Given the potential returns on offer at the small side of the market, if you have a higher tolerance for risk, it can sometimes be a good idea to have some exposure to small-cap ASX shares.
But which small caps are buys? Let's take a look at three that Morgans is recommending to clients:
Meeka Metals Ltd (ASX: MEK)
This gold miner could be a small-cap ASX share to buy according to Morgans. In response to the company's quarterly update, the broker has retained their buy rating and 33 cents price target on its shares.
It was relatively pleased with the miner's performance during the quarter. It said:
MEK delivered its 2Q26 operating result as the Murchison Gold Project continues to ramp up. Gold production increased 28% quarter on quarter to 9.1koz Au and was in-line with MorgansF of 9.3koz Au. Ounce production was underpinned by a mill head grade of 3.3g/t Au, ~10% above MorgansF assumptions; however, this grade outperformance is partially offsetting lower-than-expected throughput.
Looking ahead, improvements in mill throughput, driven by underground production, remain key to maintaining alignment with PFS forecasts We maintain our BUY rating, price target A$0.33ps and update our precious metals price deck.
Neurizon Therapeutics Ltd (ASX: NUZ)
Another small-cap ASX share that gets a thumbs up from Morgans is Neurizon. It has put a speculative buy rating on its shares with a reduced price target of 28 cents.
The broker believes that with major risks cleared, now is a great time to be jumping on board with this clinical-stage biotech company. This is especially the case given how there is a condensed catalyst runway ahead of it. It said:
Following FDA clearance, the imminent start of the Ph2/3 trial and the removal of the funding overhang providing full visibility through the pivotal program, NUZ now offers one of the cleanest entry points seen in the past 18 months, with major risks cleared and a condensed catalyst runway ahead.
Recent M&A activity underscores the scarcity value of ALS assets and provides a meaningful valuation anchor for NUZ if its clinical program delivers. Post recent capital raises, we update for the new share issuances which drive a reduction in our target price to A$0.28 from A$0.39, although we maintain our Speculative Buy rating, noting the high risk / high reward proposition.
Saluda Medical Inc (ASX: SLD)
This commercial-stage medical device company could also be a small-cap ASX share to buy according to Morgans. It has put a speculative buy rating and $3.07 price target on its shares.
It was pleased with the company's second quarter update and management revenue guidance upgrade for FY 2026. The broker said:
2Q activity report debut did not disappoint, highlighting accelerating US commercial momentum, cost actions to reduce future operating expenses and upgraded FY26 revenue guidance. Revenue growth jumped 15% QoQ, supported by rising implanted patient volumes, and continued expansion of both sales reps and implanting physicians, while cash outflow fell 14% QoQ on a lower fixed cost base supportive of operating leverage.
We believe management's decision to lift FY26 revenue guidance c4% at this early-stage post-IPO reflects improving visibility on sales execution and demand trends, reinforcing confidence in a stronger 2H performance. We update FY26 forecasts in line with guidance, with our DCF-based TP unchanged at A$3.07. SPECULATIVE BUY maintained.
