Investors who are looking for top-tier growth stocks with the potential to beat the market have plenty of options to choose from, particularly among the largest-cap names.
That said, there are also plenty of overlooked companies I think can provide outsized upside, particularly if this bull market continues. For those looking for small and mid-cap stocks with the potential to outperform (that also happened to blow by the market this past year), here are a few stocks I think are worth honing in on.
For reference, the S&P 500 surged roughly 16% in 2025, so I’m looking at companies that more than doubled this return over the past year.
Lyft (LYFT)
Surging 45% in 2025, Lyft’s (NASDAQ:LYFT | LYFT Price Prediction) return this past year has been impressive. The majority of this move can be tied to fundamental drivers.
This past quarter, Lyft provided record revenue of $1.7 billion, surging 11% year-over-year. This impressive surge was driven by gross bookings which increased 16% (indicating solid demand) and impressive pricing power which has led to solid profitability.
On that front, Lyft brought in more than $46 million in net earnings, a big swing from the -$12.4 million loss the company saw in the same quarter a year prior. With the company now generating material free cash flow while compounding riders and bookings, the future looks bright for the long-term #2 player in the ride-sharing market.
This improved cash flow and earnings profile provides Lyft with the potential to return more capital to shareholders in the form of share buybacks, debt reduction or selective growth investments. That’s good enough for most investors right now, and since I don’t think this narrative will change in the coming quarters, this is a stock I think can have a big 2026.
Lumen Technologies (LUMN)
With a return that more than doubled that of the S&P 500 in 2025, Lumen Technologies (NYSE:LUMN) is another company I think has provided very sneaky and impressive returns this past year.
Of course, the question is whether this momentum can continue into 2026.
I think there’s a decent likelihood of investors responding in the affirmative when this year is ultimately wrapped up. That’s because Lumen’s recent earnings paint a picture of a company that’s executing a credible cost-cutting and modernization plan. Once viewed as a company that has been structurally challenged by its wireline business, investors look at the company’s adjusted EBITDA of $787 million this past quarter (along with a 25.5% margin) and are increasingly viewing this company trading at just 10-times earnings as one worth investing in.
I’m not going to suggest this isn’t a company without hair on it. In fact, there’s plenty of risk to be considered with a company like Lumen – from its revenue and earnings declines seen in the past to its product mix.
But as the company has achieved more than $250 million in run-rate cost takeouts through Q3 and is expected to continue cutting costs at a similar clip next year, this is a stock I think can provide the sort of efficiency and cash flow stability many are looking for. With more than $1 billion in new portfolio commitment facility arrangements, Lumen has greater financial flexibility to manage though what could be uncertain times ahead.
The Metals Company (TMC)
I’ve been bullish on The Metals Group (NASDAQ:TMC) for quite some time, and there are a number of key reasons why. This is a company
With a year-to-date performance that shattered the performance of the S&P 500 (TMC stock surged roughly 465% over the past year), this is one of my best picks and a stock I think could still have incredible upside from here.
That’s mostly because of the company’s core deep sea mining business model, which continues to be validated with new exploratory permits to mine the sea floor for key battery minerals. I’ve discussed at length my view that this market could be a multi-trillion-dollar one – and that’s key to understanding why investors are putting capital to work in a still unprofitable company without significant revenue at a $3.6 billion valuation.
If the company is able to advance its permitting further, engage in pilot mining activities, and accelerate its expected commercial production date (currently slated for Q4 of next year), this is a stock I think could gain traction as this date approaches. With the company’s recent key milestones including a successful conversion of manganese silicate into battery-grade manganese sulfate and its continued engagement with U.S. regulators, this is a stock I think has asymmetric upside from current levels.
TMC stock remains a very strong buy in my books heading into 2026.
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