Activist hedge fund Elliott Investment Management has grown its stake in Phillips 66 (PSX 2.83%) to $2.5 billion. This puts it in the top five investors, and is likely the start of a raft of changes coming for the oil stock.

Upstart Holdings (UPST 3.04%) is slated to release quarterly results after the market closes. Although it's still forecasted to be loss-making, increased loan approval efficiency thanks to AI enhancements should reduce the loss versus last quarter. Despite lagging the S&P 500 by around 100% in each of its three 2021 Hidden Gems recommendations, there is still high conviction among Fool analysts for this stock to beat the market over the next 5 years.

• 7 of the 9 Stock Advisor recs for this stock are beating the market: Shopify (SHOP 2.12%) will report ahead of the opening bell, with the holiday season typically being the highest volume quarter. The key gross merchandise volume (GMV) trends will be closely analyzed by investors.
• A portfolio with over 500 beverage brands: Coca-Cola (KO 1.11%) also releases earnings ahead of the market opening. Shareholders were hoping the Q3 9% organic revenue growth wasn't just a flash in the pan, and they ought to be pleased as both revenue and earnings beat expectations.

Micro-cap stocks, generally defined as those stocks with market caps of $3 billion (and often much, much less), are small, unknown, and underfollowed by Wall Street analysts. It's also a space filled with businesses hanging on by a thread – or worse, penny stocks of questionable quality.

But their allure lies in the fact that microcaps frequently appear in the list of the market's best-performing stocks. Take Axon Enterprise (AXON -0.20%), which had humble beginnings as Taser International and certainly fell into that microcap category, with a sub-$20 million market cap in June 2001.

• Zooming out: Axon didn't push past the $1 billion barrier for almost three years (2004 being when it was first recommended in Rule Breakers).
• Why we like microcaps: Fast forward to 2024, and Axon was the fifth-best-performing S&P 500 stock in 2024, leaping 130% and now boasting a $52 billion market cap. Despite last year's impressive gain, it's still ranked 8th for its ability to beat the market over the next 5 years across all TMF recommendations.