Investing in small-cap stocks to turn $5K into $100K may seem like a pipe dream. This is because an overwhelming majority of small cap companies remain unprofitable. However, a segment of best in-class small-cap stocks holds tremendous potential.
While these stocks can be more volatile and less liquid than their larger counterparts, they present unique opportunities for growth-oriented investors. These companies have their own unique characteristics and are well positioned for revenue and EPS growth over the next decade. However, investors should approach these stocks with caution and only invest what they can afford to lose potentially.
Let’s discuss the three best small-cap stocks to turn $5K into $100K by 2030.
ACM Research (ACMR)
ACM Research (NASDAQ:ACMR) is one of the leading small-cap stocks to buy in 2024. They are a leading wafer packaging and cleaning company for the semiconductor industry that is set to benefit from the rising demand for generative AI offerings.
ACM Research’s cutting edge technology is pivotal in enhancing the performance and reliability of integrated circuits (ICs). One of their flagship products is the Space Alternated Phase Shift (SAPS), which uses advanced megasonic waves to efficiently clean semiconductor wafers. This technology has gained widespread recognition and has contributed to the company’s accelerated revenue growth over the last five years.
One of the key drivers of growth has been the strength of its multi-product portfolio and growing customer base. In FY23, ACM’s revenue increased 43% YOY to $558 million. EPS skyrocketed nearly 100% to $1.16 per share, with operating margin expanding by 200 bps. Their leading cleaning products show 48% growth from the prior year amidst the wafer fabrication market slowdown. With CEO David Wang expected to build on momentum in 2024, ACM remains one of the top small-cap stocks to turn $5K into $100K by 2030.
Axcelis Technologies (ACLS)
Axcelis Technologies (NASDAQ:ACLS) has established itself as a key player in developing and producing advanced semiconductor devices. The company’s ion implantation solutions are integral to fabrication, enabling semiconductor manufacturers to precisely implant ions into wafers.
Axcelis has continued to see growth in revenue and earnings over the last several years. This has been largely driven by the demand for their ion implantation platform. Their Purion platform is a series of high-energy and high-current implantation systems used to cater to the diverse needs of semiconductor manufacturers. Furthermore, AxcElis is set to benefit from the long term tailwinds of AI and silicon carbide modules.
In FY23, Axcelis saw record revenue of $1.13 billion. EPS increased 36% YOY to $7.43 per share, with operating margin remaining robust. The company saw continued growth from the Purion Power Series product line while maintaining a year-end systems backlog of $1.2 billion. Although revenue will be flat in the 2024 fiscal year, industry fundamentals support growth beyond 2025.
Sterling Infrastructure (STRL)
Sterling Infrastructure (NASDAQ:STRL) has continued to deliver strong operational performance even during the slowdown in construction activity in 2023. They delivered record revenue, EPS and FCF and have been key players in private and public construction projects.
Sterling Infrastructure’s portfolio spans a diverse range of ventures, including highways, bridges, roads, airports and data centers. What separates them from their competition is the management’s multiple decades of combined experience. The team consists of seasoned professionals from energy, asset management, private equity and infrastructure. Sterling recently continues to win new contracts, and its E-Infrastructure Solutions business continues to gain significant momentum.
In FY23, revenue increased 11% YOY to $1.97 billion. Net income rose to $138.7 billion, or $4.44 per share. The fourth quarter also saw impressive growth, with adjusted EPS nearly doubling from Q4 2022. Sterling closed out the 2023 fiscal year with a record backlog of $2 billion and remains optimistic about delivering strong cash flows in 2024. CEO Joe Cutillo forecasts another strong year of bottom line growth in 2024, making STRL stock one of the top small-cap stocks to buy.
On the date of publication, Terel Miles did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
