3 Growth Stocks Too Small for Institutions to Buy

Key Points

• These three growth stocks are seemingly out of the reach of most institutional players, leaving retail investors with a great advantage.
• With significant EPS growth to be delivered this year, today's prices give a discount to lock in a fantastic deal. 
• Wall Street analysts see double-digit upside ahead for today's list, and it is all in the fundamentals.

Most retail investors fall to the default belief that they do not have any competitive advantage compared to the world of hedge funds and investment banks, otherwise known as the smart money institutional players on Wall Street. While this is mostly true across the board, access to information, leverage of connections, and industry insights are not the only factors that can help retail investors get ahead every single time.

These funds manage so much capital that they have no alternative but to look for deals that can accommodate such sizable investments, which leaves many companies unattended and free for retail investors to pick up.

This is where the concept of market capitalization comes into play. Companies with a market capitalization of less than $8 billion are typically outside the purchasing realm for these players.

Keeping this in mind, whenever a retail investor finds a company that promises outsized growth potential at a small market cap, they can rest assured that they will likely see little manipulation or competition coming from the hands of the bigger players in the market.

Fitting this description, companies like Albemarle Co. NYSE: ALB, Upstart Holdings Inc. NASDAQ: UPST, and NIO Inc. NYSE: NIO can be reasonable options to consider.

Albemarle Stock: A Forgotten Name in This Mix

Now that Albemarle stock has traded down to only 50% of its 52-week high, this is a name in the basic materials sector that has been overlooked compared to the broader rallies seen in the S&P 500 index overall. This creates a gap that needs to be filled in a sort of catch-up play, one that might take a bit longer due to this size limitation.

Being a $7 billion company keeps Albemarle outside of the realm of most of these funds, no matter how attractive the story looks moving forward. Considering the consensus price target of $91.60 per share placed by Wall Street analysts, this current valuation presents a favorable risk-to-reward ratio for those interested in buying the stock.

From today’s low prices, this consensus target would call for as much as 53.2% upside, solidifying the sort of upside potential this catch-up play can deliver to those without size limits. Now that the price of oil is going higher due to geopolitical conflicts in the Middle East, Albemarle might have the perfect catalyst right in front of it.

More expensive oil might create demand for Albemarle’s chemicals and resources used in oil refining. This industry is soon to be red hot as the price per barrel goes up. This explains why Wall Street analysts now forecast up to $2.97 in earnings per share (EPS) for the third quarter of 2025, a massive jump from today’s reported net loss of $0.18 per share.

Under the Radar Upside in Upstart Stock

Being a $5 billion company may help keep Upstart stock in stealth mode despite how exciting its underlying setup is. This retail credit lender is doing wonders to help consumers who may now be tapping out on credit lines and feeling the pains of inflation across the United States economy, and its financial figures show it.

With this quiet growth happening right now, this stock should be nowhere near its 52-week low prices, yet that’s where investors will find it. The benefit of finding these smaller businesses comes in the delayed gratification they provide, and Upstart can deliver plenty of upside without the drama and attention Wall Street brings along with it.

Needham & Company analyst K. Peterson placed a Buy rating on Upstart stock as of mid-May 2025, slapping a $70 per share price target on it as well to dare Upstart to deliver a rally of up to 32% from where it has fallen to today, and one that might trickle in without much volatility and noise.

NIO Stock: The Premium Choice in Chinese EVs

When it comes to Chinese stocks, investors don’t have to do much digging to realize that they have been out of favor in today’s volatile environment, and NIO is no exception. However, this creates a double tailwind for the $7.2 billion company going forward.

Being an unpopular name today only means investors have more time to start accumulating positions before the hype cycle returns to China and electric vehicles (EVs) altogether. Of course, a sound catalyst is needed in this case, and what better choice than to pick the high double-digit growth rates NIO reported in net car deliveries in the recent quarter?

Because of this attractive growth profile, the market is now willing to pay up to 8.6x in a price-to-book (P/B) multiple for NIO stock, which commands a massive premium to the rest of the auto sector’s 1.9x P/B average. As seasoned investors will often point out, the market is rarely wrong when it chooses to pay a premium for stocks that show a reasonable promise of growth.