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3 Small Caps Hitting 52-Week Highs: Take Profits or Let Ride?
Written by Dan Schmidt. Published 10/15/2025.
Key Points
- Small-cap stocks often require a mix of fundamental and technical analysis when performing due diligence.
- Stocks hitting their 52-week high often have bullish momentum, but this isn't a foolproof method for picking winners.
- Using a variety of indicators is often the best strategy; we'll use several tools to identify bearish or bullish signals in the following three small caps.
When mega-cap stocks are posting new all-time highs every other week, it's easy for smaller corners of the market to get lost in the excitement. If it's not artificial intelligence or crypto, it's unlikely to get more than a 30-second sound bite on the financial news cycle right now. But gains count whether they come from big stocks or small stocks, and when speculative fervor intensifies, small-cap stocks can quickly catch up to their larger counterparts.
Today, we'll examine three small-cap stocks that have hit a key technical level: their 52-week highs.
It's Time to Buy "the NVIDIA of Quantum Computing" (Ad)
Yahoo Finance wrote that investing in quantum computing could...
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But why are quantum computers so revolutionary?
Could it really be bigger than AI?
Is it time to take profits on these winners, or are their rallies just getting started?
Using Research to Inform Small-Cap Investment Decisions
Small caps don't always behave like large-cap companies; their volatility often scares off risk-averse investors. Successfully trading small caps requires attention to both fundamental and technical signals, which can be tedious for investors who prefer not to follow day-to-day market gyrations.
When a stock makes a new 52-week high, it's typically viewed as a bullish momentum signal since new highs often beget further gains.
Of course, if buying every stock breaking out to 52-week highs guaranteed outsized returns, every investor would use that as a blanket strategy. Instead, a 52-week high should be a beacon directing you to take a closer look. The tools you use in your research usually depend on your time frame.
If you're a long-term investor, fundamental metrics and future catalysts are crucial. If you have a shorter timeline (like day or swing trading), incorporate technical tools like moving averages and momentum oscillators to find signals.
The following section focuses on technical signals as we examine three small-cap breakout candidates that recently surpassed their 52-week highs.
3 Small Cap Breakouts: Time to Sell or Hold For More Gains?
What counts as a small-cap stock? Even microcap and penny stocks can have market caps over $100 million nowadays, so for this piece we'll classify small caps as companies with market capitalizations under $5 billion. These three companies operate in different stock sectors, and various market influences have triggered their breakouts.
Sunrun: Riding Unexpected Solar Tailwinds
Sometimes, bad news can look less bad than expected. When the One Big Beautiful Bill Act (OBBBA) was being debated in Congress, many anticipated federal solar tax credits and subsidies would be dramatically reduced.
Solar stocks spent much of the first half of 2025 in a drawdown, pricing in those potential changes.
When the final bill was signed into law, investors realized federal solar tax advantages weren't eliminated. While the bill still included phaseouts of many solar initiatives, the outcome was disappointing rather than catastrophic.
In the months since, solar stocks have recovered, especially smaller names like Sunrun Inc. (NASDAQ: RUN).
Sunrun has received several analyst upgrades in the last two months, and the chart shows promising signs. The price has broken above the 50-day and 200-day simple moving averages (SMAs), with a Golden Cross confirming upward momentum.
Additionally, the Relative Strength Index (RSI) has not yet reached overbought territory, suggesting this rally may have more room to run.
ACM Research: Surprise, It's a Semiconductor Company
It wouldn't be a complete stock discussion without at least one tech-sector name. ACM Research Inc. (NASDAQ: ACMR) sells semiconductor sanitizing equipment, and its roughly $2 billion market-cap stock is up more than 150% year-to-date (YTD).
Much of the move is tied to AI-related enthusiasm — anything connected to AI is getting outsized attention. But how much longer can ACMR's run continue?
The ACMR daily chart paints a more cautious picture than RUN. The stock has established support at the 50-day SMA and the long-term trend appears intact, but the price has surged well above the level it spent most of 2025 near. The RSI moved into overbought territory and prompted a sell-off.
While betting against AI enthusiasm can be stressful, ACMR appears likely to pull back toward its 50-day SMA before any sustained rally can resume.
Sonos: A Surprising Breakout in a High-Tariff Environment
Sonos Inc. (NASDAQ: SONO) makes the wireless audio equipment that likely powers your NFL Sundays.
The sector faces meaningful challenges from high tariffs. In its Q3 2025 earnings report released on August 6, the company missed earnings projections despite a slight revenue beat.
Executives also noted that U.S. tariffs on Vietnamese and Malaysian imports will force Sonos to raise prices later this year.
Despite these fundamental headwinds, the stock has climbed more than 50% in the last three months on strong bullish momentum. Investors face a tricky situation: the company is under margin pressure from tariffs, yet a Golden Cross signals strong upward momentum.
One key indicator to watch is the RSI, which recently hit overbought territory. If the RSI fades, momentum in SONO shares could soften as well. Should the stock follow the RSI downward, the 50-day SMA would become an important support level to monitor.
Bottom line: 52-week highs are a useful signal to dive deeper, not a standalone buy-or-sell trigger. For traders, watch technicals like the RSI and the 50-day SMA. Sunrun appears to have momentum with room to run, ACMR looks likely to retest support at the 50-day SMA after its overbought bounce, and Sonos is a mixed case — bullish technically but vulnerable to fundamental pressure from tariffs. Use your time frame and risk tolerance to decide whether to take profits or hold for more gains.
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