As we enter the new year, investors are looking for opportunities in small-cap stocks that have been gaining momentum in recent times. Global Advisors’ managing partner, Tom Lee, recently shared his thoughts on the potential of small and mid-cap stocks in 2025. According to Lee, the upcoming year is expected to be a good time for these types of companies.
Interest Rate Cuts and Expansionary Companies
Lee pointed out that interest rate cuts will likely continue to benefit small and mid-cap companies. Additionally, with the incoming administration, companies are expected to feel more confident about mergers and acquisitions. This confidence is expected to lead to an increase in expansionary activities among these companies.
Small-Cap Stocks Trading at a Discount
Lee has also emphasized that small-cap stocks are trading at a discount compared to their large-cap counterparts. With a medium P/E multiple of 10, these stocks offer a attractive entry point for investors. In an interview with CNBC, Lee stated: "I think small caps could in the next couple of years outperform by more than 100%."
New Street Advisors CEO Delano Saporu’s Views
Delano Saporu, CEO of New Street Advisors, shares a similar optimistic view on small-cap stocks. According to Saporu, the economy has shown resilience in 2024, especially with the recovery in the last quarter signaling a promising outlook for businesses. Donald Trump’s win has already driven significant gains in small-cap stocks amid the growing enthusiasm around potential easing of regulations on businesses.
Why Small-Cap Stocks Are Better Equipped to Handle Tariffs
Small-cap stocks are conventionally focused on the domestic market, with less exposure to international trade compared to large-cap counterparts. Therefore, Trump’s tariff policies will not have a major impact on small-cap stocks compared to large-cap stocks.
US Stock Market Outlook for 2025
Heading into 2025, the US stock market is expected to deliver another impressive year of gains. The S&P 500 index surged more than 25% in 2024, while the tech-heavy Nasdaq 100 jumped up to 28%. The Russell 2000 index, which covers small-cap companies, soared more than 15% over the last year, while the Dow Jones U.S. Small-Cap Index has risen by 18%.
Apollo Global Management’s 2025 Economic Outlook
Torsten Slok, economist at Apollo Global Management (APO), released his 2025 economic outlook for the US. According to Slok, the US economy will deliver strong results with no signs of major slowing in 2025. Slok added that interest rates will likely stay ‘higher for longer’ despite the Fed’s current interest rate-cutting cycle.
US Economy Expected to Register GDP Growth of 2.2%
The US economy is expected to register GDP growth of 2.2% in 2025, signaling a modest growth driven by less restrictive monetary policy, resilient consumer spending, and a steadying labor market.
Why Elevation Oncology, Inc. (NASDAQ:ELEV) Is Among the Best Penny Stocks To Invest In
Elevation Oncology, Inc. (NASDAQ:ELEV) is a US-based oncology company that is engaged in the development of targeted therapeutics for cancer treatment. The company’s specialty lies in selective cancer therapies to treat patients across a range of solid tumors.
Our Methodology
To compile our list of the best penny stocks to invest in according to the media, we gathered over 50 penny stocks from financial media websites on the internet. We then selected the top 12 penny stocks that were the most widely held by hedge funds and other institutional investors.
ELEV’s Pipeline and Products
Elevation Oncology’s main products have cleared initial FDA approvals and are showing promising results in their initial research phases. The company is advancing its pipeline with the nomination of poziotinib for FDA approval. If poziotinib advances to the FDA’s final approval, it could become a unique treatment for a specific type of bladder cancer, presenting a massive growth opportunity for the company.
Why ELEV Ranks 11th on Our List
While we acknowledge the potential of ELEV to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ELEV but trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Read Next:
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- 30 Most Important AI Stocks According to BlackRock
**Disclosure: None. This article is originally published at Insider Monkey.
