3 Small-Cap Stocks That Doubled in 6 Months

Small-cap stocks are navigating particularly challenging waters in the current market environment. Stubbornly high interest rates have only recently begun their descent, while Wall Street’s investment trends have shifted dramatically toward consolidation in a few dozen AI-related large-cap stocks. This has pulled capital away from many smaller companies, creating what some analysts see as an undervalued segment of the market.

However, history shows that abandoning small-cap growth stocks entirely can mean missing transformative opportunities. The rational argument for maintaining exposure to carefully selected small-caps lies in the asymmetric return potential – where even one successful breakout from a small portfolio allocation can deliver life-changing returns. With interest rate cuts on the horizon and potential shifts in Wall Street’s investment philosophy, current conditions may represent an attractive entry point before a broader small-cap renaissance.

Serve Robotics (NASDAQ:SERV) is positioned to revolutionize food delivery through autonomous robotics. The company manufactures compact robots capable of loading food and other items for doorstep delivery, equipped with security cameras that have already led to criminal convictions in theft cases. With a strategic partnership with Uber Eats already in place, Serve Robotics delivered 120 food delivery robots in Q2 alone, with ambitious plans to deploy 2,000 units before scaling exponentially.

The economic case becomes compelling as production scales. While individual robots currently cost approximately $32,000, mass production could dramatically reduce these costs. This creates a powerful incentive for delivery platforms to transition from human drivers to robotic solutions. Serve Robotics estimates it’s addressing a $450 billion market opportunity, yet the company commands a market capitalization of just $754 million. SERV stock has surged 132.7% over the past six months, reflecting growing investor confidence in its automation thesis.

CPS Technologies (NASDAQ:CPSH) specializes in aluminum-silicon-carbide (AlSiC) metal-matrix composites, a sophisticated thermal management solution experiencing surging demand across multiple megatrends. The company’s technology addresses critical needs in electric vehicles, wind turbines, 5G/AI power stacks, and defense platforms where lighter, cooler-running power modules are essential. With a market capitalization below $53 million, CPS Technologies represents a pure-play on materials science driving the electrification revolution.

The company’s space credentials provide additional validation of its technology. CPS AlSiC housings protect the power supply for NASA’s SHERLOC instrument aboard the Mars Perseverance rover, with components also operating on the International Space Station and the newest satellites deployed by the U.S. Space Force. This technological leadership is translating to financial performance, with Q2 2025 revenue growing 60.6% to $8 million and net income turning positive at $103,800. CPSH stock has rewarded investors with a 137.9% gain over the past six months.

Unusual Machines (NYSEAMERICAN:UMAC) operates in the strategically critical first-person-view (FPV) drone component market, providing NDAA-compliant goggles, flight controllers, video transmitters, motors, and ready-to-fly quadcopters. The company benefits from two powerful tailwinds: the Pentagon’s push to eliminate Chinese electronics from small drones, and the long-term vision that every intelligence, surveillance, and reconnaissance (ISR) platoon, first-responder squad, and logistics fleet will require American-made drone swarms.

The urgency of developing domestic drone capabilities has been underscored by conflict in Ukraine, where FPV drones have proven absolutely essential. Currently, the United States lacks a comprehensive answer to China’s DJI dominance, despite evidence that civilian DJI drones can be easily retrofitted for military applications. Unusual Machines, with its $463.8 million market capitalization, stands to benefit significantly as the Army aggressively pursues reliable domestic sources. The company recently demonstrated strong execution with a $800,000 order from Red Cat Holdings (NASDAQ:RCAT) and another $12.8 million order earlier in the week, contributing to Q2 revenue growth of 50.5% that beat estimates by 17.26%. UMAC stock has surged 154.6% over the past six months.