The Best Small-Cap Tech Stocks to Invest $1,000 In Right Now

Small-Cap Tech Stocks Overview - Small-cap stocks, with market caps between $250 million and $2 billion, can offer significant growth potential and outsized returns [1] - Three small-cap tech stocks worth considering are Innodata, Amplitude, and SoundHound AI [1] Innodata (INOD) - Innodata, a low-code software platform company, leverages generative AI to automate processes and train models, freeing workers for other tasks [2] - The company has secured master service agreements with five of the Magnificent Seven companies, a notable achievement for a firm with a $470 million market cap [2] - Revenue for the first half of 2024 rose 54% year-over-year to $59 million, with a net income of $975,000 compared to a $2.9 million loss in the same period in 2023 [3] - The stock price has surged over 90% year-to-date and more than 1,000% over the last five years [3] - The forward P/E ratio is 35, considered low given the company's revenue growth [3] Amplitude (AMPL) - Amplitude, with a $1 billion market cap, provides advanced data analytics software to track customer behavior and improve product marketing [5] - Revenue growth slowed post-2022 due to customer overinvestment during low-interest rates and contract renewals at lower amounts [6] - Management expects growth to reaccelerate, with potential bottoming in Q3 2024 after terminating contracts with Russian customers [6] - The company is free cash flow positive, holds 30% of its market cap in cash, and has an enterprise value-to-sales ratio of 2.5, making it one of the cheaper software stocks [7] SoundHound AI (SOUN) - SoundHound AI specializes in AI voice solutions, partnering with automotive brands like Honda and Hyundai, and dining chains such as Papa John's and Chipotle [9] - Revenue for the most recent quarter (ending June 30) grew 54% year-over-year to $13.5 million, with trailing 12-month revenue at $55.5 million, up from $46 million a year ago [10] - The company has a strong balance sheet with $200 million in cash and only $4 million in debt, though it is not yet profitable or free cash flow positive [10]