What Small-Cap Stocks Could Explode This Year?

If you’ve been tracking the market this year, you’ve probably noticed a renewed buzz around small-cap and penny stocks. These low-priced shares—typically trading under $5—often come from smaller, lesser-known companies that can soar on the back of strong news or technical breakouts.

While they’re considered riskier due to limited liquidity and volatility, the potential upside can be massive for those who know how to spot momentum early. In 2025, certain small-cap stocks have already started flashing bullish signals, suggesting that a few might be on the verge of explosive growth.

In this guide, we’ll break down five promising small-cap stocks, explain how they were selected, and explore smart strategies for managing risk while trading these fast-moving assets.

What Are Penny Stocks and Small-Cap Stocks?

Let’s start with the basics.

A penny stock is any publicly traded company whose shares trade for under $5, according to the SEC. These companies typically have smaller market capitalizations (under $300 million) and lower trading volumes than blue-chip firms like Apple or Microsoft.

Because of this, penny stocks are more volatile—their prices can move dramatically in a short time based on investor sentiment, volume surges, or even a single news event.

However, not all small-cap stocks are pure speculation. Some represent real businesses with growing revenues, patented technologies, or niche market advantages that could help them scale quickly.

Top Small-Cap Stocks That Could Explode in 2025

Below are five small-cap stocks currently showing bullish technical setups and improving investor sentiment. Each has been screened using specific volume, price, and pattern criteria to filter out weaker candidates.

1. ADC Therapeutics SA (ADCT)

• Price: $2.50
• One-Month Return: 88.0%
• Average Volume: 568,000
• Exchange: NYSE

Company Snapshot:
Based in Switzerland, ADC Therapeutics focuses on antibody-drug conjugates (ADCs)—targeted cancer therapies that deliver powerful drugs directly to tumor cells.

Technical Setup:
After rallying from $0.36 to $5.68 last year, ADCT entered a consolidation phase, forming what looks like a bull flag pattern. In April, it set a higher low around $1.05, signaling renewed buying pressure.

Recently, the stock reclaimed its 20-week moving average and is now testing the 50-week line—often a crucial level for confirming longer-term reversals.

Breakout Level: $3.49
Bullish Target: Around $6 if the pattern confirms

Expert Take:
If momentum continues in biotech, ADCT could become a key small-cap biotech play to watch this quarter.

3. Society Pass Incorporated (SOPA)

• Price: $1.59
• One-Month Return: 71.9%
• Average Volume: 1.3 million
• Exchange: Nasdaq

Company Snapshot:
Society Pass operates a loyalty and e-commerce ecosystem focused on Southeast Asia—one of the fastest-growing digital economies in the world.

Technical Setup:
SOPA hit a low of $0.64 in April before bouncing strongly, forming a bullish hammer candlestick—a pattern that often signals the end of a downtrend. It has since broken above its long-term downtrend and key moving averages (20-week and 50-week).

Breakout Level: $2.00
Potential Target: Retest of the previous high near $6.76

Case Study Insight:
In 2021, SOPA experienced a similar technical setup before tripling in price over three months—a reminder of how powerful small-cap rebounds can be.

4. Intrusion Inc. (INTZ)

• Price: $1.44
• One-Month Return: 14.3%
• Average Volume: 331,000
• Exchange: Nasdaq

Company Snapshot:
Based in Texas, Intrusion Inc. provides cybersecurity solutions for enterprise and government clients. Its proprietary AI-driven intrusion detection technology aims to stop cyberattacks in real time.

Technical Setup:
Earlier in 2025, INTZ rallied nearly 2,000% from $0.35 to $7.34—a staggering move even for penny stocks. The stock has since cooled off but recently reclaimed its 50-week moving average, and its 20-week average just crossed above it, signaling bullish momentum.

A double-bottom pattern appears to be forming, with a breakout confirmation above $1.55.

Breakout Level: $1.55
Potential Target: $3–$4 zone

Pro Tip:
Cybersecurity remains one of the hottest long-term sectors, supported by increasing digital threats and government spending.

Also Read: What Does Market Cap Mean in Investing?

5. Personalis, Inc. (PSNL)

• Price: $4.69
• One-Month Return: 22.1%
• Average Volume: 743,500
• Exchange: Nasdaq

Company Snapshot:
Personalis focuses on genomics and precision oncology, offering sequencing and data analysis tools that support personalized cancer therapies.

Technical Setup:
PSNL’s chart shows a falling wedge pattern—a formation that often precedes strong bullish reversals. Resistance levels at $5.16 (200-week moving average) and $5.61 (previous swing high) are critical.

Breakout Level: $5.61
Potential Target: Above $8 if momentum builds

Expert Opinion:
With growing demand for precision medicine, Personalis could benefit from both industry tailwinds and potential M&A activity in biotech.

How We Selected These Stocks

These five picks weren’t chosen randomly. Each met specific screening criteria to identify quality setups rather than pure speculation:

Criteria	Requirement
Share Price	Above $1.50
Average 30-Day Volume	200,000+ shares
Trading History	Minimum 2 years
Trend	Positive 1-month return
Technical Setup	Bullish breakout or reversal pattern

By focusing on liquid, exchange-listed stocks (Nasdaq or NYSE), this list avoids the riskiest over-the-counter (OTC) names while still capturing strong upside potential.

Also Read: Should You Pay Off Debt or Invest First?

Pros and Cons of Investing in Penny Stocks

Pros	Cons
Low price = high growth potential	High volatility and big swings
Early access to emerging companies	Harder to find reliable data
Can multiply quickly with catalysts	Risk of delisting or dilution

Expert Tip:
If you’re new to penny stocks, limit exposure to no more than 5–10% of your total portfolio. Use stop-loss orders and always trade with a clear plan.

Actionable Tips for Trading Small-Cap Stocks

1. Follow the Volume – Rising trading volume often confirms real momentum.
2. Use Technical Indicators – Watch for moving average crossovers, RSI divergences, or breakout levels.
3. Avoid the Hype – Don’t buy solely on social media chatter; check fundamentals.
4. Set Clear Entry and Exit Points – Stick to your plan and avoid emotional decisions.
5. Diversify – Hold several small-cap positions rather than going all-in on one name.

For further reading, see resources like Investopedia’s Guide on Penny Stocks or FINRA’s investor alerts on high-risk trading.

Real-World Example: From Penny to Powerhouse

A classic case of a small-cap breakout is Plug Power (PLUG). In early 2020, it traded under $5 before skyrocketing to over $70 as clean energy investing gained traction.

While not every penny stock follows this trajectory, examples like this show how small companies can become major players when timing, innovation, and investor sentiment align.

Also Read: How Did Tech Stocks React to the Recent Earnings Reports?

Final Thoughts: Small-Caps Worth Watching in 2025

• Small-cap stocks remain one of the most exciting yet risky corners of the market. While volatility is part of the game, so is the opportunity for life-changing gains when you identify trends early.
• By focusing on technically strong setups, liquid tickers, and exchange-listed names, investors can balance risk and reward while exploring this high-growth segment.
• Whether it’s biotech innovators like ADC Therapeutics or digital disruptors like Lottery.com, 2025 could be a breakout year for selective small-cap plays.
• Always remember: invest only what you can afford to lose, diversify across sectors, and stay disciplined.

FAQs About Small-Cap Stocks