Top small cap stocks to watch in 2025

What are small-cap stocks?

Small cap stocks are the shares of companies with a market capitalisation of between US$250 million and US$2 billion.

They’re smaller than mid cap and large cap companies, and often represent businesses in the early stages of their growth – and those in emerging industries.

Advantages of small-cap stocks

There are numerous pros to stock trading small cap shares. Here are a few of the more important ones:

• Growth potential: smaller companies have greater room for expansion
• Diversification: small cap businesses tend to operate in up-and-coming sectors, offering stock traders a good way to diversify their portfolios. This also means you have access to innovation
• Potentially higher returns: small cap stocks can be a high-risk, high-return strategy
• Undervalued opportunities: because analysts and institutional investors tend to spend less time looking at small cap stocks compared to larger ones, you might find a good opportunity with an undervalued stock

Disadvantages of small-cap stocks

There aren’t just benefits to stock trading small cap shares. Here are some of the pitfalls to watch out for:

• Higher volatility: unlike their larger, more established counterparts, small cap stocks tend to be quite a lot more volatile. This is often due to their limited resources, so what they choose to spend these on greatly affects their performance and share price
• High risk: because they’re not yet established, small cap stocks pose a higher risk for stock traders
• Lower liquidity: small cap shares tend to be stock traded less, which makes them less liquid than larger companies 

Top 5 small-cap stocks to watch in 2025

We’ve chosen our five stocks to stretch across sectors – technology design and manufacturing, online gaming, AI, analytics and satellite imagery, as well as for:

• Expansion and evolution into new markets, indicating excellent potential for future growth
• High-growth sectors, such as AI
• Long-term contracts that provide recurring business – offering some degree of predictability in cash flow
• Companies in sectors that can withstand economic downturns

Overview of the stocks in this article

Of the five stocks in this article, Filtronic plc and Amplitude are available to trade via CFDs with IG UAE.

Filtronic plc, Aeva Technologies, Amplitude and BlackSky Technology are available to trade via non-leveraged stock trading with IG UAE.

All facts and figures are accurate as of 26 October 2025.

1. Filtronic plc (LSE: FTC)

Industry: Electronic technology

Market cap: £305.47 million¹

Filtronic plc is a UK-based designer and manufacturer of advanced radio frequency (RF), microwave and millimetre-wave components used in telecoms, defence and aerospace applications. Its technology helps transmit and receive high-frequency signals – the backbone of 5G infrastructure, satellite communications and radar systems.

The company has carved out a niche in high-performance engineering, specialising in products that operate in extreme conditions and high-bandwidth environments.

With the ongoing rollout of 5G networks, growing demand for satellite connectivity, and the rise of next-gen radar systems, Filtronic is positioned at the intersection of several fast-evolving technologies.

Why stock traders might like it:
Filtronic offers exposure to the high-growth communications and aerospace sectors without the heavy valuations of large tech companies. Its strong engineering IP and long-term contracts give it stable revenue potential, while its manageable size means room for continued expansion.

Why CFD traders might like it:
The stock tends to react sharply to contract announcements and trading updates, creating short-term opportunities. Its listing on the AIM market means lower liquidity and higher volatility – traits that can favour active traders but add risk.

Highlights:

• For cautious stock traders, Filtronic offers an innovative, defensible business in a growing tech niche; for traders, it provides price movements linked to sector momentum and news catalysts
• YTD performance has shown an 82.89% increase in the stock price²

2. Nazara Technologies (NSE: NAZARA)

Industry: Online gaming

Market cap: ₹99.40 billion³

Nazara Technologies is a leading Indian gaming and esports company, operating across mobile gaming, interactive learning and sports media.

What makes Nazara stand out is its ability to tap into India’s booming digital entertainment market. The country’s fast-growing young population, improved smartphone access and inexpensive data have created a massive audience for online gaming. Nazara has capitalised on this with a portfolio of localised games and international acquisitions in esports and learning tech.

In 2025, Nazara’s share price has gained momentum as revenues from its gaming and esports divisions climb, supported by a broader industry tailwind. Its diversified model – spanning subscription-based content, advertising and partnerships – gives it multiple growth avenues while keeping risk in check.

Why stock traders might like it:
Nazara is an early leader in an industry expected to expand rapidly over the next decade. Its strong local brand, presence in high-growth digital segments and exposure to India’s demographic advantage make it a compelling long-term growth story.

Why CFD traders might like it:
Nazara’s shares can be volatile, driven by quarterly results, new game releases and sentiment around India’s tech sector. For short-term traders, these swings provide trading opportunities, though liquidity can vary compared to larger Indian tech names.

Highlights:

• Nazara combines tech innovation with a strong regional focus, ideal for stock traders seeking emerging-market digital growth – and for CFD traders watching momentum in Asia’s gaming sector
• It’s seen a respectable stock price growth of 6.48% over the YTD⁴

3. Aeva Technologies, Inc (Nasdaq: AEVA)

Industry: Autonomous and driver-assisted sensor systems

Market cap: US$972.78 million⁵

Aeva Technologies develops cutting-edge LiDAR (Light Detection and Ranging) sensors used in autonomous vehicles and advanced driver-assistance systems. Based in California, the company’s technology enables vehicles and machines to ‘see’ the world around them in 3D, crucial for safety and navigation.

What differentiates Aeva from other LiDAR players is its proprietary ‘4D LiDAR’ technology, which captures not just spatial data but also velocity information, improving object detection accuracy. Aeva’s products are being integrated into automotive, industrial automation and robotics systems, giving it a broad market scope.

Why stock traders might like it:
Aeva represents a pure play on the future of autonomous technology. Though not yet profitable, it’s innovating in a space with vast long-term potential, especially as AI and automation reshape transportation and manufacturing.

Why CFD traders might like it:
The stock’s relatively low price and sensitivity to news, such as partnership announcements or product milestones, make it an active trading opportunity. However, volatility can be high, so disciplined risk management is key.

Highlights:

• Aeva suits stock traders looking for exposure to transformative tech, while CFD traders can benefit from strong price movements tied to innovation headlines
• Aeva’s share price has been climbing in 2025 as investors regain confidence in the LiDAR sector, driven by renewed interest in autonomous driving and AI-powered sensing
• It’s had an almost-unbelievable stock price gain of 255.35% in the YTD⁶

4. Amplitude, Inc (Nasdaq: AMPL)

Industry: Analytics services

Market cap: US$1.34 billion⁷

Amplitude is a US-based software company with an analytics platform that tracks how users interact with digital products, such as apps and websites, helping companies improve engagement and retention.

In today’s data-driven world, Amplitude plays a crucial role in helping companies turn user behaviour into growth insights. Its tools are used by major tech companies, retailers and digital platforms to optimise customer experiences, making it a vital part of the digital economy’s infrastructure.

After a challenging 2023, Amplitude’s share price rebounded through 2024 and 2025 as it expanded its customer base and improved profitability. The shift towards AI-driven analytics and product intelligence has made its offerings increasingly valuable to enterprises seeking competitive advantage.

Why stock traders might like it:
Amplitude combines steady recurring revenue with growing demand for digital analytics. It offers exposure to the broader data and AI trend at a small-cap valuation, appealing to those seeking long-term compounding growth.

Why CFD traders might like it:
AMPL often moves sharply on earnings reports and software-sector sentiment. Its volatility creates opportunities for short-term trades, though traders should be mindful of low liquidity at times.

Highlights:

• For stock traders, Amplitude offers sustainable growth through innovation in analytics; for traders, it’s a responsive tech stock tied to broader market momentum
• Its stock price has declined by 5.23% in the YTD, but the past six months has seen an increase of 15.75%. The biggest dip in value happened in April 2025, where the stock price plummeted to US$7.71⁸

5. BlackSky Technology Inc (NYSE: BKSY)

Industry: Satellite imagery and geospatial intelligence

Market cap: US$838.38 million⁹

BlackSky Technology is a US company specialising in real-time satellite imagery and AI-driven geospatial intelligence. Its network of small satellites provides rapid, repeatable images of Earth, used for defence, environmental monitoring and commercial applications.

What makes BlackSky innovative is its ability to combine frequent imaging with machine learning analytics. Clients, including government agencies and private companies, rely on its platform for situational awareness, logistics and risk management.

In 2025, the company has seen positive share price momentum thanks to rising demand for real-time data and new defence contracts. With geopolitical tensions and climate monitoring becoming key priorities, BlackSky’s capabilities are increasingly relevant.

Why investors might like it:
BlackSky operates in a high-barrier, high-growth niche at the intersection of space tech and AI. Its recurring data-as-a-service model and strategic government relationships give it strong long-term potential.

Why CFD traders might like it:
The stock is volatile, reacting to contract wins, satellite launches and sector sentiment. That volatility, coupled with news-driven moves, creates opportunities for traders seeking short-term positions.

Highlights:

• BlackSky offers stock traders a unique entry into commercial space intelligence, while traders can enjoy a fast-moving stock influenced by both tech and defence headlines
• The stock price has gained 118.69% YTD¹⁰

How to trade small-cap stocks with IG UAE

CFDs

1. Open a CFD trading account with IG UAE
2. Search for small-cap stocks on the IG platform
3. Decide whether to go long (buy) or short (sell)
4. Choose your position size
5. Set stop-loss and limit orders
6. Place your trade and monitor it

Stock trading

1. Open a stock trading account with IG UAE
2. Search for small-cap stocks
3. Choose the stock you want to buy – try our stock screener
4. Determine how many shares you want to purchase
5. Place your order
6. Monitor your investment and collect any dividends

FAQs about small-cap stocks

Footnotes
 

1. TradingView, October 2025
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10. TradingView, October 2025