Small-cap stocks tend to outperform their larger brethren over time. After several years of underperformance, it looked like the little guys were going to start winning again.

Inflation was moderating and the Federal Reserve was hinting it would cut interest rates at least three times this year. Beginning last October, the performance of the Russell 2000 index of small-cap stocks started pulling away from that of the S&P 500. But it wouldn’t last. Runaway government spending drove inflation higher and Fed chairman Jay Powell just intoned he no longer has “confidence” inflation is heading the right way. That means we won’t get interest rate cuts until at least December, according to some analysts.

High interest rates are death to small businesses. Because they rely upon financing to fund their expansion, a rising rate environment absolutely kills the small business market. It’s why the Russell 2000 has been such a poor performer these past few years. It could also mean they will continue lagging in 2024.

But not all small companies are underachieving. In fact, some have been market standouts, even beating the likes of top tech headliners like Nvidia (NASDAQ:NVDA) and Super Micro Computer (NASDAQ:SMCI). The three small-cap stocks below are up at least 304% so far this year. Let’s see if they can keep running well ahead of the index.

Dave (DAVE)

Comedian Steve Martin used to joke that you needed to have a big, strong name for a bank because no one is going to put their money into Fred’s Bank. “Hi, I’m Fred. I have a bank.” Well, meet Dave (NASDAQ:DAVE). It’s a digital bank, or as it likes to call itself, a neobank. And people are flocking to its services. Operating revenue grew 26% last year and it finally turned profitable in the fourth quarter on an adjusted and GAAP basis.

The primary feature of Dave is its ExtraCash product, which provides small (up to $500) short-term loans without any interest, late fees or credit checks. Essentially Dave is a payday lender but at lower cost. While it doesn’t have any of the typical charges that come with a payday loan, it does charge a $1 per month subscription fee and it costs between $3 and $25 to access the loan immediately. There’s also the option to tip up to 15% (yeah, tipping culture is way out of hand if you’re tipping a bank). 

The Los Angeles Times noted the typical payday lender had an interest rate of 414% if paid back within two weeks. An ExtraCash express loan, with tip, could have an interest rate of between 100% to well over 500%. Dave will also keep withdrawing money from your bank account until the loan is fully paid back.

Dave has over 13 million registered members, 10 million of whom have used at least one product. It added over 680,000 new members in the fourth quarter. The stock is up 304% in 2024. While it’s not a particularly good financial solution, Dave stock could go even higher as cash-tight consumers turn to alternative funding sources.

Corbus Pharmaceuticals Holdings (CRBP)

Oncology biotech Corbus Pharmaceuticals Holdings (NASDAQ:CRBP) was bouncing along the $5 per share range for months on end until this past January when it reported results from an early-phase trial for its antibody-drug conjugate (ADC) CRB-701. Following the report, Corbus’ stock quadrupled in value and today is up 515%.

What likely got investors excited was the news stoked the fires of a potential acquisition. Not that Corbus has received any offers, but there have been numerous acquisitions in the space of late. Just this year Bristol-Myers Squibb (NYSE:BMY) paid $800 million upfront to China’s SystImmune as part of a deal for its ADC worth up to $8.4 billion; AbbVie (Nasdaq: ABBV) acquired ImmunoGen for $10 billion and Johnson & Johnson (NYSE:JNJ) bought Ambrx Biopharma for $2 billion.

Yet investors might be getting ahead of themselves. Those deals for ADCs were much further along the path than is CRB-701. For example, AbbVie got ImmunoGen’s ADC (which is FDA-approved) but also the rest of its oncology portfolio, too. Johnson & Johnson acquired numerous ADCs in the Ambrx deal.

There is potential for Corbus Pharmaceuticals to advance early but a 500% gain for such an early stage development seems like putting the cart before the horse. It does have other drugs under development too, but I still see the biotech’s shares retreating at some point.

Skye Bioscience (SKYE)

Skye Bioscience (NASDAQ:SKYE) is another biotech bounding higher this year on good, early phase news, though its drug candidate is further along in the clinical-trial stage. The biotech announced in February it had completed enrollment in a phase 2A study for its glaucoma drug SBI-100 Ophthalmic Emulsion (OE). It had targeted 54 patients for the study but got 56 enrolled and did it sooner than expected. It is now expecting topline data to be reported sometime in the second quarter.

Previously, Skye received clearance for its Investigational New Drug (IND) application with the Food & Drug Administration to begin phase 2 trials of nimacimab, a therapy for patients with obesity and chronic kidney disease.

All the positive news sent Skye Biopharma stock rocketing higher. It used the higher share price to raise $40 million in equity financing, which set the stock back a bit. However, it was able to also move the stock from the over-the-counter pink sheets to the Nasdaq exchange, which sent the stock jumping again. Today it 535% above the price it started 2024 at.

On the date of publication, Rich Duprey held a LONG position in ABBV and JNJ stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.