the macro and micro environments are taking the business. However, since the small-cap stocks are usually away from the analysts' eyes, they are more undervalued, and so can provide a solid return on the investment. Since there is a high growth potential for such a stock, small-cap stocks are highly valued by analysts. As the business itself is in an early stage of growth, there is more room for a stock boom. Volatility is another reason for holding these stocks. There is an increased likelihood of short-term trading and price swings that an investor can capitalize on. Additionally, many such stocks operate in specialized or niche markets, allowing the analysts to leverage interesting and unique business models, and that too, if successful, can return immensely. The fact that small-cap stocks are common targets for mergers and acquisitions is another reason to believe in these stocks. Analysts keep track of these stocks with the expectation of buyouts, which often leads to a premium in share price. A research report by John Hancock Investment Management on understanding the performance of small-cap stocks indicated that, historically, small-cap stocks have had higher average returns than large-cap stocks. As small-cap stocks work well in diversified portfolios, they behave differently than large-cap stocks. The study examined the existence of size premiums in the United States, emphasizing the historical performance of Fama/French U.S. Small and Large Cap portfolios. The findings show that since the 1920s, small-cap stocks have outperformed large-cap stocks. Another research by Invesco in 2020 revealed that small caps have outpaced large caps from the past four recessions in all but one of the following 1- and 3-year periods. To decide which small-cap stock is right for you, it is pertinent to monitor closely not only the stock itself but also its peers, as it provides a bigger picture. The factors that are crucial in the choice you make include the liquidity position, sensitivity to market swings, financial stability, and connection to AI. The stocks that we have selected are among the ones yielding high upside potential across a range of industries like financial, food, and mining. We have used Finviz and Stock Analysis screeners to select ten stocks with market capitalizations between $300 million and $2 billion. The one-year price targets have been extracted from Yahoo Finance to calculate the upside potential based on the stocks' prices as of March 28, 2025. These companies are then listed according to their upside potential. At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (). A technician meticulously inspecting a corrosion-resistant insulation panel for a fire-protection system. Upside Potential: 166% Market Capitalization: $540.25 million Aspen Aerogels, Inc. (NYSE:ASPN) is an aerogel technology company that engages in the design, development, and marketing of aerogel materials incorporated in the energy, industrial, electric vehicle, and sustainable insulation materials markets across the United States, Canada, Asia, Europe, and Latin America. Claiming to be a technology leader in sustainability, this Massachusetts-based company promotes the adoption of EVs, energy efficiency, and the availability of cleaner fuels in conventional energy markets through its products. It is among the stocks with the biggest upside. In its recent earnings call, the company announced an impressive 90% year-over-year growth, with the adjusted EBITDA rising to $90 million from a loss of $23 million. Many believe it to be just the beginning. The Energy Industrial segment of Aspen Aerogels, Inc. (NYSE:ASPN) is forecasted to keep rising, with a 2025 guidance of $35 million to $40 million. The company's PyroThin Thermal Barriers Design Award from Volvo Truck, marking it to be the second one in the commercial vehicle segment, is yet another growth catalyst. While production will begin in the second half of 2026, sales are forecasted to ramp up in 2027. Amid Trump's conservative trade approach, Aspen Aerogels, Inc. (NYSE:ASPN) has adopted an effective pricing strategy, achieving optimization and collaboration with the EMF partner to reduce product costs. The Energy Industrial business is actually what the stakeholders are counting on as it will promote an exacerbated focus on energy and power generation. With this in mind, the stock clearly shows signs of huge upside potential. Overall, ASPN ranks 3rd on our list of small cap stocks with huge upside potential. While we acknowledge the potential of ASPN, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than ASPN but that trades at less than 5 times its earnings, check out our report about this . READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
06-04-2025
- Business
- Yahoo
Is Denison Mines Corp. (DNN) The Small Cap Stock with Huge Upside Potential?
We recently published a list of . In this article, we are going to take a look at where Denison Mines Corp. (NYSEAMERICAN:DNN) stands against other small cap stocks with huge upside potential. In times when everyone is chasing high-cap powerhouses, knowing the right stock to invest in at the right time and the right price is highly essential. In this race for Wall Street giants, one must slow down and ask if the stock is really worth it. Or better – is it set to yield the same returns as a high-growth small-cap stock? As Francis Gannon, Co-Chief Investment Officer at Royce Investment Partners, says: 'Small-cap stocks are a 'forgotten' group that present lucrative opportunities for investors seeking diversification amid market uncertainties.' Small-cap stocks have a market capitalization between $300 million and $2 billion. Although generally more volatile and risky, history shows that small-cap stocks have often outperformed large-cap stocks. During the tech bubble of the 1990s, large-cap stocks were everyone's favorite, until the bubble burst in March 2000, when more and more small-cap companies witnessed better performance. In general, the performance of the stock doesn't entirely depend on whether the stock is large-cap or small-cap but more on where the macro and micro environments are taking the business. However, since the small-cap stocks are usually away from the analysts' eyes, they are more undervalued, and so can provide a solid return on the investment. Since there is a high growth potential for such a stock, small-cap stocks are highly valued by analysts. As the business itself is in an early stage of growth, there is more room for a stock boom. Volatility is another reason for holding these stocks. There is an increased likelihood of short-term trading and price swings that an investor can capitalize on. Additionally, many such stocks operate in specialized or niche markets, allowing the analysts to leverage interesting and unique business models, and that too, if successful, can return immensely. The fact that small-cap stocks are common targets for mergers and acquisitions is another reason to believe in these stocks. Analysts keep track of these stocks with the expectation of buyouts, which often leads to a premium in share price. A research report by John Hancock Investment Management on understanding the performance of small-cap stocks indicated that, historically, small-cap stocks have had higher average returns than large-cap stocks. As small-cap stocks work well in diversified portfolios, they behave differently than large-cap stocks. The study examined the existence of size premiums in the United States, emphasizing the historical performance of Fama/French U.S. Small and Large Cap portfolios. The findings show that since the 1920s, small-cap stocks have outperformed large-cap stocks. Another research by Invesco in 2020 revealed that small caps have outpaced large caps from the past four recessions in all but one of the following 1- and 3-year periods. To decide which small-cap stock is right for you, it is pertinent to monitor closely not only the stock itself but also its peers, as it provides a bigger picture. The factors that are crucial in the choice you make include the liquidity position, sensitivity to market swings, financial stability, and connection to AI. The stocks that we have selected are among the ones yielding high upside potential across a range of industries like financial, food, and mining. We have used Finviz and Stock Analysis screeners to select ten stocks with market capitalizations between $300 million and $2 billion. The one-year price targets have been extracted from Yahoo Finance to calculate the upside potential based on the stocks' prices as of March 28, 2025. These companies are then listed according to their upside potential. At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (). An open pit mine with a large yellow excavator machine with tailings visible in the background, illustrating the uranium extraction process. Upside Potential: 223% Market Capitalization: $1.205 billion Denison Mines Corp. (NYSEAMERICAN:DNN) is a leading uranium exploration and development company with interests in the Athabasca Basin, Wheeler River, Midwest Project, McClean Lake, and Waterbury Lake. Founded in 1997, this Canada-based company is committed to large-scale uranium projects through rigorous technical evaluations and innovative approaches to mining. The company not only meets the technological demands of complex mining projects but also satisfies the community and environmental concerns regarding modern resource development. When considering Denison Mines Corp. (NYSEAMERICAN:DNN), one can never overlook the Wheeler Project. This flagship project, with production expected to begin by late 2027, will allow the company to capitalize on the higher forecasted uranium prices and diversify its revenue stream. This small-cap company has worked extensively towards technically derisking the project while maintaining a strong financial position. What attracts us the most to Denison Mines Corp. (NYSEAMERICAN:DNN) is its Phoenix Project. This initiative, aiming to build and operate the upcoming large-scale uranium mine in northern Saskatchewan, is going to be a pioneer of uranium ISR mining operations in the Athabasca Basin region. The Financial and Operational Results for 2024 highlighted significant progress of the venture, with construction planned for early 2026 and production targeted for the first half of 2028. While we won't be seeing returns in the short term, the long haul for the project looks quite promising. Another factor that we can't ignore is the overall uranium industry. The uranium market is well-positioned for high growth due to a demand surge from nuclear energy and constrained supply within the market. With a global trend towards cleaner energy, the demand is anticipated to rise by as high as 60% by 2040. On that note, Denison Mines Corp. (NYSEAMERICAN:DNN), with a potential upside of over 200%, has a sound standing in what could be a bull case over the next few years. Overall, DNN ranks 2nd on our list of small cap stocks with huge upside potential. While we acknowledge the potential of DNN, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than DNN but that trades at less than 5 times its earnings, check out our report about this . READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
06-04-2025
- Business
- Yahoo
Is Krispy Kreme (DNUT) A Small Cap Stock with Huge Upside Potential?
We recently published a list of . In this article, we are going to take a look at where Krispy Kreme, Inc. (NASDAQ:DNUT) stands against other small cap stocks with huge upside potential. In times when everyone is chasing high-cap powerhouses, knowing the right stock to invest in at the right time and the right price is highly essential. In this race for Wall Street giants, one must slow down and ask if the stock is really worth it. Or better – is it set to yield the same returns as a high-growth small-cap stock? As Francis Gannon, Co-Chief Investment Officer at Royce Investment Partners, says: 'Small-cap stocks are a 'forgotten' group that present lucrative opportunities for investors seeking diversification amid market uncertainties.' Small-cap stocks have a market capitalization between $300 million and $2 billion. Although generally more volatile and risky, history shows that small-cap stocks have often outperformed large-cap stocks. During the tech bubble of the 1990s, large-cap stocks were everyone's favorite, until the bubble burst in March 2000, when more and more small-cap companies witnessed better performance. In general, the performance of the stock doesn't entirely depend on whether the stock is large-cap or small-cap but more on where the macro and micro environments are taking the business. However, since the small-cap stocks are usually away from the analysts' eyes, they are more undervalued, and so can provide a solid return on the investment. Since there is a high growth potential for such a stock, small-cap stocks are highly valued by analysts. As the business itself is in an early stage of growth, there is more room for a stock boom. Volatility is another reason for holding these stocks. There is an increased likelihood of short-term trading and price swings that an investor can capitalize on. Additionally, many such stocks operate in specialized or niche markets, allowing the analysts to leverage interesting and unique business models, and that too, if successful, can return immensely. The fact that small-cap stocks are common targets for mergers and acquisitions is another reason to believe in these stocks. Analysts keep track of these stocks with the expectation of buyouts, which often leads to a premium in share price. A research report by John Hancock Investment Management on understanding the performance of small-cap stocks indicated that, historically, small-cap stocks have had higher average returns than large-cap stocks. As small-cap stocks work well in diversified portfolios, they behave differently than large-cap stocks. The study examined the existence of size premiums in the United States, emphasizing the historical performance of Fama/French U.S. Small and Large Cap portfolios. The findings show that since the 1920s, small-cap stocks have outperformed large-cap stocks. Another research by Invesco in 2020 revealed that small caps have outpaced large caps from the past four recessions in all but one of the following 1- and 3-year periods. To decide which small-cap stock is right for you, it is pertinent to monitor closely not only the stock itself but also its peers, as it provides a bigger picture. The factors that are crucial in the choice you make include the liquidity position, sensitivity to market swings, financial stability, and connection to AI. The stocks that we have selected are among the ones yielding high upside potential across a range of industries like financial, food, and mining. We have used Finviz and Stock Analysis screeners to select ten stocks with market capitalizations between $300 million and $2 billion. The one-year price targets have been extracted from Yahoo Finance to calculate the upside potential based on the stocks' prices as of March 28, 2025. These companies are then listed according to their upside potential. At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (). An employee of the grocery store happily decorating doughnuts with colorful icing. Upside Potential: 129% Market Capitalization: $851.5 million Krispy Kreme, Inc. (NASDAQ:DNUT) is an American multinational retailer and wholesaler of a variety of doughnuts, including glazed, iced, and filled doughnuts. The giant also offers beverages and ice creams, along with catering and delivery services across the United States, Asia, and Europe. The company is focused on delivering the most awesome doughnuts on the planet daily. It is one of the best stocks with the biggest upside. Ever since the partnership with fast food giant McDonald's Corporation broke the news, the stock has been of interest to many investors. As per its recent earnings report, Krispy Kreme, Inc. (NASDAQ:DNUT)'s Points of Access ('PoAs') grew around 34% year-over-year during the last quarter of FY2024 and 59% over a span of two years, standing at 9,951 within the U.S. alone. By FY2026, the company aims to reach as high as 15,000 PoAs, with McDonald's hosting around 40%. Not only this, Krispy Kreme, Inc. (NASDAQ:DNUT) has made significant advancements in recent years, from divesting a majority stake in Insomnia Cookies to expanding with national distribution partners. Joshua Charlesworth, the President and CEO of DNUT, made the following comment in this regard: 'In 2025, we expect to continue our U.S. expansion with national partners, both existing and new. For example, Costco. An added benefit of this expansion with national partners is the opportunity to identify and close existing underperforming doors, which we expect to do in 2025.' This statement is reinforced by the company's expansion to Brazil in partnership with Ipiranga's AmPm, using a capital-light franchise strategy. This collaboration is seen as a key step forward in what could be a sweet spot in the market. Considering this, analysts have one-year price targets of $17.50 and $6 on the higher and lower ends, respectively. This makes it a stock with the biggest upside potential. Overall, DNUT ranks 5th on our list of small cap stocks with huge upside potential. While we acknowledge the potential of DNUT, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than DNUT but that trades at less than 5 times its earnings, check out our report about this . READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
