6 ASX Small Cap Stocks to Watch in June 2025

Let’s take a look at 6 ASX small cap stocks to watch!

ASX small cap stocks, we mean companies with a market capitalisation between $50 million and $500 million. We acknowledge there’s no hard and fast definition in the same way there is a definition of High Net Worth Investors (i.e. over $2.5m in investible assets or $400k in annual income). But in general, small caps are not large caps (i.e. worth several billion). Yet some of the ASX’s biggest success stories once began as small caps and grew.

Why pay attention to them in June 2025?

In our view, the current economic mix of easing inflation, stabilising interest rates and a modest uptick in risk appetite presents a strong backdrop for small cap growth. As per the S&P/ASX Small Ordinaries Index (XSO), we’ve seen about a 5% year-to-date gain through to June 13 2025, which may not be that impressive at first glance, but ahead of the ASX 200’s 4% gain. Moreover, recent ASX sector-performance data show that investor interest in emerging sectors such as clean tech, AI and battery materials has reignited. With no further ado, here is our list!

 

6 ASX Small Cap stocks to watch!

 

Core Lithium (ASX: CXO)

Core Lithium is gradually re-emerging as a serious contender in the Australian lithium space after a challenging couple of years as the plunge in lithium prices got so bad, it had to mothball its Finniss Project. However, the tide appears to be turning.

According to Benchmark Mineral Intelligence, spodumene prices have stabilised around US$655–700/t in early 2025, following steep declines in 2023. And with global electric-vehicle (EV) production expected to surge into 2026, demand for battery-grade lithium is likely to remain strong.

Yes, no one can say that for sure, but Core Lithium is confident enough has plans to re-start its project. No it does not have a confirmed timeline, but has definitive plans which include significantly reduced costs compared to Finniss 1.0.

For investors betting on a rebound in lithium prices, Core Lithium could deliver outsized returns due to its project that is low-cost, conveniently located and high-grade. If and when the company re-starts at Finniss and spodumene spot prices move even moderately higher, CXO’s re-rating potential is substantial.

 

Neometals (ASX: NMT)

Neometals is transitioning from a traditional mining model to a more circular, sustainable-materials approach. While its roots are in lithium and vanadium, the company is gaining significant traction through its battery-recycling technology, a market projected to grow exponentially alongside EV penetration.

A standout is its joint venture with Mercedes-Benz to develop a lithium-ion battery-recycling plant in Europe, which could become a template for global expansion. Neometals’ hydrometallurgical process enables high recovery rates of key battery minerals such as lithium, cobalt and nickel, addressing environmental concerns while reducing supply-chain dependency on primary mining.

Despite the long-term promise and multiple commercial agreements already in place, Neometals trades near multi-year lows, making it a compelling case of mispriced optionality. Investors with a sustainability or future-tech tilt should keep NMT on their watchlist.

 

Immutep (ASX: IMM)

Immutep is one of Australia’s most exciting small cap biotechs, specialising in immuno-oncology. Its lead drug candidate, eftilagimod alpha (efti), is an immune booster that works synergistically with existing cancer treatments like checkpoint inhibitors (particularly Keytruda). The drug is currently undergoing clinical trials across the US, Europe and Australia in head and neck cancer.

Interim analysis is expected in late 2026-mid-2027. This may seem a while, but the drug could thus be commercialised within 3 years given it has a Fast Track Designation. And data before that could lead to a significant re-rating. For risk-tolerant investors, Immutep offers asymmetric upside in a sector with high-growth potential.

 

Audinate Group (ASX: AD8)

Audinate is the small cap company behind Dante, the industry-standard protocol for digital-audio networking, used by AV professionals and global OEMs including Bose, Yamaha and Shure. As AV environments shift from analogue to IP-based systems, demand for Dante-enabled solutions continues to climb.

Post-pandemic, Audinate has not only stabilised but also significantly improved its supply-chain efficiency and gross margins, which were previously impacted by chip shortages and manufacturing delays. Revenue has grown steadily, supported by strong licensing deals, recurring software revenue and global expansion in North America, Europe and Asia.

AD8’s current valuation does not fully reflect its IP moat, high gross margins and entrenched position in a growing niche market. We see it as one of the most underappreciated tech stories on the ASX, especially as global infrastructure investment in digital-AV solutions picks up pace.

 

Black Cat Syndicate (ASX: BC8)

With gold prices hovering near all-time highs – over A$5,000/oz according to market data – investors are increasingly looking for small cap gold stocks, particularly smaller-scale miners or developers that have high-potential projects. In our view, Black Cat Syndicate stands out due to its prime tenement position in Kalgoorlie, Western Australia’s gold heartland.

The company holds several advanced gold assets, including the Coyote, Paulsens and Kal East projects, all of which feature historical infrastructure and relatively low restart-capital requirements. According to S&P Global, Black Cat’s total resource base has grown meaningfully over the last 12 months, yet the market has largely overlooked the quiet accumulation of ounces.

If gold continues its upward trajectory amid macro uncertainty and inflationary tailwinds, BC8 could benefit significantly. Its low enterprise value compared to peers means any positive feasibility news or production announcement could sharply re-rate the stock.

 

Pacific Smiles (ASX: PSQ)

In the defensive healthcare sector, dental services are one of the most consistently growing niches, buoyed by ageing populations, increasing cosmetic-dentistry demand and rising private-health-insurance uptake. Pacific Smiles Group is capitalising on this trend by operating more than 120 branded dental centres across New South Wales, Queensland and Victoria.

Despite macroeconomic pressures, PSQ has maintained a strategy of moderate, disciplined expansion. The company recently opened new clinics in high-growth corridors and is now entering a post-capex consolidation phase, which should allow for margin expansion and improved free cash flow.

The recurring nature of dental revenue, coupled with PSQ’s leaner cost structure and established referral channels, positions the company well heading into FY26. For investors seeking growth with relative defensiveness, Pacific Smiles is a steady, under-the-radar pick.

 

What Should Investors Keep in Mind?

Small cap stocks offer significant upside potential but come with higher volatility and risk. Small cap companies are often early-stage, under-followed and more sensitive to market swings, which makes them less predictable than large-cap peers. However, with the right approach—diversifying across sectors, staying updated on earnings reports and clinical-trial results, and conducting thorough research on management teams and capital positions—investors can uncover opportunities that deliver outsized returns.

The six ASX small-cap stocks profiled above span a broad mix of sectors, from gold and lithium to biotech, industrials and digital marketplaces. While not all will succeed, history shows that many of tomorrow’s leading mid-caps or even blue chips start as today’s small, undervalued names. With global and domestic macro trends shifting in favour of select industries, this could be the ideal time for investors to take a closer look before the broader market catches on.

 

What are the Best ASX Stocks to invest in right now?

Check our buy/sell tips

FAQs

• What is a small-cap stock in Australia?

  In Australia, small-cap stocks generally refer to listed companies with market capitalisations between $50 million and $500 million. These companies tend to be more volatile but offer higher growth potential than large-caps.

• Why are small-cap stocks considered riskier?

  They often have less access to capital, limited operating history and are more sensitive to market cycles. However, this also means they can grow rapidly if the business model clicks.

• Is June 2025 a good time to invest in small-caps?

  With inflation easing and investor sentiment improving, small-caps have rebounded sharply in early 2025. That said, careful stock selection remains essential.

• How do I research small-cap stocks?

  Start with company announcements on the ASX, read annual reports, track broker commentary and stay updated via investor platforms like Market Index and Motley Fool Australia.

• Can small-cap stocks pay dividends?

  Yes, some do. However, most reinvest profits into growth. If income is your goal, look at mature small-caps like LaserBond or Pacific Smiles.