3 Hot Small-Cap Stocks to Buy: January 2024


  • Here are three top hot small-cap stocks for January 2024.
  • American Superconductor (AMSC): AMSC reported that its top line surged 65% YOY last quarter.
  •  International Battery Metals (IBATF): IBATF is pioneering a new method of mining lithium. 
  • Rumble (RUM): The internet video company unveiled an exciting, new partnership. 
hot small-cap stocks for January 2024 - 3 Hot Small-Cap Stocks to Buy: January 2024

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Investors who buy small-cap stocks usually want to hit “home runs.” In other words, they want to make huge amounts of money. One way to accomplish that goal is by choosing names that Wall Street is falling in love with, as seen in the huge, recent gains in stock prices. Equities undergoing such rallies are often referred to as “hot stocks.” As always, it’s important to choose companies that can capitalize on strong, ongoing trends and show evidence of having top-notch products. By finding hot small-cap stocks that meet these criteria, investors can, in the words of Investopedia, find the “large-cap stocks of the future.” With all that said, here are three hot small-cap stocks for January 2024.

American Superconductor (AMSC)

A wind turbine appears in silhouette against a bright orange and blue sky.
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American Superconductor (NASDAQ:AMSC) stock has been on fire since the company reported a 65% YOY revenue surge last quarter. Specifically, AMSC has jumped 40% since it released its quarterly results.

Moreover, the company’s net income, excluding certain items, came in at $900,00, way better than the adjusted loss of $7.7 million during the same period a year earlier. Also noteworthy is that it generated positive cash flow of $1.3 million during the quarter.

AMSC’s powerful rebound was mostly enabled by the rapidly rising revenue of its power grid unit, Gridtec. The unit’s revenue climbed to $33.6 million last quarter from $20.8 million a year earlier. The unit’s sales are generated by products that ensure smooth, uninterrupted utility flow, even with renewable energy sources present.

But AMSC also produces and globally distributes wind turbines. Its Windtec unit is beginning to rebound thanks to its key customer, Inox Wind, ramping up its wind turbine installation. AMSC’s wind revenue climbed to $5.75 million last quarter.

In the company’s recent earnings call, CEO Daniel McGahn was very bullish on Gridtec and Windtec. He was also optimistic on the demand for the firm’s products being used by the U.S. Navy to combat mines. He further indicated that more utilities are interested in buying its REG systems, making grids much more resilient to natural disasters and enabling individual wires to increase the amount of electricity they conduct.

AMSC’s market capitalization is $420 million.

International Battery Metals (IBATF)

A close-up shot of a cobalt pile in front of a black background.
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International Battery Metals’ (OTCMKTS:IBATF) lithium plant utilizes a technology called direct lithium extraction, or DLE. By utilizing a similar system to most household water softeners, companies can extract the metal using less land and water than conventional lithium mines. In fact, IBATF’s plant operates on less than three acres.

The shares have been on a tear since the firm recently reported that it had leased the plant to a “significant producer of metals and minerals.” Since then, the stock has jumped almost 50%.

The plant is slated to generate 4,000 tons of lithium annually when it begins operations in Q2, and International Battery Metals will receive royalties on the plant’s lithium production. Eventually the lessee has the option to buy the plant, but International Battery Metals would keep the rights to the technology. This unique deal makes IBATF one of the top hot small-cap stocks for January 2024.

Many other major companies, including Albemarle (NYSE:ALB), Rio Tinto (NYSE:RIO) and General Motors (NYSE:GM) have tried to develop DLE technology but none have commercialized it yet.

International Battery’s market capitalization is $190 million.

Rumble (RUM)

A woman in a pink jacket sits at a table inside while filming herself on camera
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Rumble (NASDAQ:RUM) operates an internet video website that embraces free-speech principles, consequently attracting many right-wing Americans. The site competes with Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) YouTube.

In January, Rumble disclosed that it had made a deal with Barstool Sports, the sports gambling-oriented company founded by Dave Portnoy. Under the agreement, Rumble’s viewers will obtain “access to all Barstool Sports content… including live streams.” The deal should help Rumble attract many sports-gambling fans.

For the last two years, Rumble has provided video and streaming services for Truth Social, former President Trump’s social media platform. Trump’s current presidential run is boosting RUM stock as well.

Rumble’s shares have nearly doubled since January 12, and the name currently has a market capitalization of $1.8 billion.

On the date of publication, Larry Ramer held a long position in AMSC. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been SMCI, INTC, and MGM. You can reach him on Stocktwits at @larryramer.

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