Small-cap stocks have been inching up in recent sessions but there are a bunch of names that are still trading at a significant discount.

These stocks are all the more attractive to own ahead of Trump’s inauguration on January 20^th.

Why? Because the incoming government is broadly expected to take a pro-business stance that tends to help small-cap stocks.

Having said that, here are the top 3 small-cap stocks that are currently cheap to own.

Bath & Body Works Inc (NYSE: BBWI)

Bath & Body Works stock has been in a sharp uptrend over the past two months but TD Cowen analysts continue to see further upside in it through the rest of 2025.

The investment firm recently dubbed the small-cap specialty retailer an “underappreciated story” as it’s strongly positioned for earnings upside on the back of continued expansion outside of shopping malls.

Analyst Jonna Kim expects BBWI to benefit from marketing initiatives and the loyalty program as well.

“Candles and sanitizer category overhang is starting to abate and international sales are being less of a drag,” she added in a recent research note.  

Kim even went on to call Bath & Body Works stock the best idea for 2025 in her note to clients as it’s undervalued compared to its growth and margin profile at writing.

Alaska Air Group Inc (NYSE: ALK)

Morgan Stanley analyst Ravi Shanker dubs Alaska Airlines stock a top pick for 2025 even though it has more than doubled already since early August.

The company’s $1.9 billion acquisition of Hawaiian Airlines last year will serve as a meaningful catalyst for growth over the long term, he argued in a note to clients.  

We like this opportunity from the HA integration, which has evolved into a transformation of both Airlines to embark on a path to become the next intercontinental mainline carrier.

Shanker likes Alaska Airlines shares at current levels also because the small-cap air carrier will see significantly easier comps this year and has a sizeable $1.0 billion buyback planned as well.

Academy Sports and Outdoors Inc (NASDAQ: ASO)

Academy Sports and Outdoors is different from the other two small-cap stocks on this list as it’s lost 30% since March of 2024.

But the small-cap chain of sporting goods stores now offers favorable risk-reward that makes its shares worth buying this year, according to Citi analyst Paul Lejuez.

“We see signs of comps pressure abating in F25 driven by a recovery in several pandemic categories … and a tailwind from new stores entering the comp base,” he told clients in a recent report.

Lejuez sees significant room for square footage growth ahead that he’s convinced will help unlock further upside in sales for ASO in 2025.

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Cathie Wood’s exchange-traded funds have not done well over time. The flagship ARK Innovation Fund (ARKK) has continued to underperform the broad market in the past few years as some of its prominent stocks crashed. Still, her portfolio has some good quality companies. 

Top Cathie Wood stocks to buy

Some of the best Cathie Woods stocks to buy and hold are Robinhood, Palantir Technologies, SoFi, Shopify, and Archer Aviation. 

Robinhood (HOOD)

Robinhood is a top disruptor in the financial services industry. It introduced the concept of commission-free trading and, most recently, 24-hour trading. The firm also announced a decision to acquire Bitstamp, a leading player in the crypto exchange industry. 

Robinhood stock has done well over the years. It has surged by over 350% in the last 12 months, a trend that may continue in the coming years as demand for its services rise. Also, the Trump administration will likely help it to maintain its business model of making money from market makers.

Robinhood’s annual revenue is expected to be $2.83 billion, a 51% increase from 2023. Its 2025 revenue will be $3.32 billion, while its earnings per share (EPS) will grow from $1.27 in 2024 to $1.44. Most analysts have a bullish view of the stock.

Read more: Robinhood stock price has a 42% upside but faces key risks

Palantir Technologies (PLTR)

Palantir Technologies is another top Cathie Wood stock to buy and hold. It is a technology company offering software solutions to companies and the government. Most recently, its business has become a leading player in the artificial intelligence industry, which has helped its stock to jump by 337% in the last 12 months. 

Palantir’s business has continued growing, with most of this performance coming from corporate clients instead of the government. Analysts predict that its annual revenue will grow to $2.8 billion in 2024 followed by $3.50 billion in 2025. The company has also become highly profitable.

Palantir stock has two potential risks. First, there are signs that it is highly overvalued, with the current stock of $77 being higher than the average analyst estimate of $45. Second, there is a risk that AI stocks will reverse as the industry growth fades.

Read more: Is there a good reason to buy Cathie Wood’s ARKK ETF?

SoFi (SOFI)

SoFi is another top Cathie Wood stock to consider. It is a leading company that has become a popular name in the financial services industry. It has received a banking license, which helps it to offer numerous services like loans, insurance, and investment solutions. 

SoFi’s business has done well over the years as its annual revenue has grown from $442 million in 2019 to $2.06 billion last year. It has also started to make a profit, with the annual earnings per share (EPS) expected to move to 12 cents in 2024 and 25 cents in 2025. 

Read more: SoFi stock hits new high of $14.42: is it time to take profits?

Shopify (SHOP)

Shopify is another top Cathie Wood stock because of its strong performance and market share. It has grown to become the biggest provider of e-commerce technology solutions globally. 

Shopify makes money through subscriptions from many stores it hosts. It also makes cash through card rates, shipping rates, advertising, and tax issues. 

Shopify’s business has grown as its revenue jumped from $1.57 billion to $1.57 billion to $7 billion in 2023. Analysts expect that its 2024 revenue will be $8.8 billion, followed by $10.8 billion in 2025. It has also become a more profitable company. Shopify stock is also fairly undervalued. Its target price is $121, higher than the current $103.35. 

Archer Aviation (ACHR)

Archer Aviation is another high-risk, high-reward Cathie Wood stock to buy. It is a leading company seeking to become the biggest player in the electric vertical takeoff and liftoff (EVTOL) industry.

Archer and Joby Aviation will likely be the biggest companies in the industry. They are nearing approvals from regulators, have raised millions of dollars, and have solid partners. Archer has received financing from Stellantis, and big orders from United Airlines. As such, the stock may continue doing well over time.

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The Corsair Gaming stock price has pulled back in the past few years as the gaming industry went through a substantial slowdown. It initially peaked at $51.3 in 2021 as the sector boomed because of the pandemic and then pulled back to an all-time low of $5.50 in September last year. So, is the CRSR stock a good contrarian investment ahead of the gaming upgrade cycle?

Corsair Gaming’s business has struggled

Corsair Gaming is a popular company in the gaming industry that provides computer peripherals in the gaming industry. Its business includes PC components, gaming gear, gaming PCs, and gaming furniture. 

Corsair operates its business through several brands, including Drop, Elgato, Origin, Scuf, and Fanatek. These are all companies that became popular during the Covid-19 pandemic as many people stayed at home. 

Corsair’s business has gone through a rough patch as people went back to the office and schools. As a result, its annual revenue has dropped from over $1.7 billion in 2020 to $1.32 billion in the trailing twelve-month period. 

The most recent financial results showed that Corsair’s revenue dropped from $363 million in Q3’23 to $304.2 million in Q3’24. The nine-month revenue dropped from $1.04 billion in 2023 to $902 billion. 

This decline was mainly due to its gaming components and systems business, which was offset by the gamer and creator peripherals. The gaming components and systems’ revenue dropped from $272 million to $202 million, while the gross margin moved from 21.8% to 15.1%.

The gamer and creator peripherals revenue rose from $90.4 million to $102 million, while its gross margin moved from 33.1% to 38.3%. 

To be clear: other gaming companies that boomed during the pandemic have suffered a similar decline. For example, the revenue of AMD’s gaming segment has crashed by double digits in the last few quarters.

A potential catalyst for the CRSR stock

The Corsair Gaming stock price may bounce back because of the upcoming gaming PC upgrade cycle. Most users bought their gaming devices five years ago during the pandemic, meaning that they will start to upgrade them soon.

This upgrade will likely be powered by the recently launched NVIDIA 50 series release, which has already become popular among consumers. The series has more features, including artificial intelligence and neural rendering. Analysts expect Corsair’s revenue to grow from $1.29 billion in 2024 to $1.48 billion in 2023.

A recent report by Gartner showed that PC shipments rose by 1.4% in the fourth quarter, bringing the full-year growth to 1.3%. PC sales rose to over 262.7 million during the year.

IDC anticipates the industry to grow this year, led by the US and some European countries. Gartner also sees strong growth this year, reflecting delayed Windows 11 PC refresh demand. 

Still, Corsair Gaming and other companies may struggle if Donald Trump hits imports with large tariffs. That would hurt Corsair as it would make its already expensive products more costly to consumers.

Corsair Gaming stock price analysis

The weekly chart shows that the CRSR stock price has remained under pressure amid its business slowdown. It has crashed from $51 in 2021 to $8.32 today, moving below all moving averages. 

On the positive side, there are signs that the stock is going through an accumulation phase. It has also formed a falling wedge chart pattern, which often leads to a strong breakout. This recovery could push it to the next key resistance point at $20.7, its highest point on May 30th, up by 150% from the current level.

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Coinbase stock price has bounced back in the past two years, helped by the ongoing growth of the cryptocurrency industry. COIN bottomed at $31.80 in 2023 as the FTX crisis unfolded. It has now risen to $300, up by 842% from its 2023 lows, giving it a market cap of over $72 billion. The company may continue doing well this year as it faces substantial tailwinds. 

Coinbase stock faces tailwinds ahead

The COIN share price is poised to continue rising, helped by key tailwinds in the crypto industry. The most notable tailwind will be the upcoming changes at the Securities and Exchange Commission (SEC), where Paul Atkins will soon take over from Gary Gensler. 

Atkins is seen as a more crypto-friendly leader than Gensler, who ruled by enforcement as he sued numerous companies, including Coinbase. Most of the lawsuits were about companies that offered unregistered securities to their customers.

The SEC is now expected to review these changes and even put some of the enforcement actions on ice. Its goal is to help the US become the top cryptocurrency market in line with Donald Trump’s campaign pledges. 

Coinbase will also benefit from the potential crypto ETF approvals. Analysts predict that coins like XRP and Solana will have their ETFs approved this year, a move that JPMorgan analysts estimate would lead to over $14 billion in inflows. 

Coinbase has become the biggest crypto custodian in the industry, holding assets for companies like Grayscale and Blackrock. It will be the custodian for the upcoming crypto exchange-traded funds. 

Base Layer 2 as a catalyst

Further, the company is benefiting from its investments in Base Blockchain, a popular layer-2 scaling solution in the crypto industry. The blockchain has become the biggest layer-2 network in terms of developers and transactions. 

Base Blockchain now has 430 DeFi applications with a total value locked of $3.7 billion. Its bridged assets have jumped to over $15.97 billion, making it much bigger than popular layer-2 networks like Arbitrum and Polygon. 

Base has also become the third-biggest player in the DEX trading industry, as it handled over $5.3 billion in volume in the last 7 days. The biggest dApps in the network are Aerodrome Finance, Uniswap, PancakeSwap, and Sushi. 

Coinbase has also announced that it would start offering Bitcoin-backed loans through Morpho, a top lending protocol in the industry.

All this has made Base Blockchain a highly valuable brand. For example, Arbitrum, Polygon, and Optimism have a market cap of $3.37 billion, $4 billion, and $2.5 billion, respectively. That implies that Base is a multi-billion brand if Coinbase launches its airdrop.

Meanwhile, Coinbase is one of the biggest holders of Bitcoin. According to BitcoinTreasuries, the company owns 9,480 coins valued at over $993 million. These coins will likely become more valuable as they continue to rise. Bitcoin price has jumped to $105,000, and there are signs that the coin will continue soaring.

Analysts are optimistic that Coinbase, the biggest crypto exchange in the United States, will continue to perform well. The company’s revenue is estimated to be $5.8 billion in 2024 and $6.15 billion in 2025. Thus, the company will likely perform better than estimates as it has always done.

Coinbase stock price analysis

The daily chart shows that the COIN share price has surged in the past few years, moving from $31.80 in 2023 to $295 today. It recently moved above $283, the highest swing in March last year. 

Coinbase remains above all moving averages and the top of the trading range of the Murrey Math Lines indicator. Therefore, the stock will likely bounce back as bulls target last year’s high of $350, followed by the extreme overshoot at $440. 

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Warby Parker stock price has done well in the past few months, as we predicted in this piece in October. WRBY stock jumped to a high of $27 this month, up by 175% from its lowest level in 2024, pushing its value to over $3 billion. So, is the growing website traffic a good catalyst for WRBY?

Warby Parker’s website traffic is rising

Warby Parker is a leading company in the eyewear industry. It has simplified how people buy glasses. It was one of the first companies to take an online-first approach to an industry that many experts believed would not happen. 

The company succeeded by offering quality glasses at an affordable rate. Most of its products are priced at $95, whereas similar glasses from other companies cost hundreds or even thousands of dollars. 

Warby Parker also introduced free shipping and returns for its glasses, allowing people to test their glasses first. 

Therefore, one way to estimate whether Warby Parker’s business is doing well is to look at its website traffic, which has grown recently. According to SimilarWeb, traffic to its website rose by 16% in December to 4.36 million. 

Warby Parker has tweaked its business a bit in the past few years. The biggest change was to introduce retail stores, a move aimed at attracting customers afraid of buying glasses online. It now has hundreds of stores in the US and is hoping to add more of them in the next few months. 

These initiatives have increased the company’s revenue, which rose from $370 million in 2019 to $670 million in the last financial year. 

Most importantly, it now has a path to profitability as its net loss has narrowed from $144 million in 2021 to $32.6 million in the trailing twelve months. The management hopes that this will be the first profitable year

WRBY growth is continuing

The most recent results showed that Warby Parker was still seeing strong revenue growth in an industry where consumers are struggling. Its third-quarter revenue rose by 13.3% to $192 million as active customer growth rose by 5.6%.

Warby Parker’s growth is mainly due to the low cost of its glasses. However, its results show that many customers still pay for the more expensive glasses, which sell for $195. The average revenue per customer rose to $305 in the last quarter. 

More customers are buying on Warby Parker more than ever. Its TTM active customers rose to 2.43 million from 2.3 million a year earlier. 

Warby Parker’s annual revenue for 2024 will be between $765 million and $768 million, while its adjusted EBITDA will be $73 million. Analysts expect that its 2025 revenue will grow to $868 million, while its earnings per share (EPS) will move from 23 cents to 32 cents. 

Therefore, there is a possibility that the company will continue doing well in the next few years as it gains market share among young people. 

Warby Parker stock price analysis

WRBY chart by TradingView

The daily chart shows that the WRBY share price bottomed at $9.56 in March 2023 and then rebounded to $27 this year. It has recently formed a double-top chart pattern, a popular bearish reversal sign.

On the positive side, it has remained above the 50-day and 100-day moving averages, a positive sign. Therefore, the outlook for the stock is bullish, with the next point to watch being the psychological point at $30 followed by $35. This view will be confirmed if the stock rises above the year-to-date high of $27.

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