InvestorPlace Markets analyst highlights three small caps poised for a comeback in 2025

Evolv, which makes AI-powered security scanners, could benefit in 2025 from the new administration in Washington / Photo: Evolv

Thomas Yeung, an analyst at InvestorPlace Markets, has named three retreating small-cap stocks that he believes are poised for a turnaround in 2025. Two of the companies could benefit from the new administration of President-elect Donald Trump, while the third stands to gain from the trend of automation.

Stratasys

Stratasys, with a dual U.S.-Israeli headquarters and a market capitalization of $665 million, produces industrial 3D printers, polymer materials, software, and components. Its shares have plummeted almost 32% for the year to date and are quoted currently at $9.87 per share. However, on November 13, the stock surged 18% after the company announced a surprise third-quarter profit of $400,000, or $0.01 per share, citing cost-cutting measures as a key factor.

Stratasys now expects adjusted full-year earnings of $0.03-$0.07 per share, up from its previous guidance of $0.01-$0.05 per share. InvestorPlace Markets’ Yeung forecasts a significant jump in the top line in 2025, to $26 million — a tenfold increase. This has room to improve further if President-elect Trump imposes higher tariffs, as promised, and pushes U.S. manufacturers to source parts domestically.

According to MarketWatch, the seven analysts who cover Stratssys have an average target price of $11.80 per share, implying nearly 20% upside.

Evolv Technologies Holdings

Evolv Technologies, a maker of AI-powered security scanners with a market capitalization of $486.6 million, saw its stock price roughly halve in the autumn of 2024. The losses followed the company’s announcement of an internal investigation of inappropriately logged revenues. Shortly after, Evolv abruptly dismissed CEO Peter George without explanation, followed by the departures of CFO and Chief Accounting Officer Mark Donohue.

Yeung sees this dip as a buying opportunity. Evolv’s scanners can detect concealed weapons faster than traditional systems, allowing people to pass through without emptying their pockets. Yeung thinks the Trump administration is likely to challenge concealed carry bans in some states, which could boost demand for Evolv products.

UiPath Inc.

Since its IPO in April 2021, UiPath, which develops business automation platforms, has seen its stock price plunge nearly 80%. On Monday, November 25, the shares closed at $14.50 per share, for a market capitalization of $7.83 billion.

UiPath has struggled to sustain the momentum it gained during the COVID-19 pandemic and the remote work boom, explains Yeung. Looking ahead, however, he expects growth to accelerate in 2025 as companies increasingly turn to AI to cut costs. Businesses will need platforms like UiPath to implement these solutions. Another factor that could drive growth for UiPath is the increasing intelligence of AI systems. Yeung points out that the latest model from OpenAI has already outperformed the average human on the IQ test.

According to MarketWatch, the 24 analysts covering UiPath have an average target price of $15.60 per share.