Will small-cap stocks have opportunities in 2025? These 5 stocks are worth following.

The Federal Reserve has cut interest rates 3 times since September, lowering the benchmark rate from 5.25%-5.50% to 4.25%-4.50%. With alleviated inflation pressures and stable economic growth, small-cap stocks are entering a golden period.

**These 5 small-cap stocks are particularly attractive**:

**CLMB (Climb Global Solutions)** — a leading IT distributor, ranked #1 by Zacks. Earnings expectations have been raised from $3.59 to $4.55 per share over the past 60 days. The stock price has risen 135% YTD, with a market cap of $593 million. The company is experiencing dual growth through organic and acquisition strategies, adding 20 new supplier partnerships.

**AEYE (AudioEye)** — Cloud-based accessibility technology, Zacks rank #2. Deep collaboration with education giant Finalsite and government platform CivicPlus, covering over 10,000 government clients. 2025 earnings forecast raised to $0.69/share. YTD skyrocketed 211%, market cap of $205 million.

**BYRN (Byrna Technologies)** — A manufacturer of non-lethal security devices. Explosive growth in demand in the Latin American market, capacity expansion + supply chain diversification to mitigate risks. YTD increase of 351%, with a market value of $648 million. Considered to be the best performer.

**TZOO (Travelzoo)** — A travel content platform, adjusting membership fees is expected to significantly increase revenue. Controlling costs while increasing earnings, with a profit expectation of $1.21 per share for 2025. YTD up 118%, with a market value of $245 million.

**HIPO (Hippo Holdings)** — Innovative home insurance model focusing on new markets in California/Florida/Texas. Shifting to an insurance-as-a-service model to reduce risk exposure. Expected loss in 2025 narrows from $2.45/share to $1.85/share. YTD up 195%.

**Key Points**: These stocks have Zacks A/B growth ratings + #1/#2 rankings, all of which are small-cap stocks that are starting to rise from a low point. In a rate-cutting cycle + economic recovery, small-cap stocks have historically outperformed the S&P 500. However, small-cap stocks are highly volatile, and risks should also be considered.