Bell Potter is tipping huge returns from these small cap ASX shares

Big things could come from these small caps in 2024.

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Are you looking to invest in some small cap ASX shares with the potential to deliver very strong returns?

If you are, and have a high tolerance risk, then it could be worth looking at the two small caps listed below that Bell Potter is bullish on. They are as follows:

Arafura Rare Earths Ltd (ASX: ARU)

The first small cap ASX share that has been named as a buy is Arafura Rare Earths.

It is the owner of the Nolans rare earths project, which aims to supply a significant proportion of the world's neodymium and praseodymium (NdPr) demand in the future.

These are critical minerals in the production of high-performance neodymium magnets. They are used in mobile phones, electric vehicles, wind turbines, and military weapons.

The team at Bell Potter is positive on the company and believes it is well-positioned due to "growing demand from the electric vehicle and wind turbine sectors in combination with a need to de-risk current supply concentration in China."

Bell Potter has a speculative buy rating and 44 cents price target on Arafura's shares. This implies that its shares could rise 175% over the next 12 months.

Curvebeam AI Ltd (ASX: CVB)

Another small cap ASX share that Bell Potter rates highly is Curvebeam AI.

It is a developer and manufacturer of specialised medical imaging equipment and software aids using image analysis, artificial intelligence (AI) and deep learning AI (DLAI). Its flagship product is the HiRise scanner, which provides high resolution 3D imaging, primarily for the lower body.

The broker likes the company due partly to its proprietary imaging technique, which improves orthopaedic management. It also notes that a recent strategic partnership with Stryker Corporation is critical to commercialisation.

Particularly given that "Stryker is a very large and powerful participant in the market for orthopaedic surgery consumables, prosthetics and surgical aids."

It adds that "the larger sales team is exceptionally well positioned to create selling opportunities for HiRise and there are significant synergies with the Stryker product portfolio." Overall, the broker anticipates that "the Distribution Agreement will accelerate adoption by years."

Bell Potter currently has a speculative buy rating and 50 cents price target on its shares. This suggests a potential upside of 33% from current levels.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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