The year 2025 promises to be a significant one for small and mid-cap stocks, with several market experts predicting a strong performance from these companies.
According to Tom Lee, the managing partner of Global Advisors, 2025 will be a good year for small and mid-cap stocks due to interest rate cuts and the incoming administration. In an interview with CNBC, Lee stated: "I think small caps could in the next couple of years outperform by more than 100%."
Lee’s prediction is backed up by New Street Advisors CEO Delano Saporu, who believes that small-cap stocks are well-positioned to outperform in 2025. The economy has shown resilience in 2024, especially in the last quarter, signaling a promising outlook for businesses.
Donald Trump’s win has already driven significant gains in small-cap stocks amid growing enthusiasm around potential easing of regulations on businesses. Small-cap stocks are conventionally focused on the domestic market with less exposure to international trade compared to large-cap counterparts. Therefore, Trump’s tariff policies will not have a major impact on small-cap stocks compared to large-cap stocks.
If you’re interested in exploring the best penny stocks to buy in 2025, we recommend checking out our article: 10 Best Penny Stocks to Buy for 2025.
US Stock Market Outlook for 2025
Heading into 2025, the US stock market is expected to deliver a second consecutive year of impressive gains. The S&P 500 index surged more than 25% in 2024, while the tech-heavy Nasdaq 100 jumped up to 28%. The Russell 2000 index, which covers small-cap companies, soared more than 15% over the last year, and the Dow Jones U.S. Small-Cap Index has risen by 18%.
Torsten Slok, economist at Apollo Global Management (APO), released his 2025 economic outlook for the US. According to Slok, the US economy will deliver strong results with no signs of major slowing in 2025. Slok added that interest rates will likely stay ‘higher for longer’ despite the Fed’s current interest rate-cutting cycle.
The US economy is expected to register GDP growth of 2.2% in 2025, signaling a modest growth driven by less restrictive monetary policy, resilient consumer spending, and a steadying labor market.
Why Invivyd, Inc. (NASDAQ:IVVD) Is Among the Best Penny Stocks To Invest In According to Media?
Invivyd, Inc. (NASDAQ:IVVD) is a commercial-stage biopharmaceutical company that has been gaining attention from investors due to its promising pipeline of treatments for infectious diseases.
According to our methodology, we compiled a list of the top 12 penny stocks held by hedge funds as of Q3 2024. Invivyd, Inc. (NASDAQ:IVVD) ranks 10th on our list with 16 hedge fund holders.
Our research has shown that imitating the top stock picks of the best hedge funds can outperform the market. Therefore, we believe that Invivyd, Inc. (NASDAQ:IVVD) is a promising investment opportunity.
Invivyd, Inc.’s (NASDAQ:IVVD) Pipeline and Business Model
Invivyd, Inc. (NASDAQ:IVVD) has several candidates in its pipeline, including pemivibart injection (PEMGRADA), which has demonstrated 80% to 90% efficacy in reducing the symptomatic risk of COVID-19 in clinical trials.
PEMGRADA has already obtained FDA approval, and the company is working on another COVID-19 candidate known as VYD2311. Invivyd, Inc. (NASDAQ:IVVD) is also advancing in the discovery stage of candidates for the prevention of seasonal influenza.
The company has enough inventory of PEMGARDA to meet demand without immediate manufacturing expenses. During the third quarter of 2024, the company generated a net product revenue of $9.3 million driven by the sale of pemivibart.
Invivyd expects to turn profitable by mid-2025, driven by existing cash reserves and operational efficiency improvements. By the end of Q3, the company had $107 million in cash and cash equivalents.
Conclusion
In conclusion, Invivyd, Inc. (NASDAQ:IVVD) is a promising investment opportunity due to its strong pipeline of treatments for infectious diseases and its expanding commercial endeavors through collaborations with infusion centers.
While our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns within a shorter time frame, we acknowledge the potential of IVVD to grow. If you’re looking for an AI stock that trades at less than 5 times its earnings, check out our report on the cheapest AI stock.
Disclosure:
None. This article is originally published at Insider Monkey.