In this article, we will take a detailed look at the best American penny stocks to buy now.
American penny stocks comprise shares of US-based companies that trade under $5 on public exchanges. Besides their perceived appeal to retail investors due to cheap price and the possibility to affordably amass a large number of shares, American penny stocks are distinct for representing two important factors – the small-cap factor and the US country factor. Readers should know that these two factors are known for significantly outperforming their broad market counterparts in the last 15 years after the Great Financial Crisis. For reference, small-cap factor has outperformed its large-cap counterparts throughout the 2010s as the economy experienced a relatively peaceful period with relatively low interest rates, which is highly favorable for small, high-growth businesses. Likewise, the US stock market has consistently outperformed the World stock market, including major markets like Europe, China, and Japan, thanks to superior productivity growth and valuation expansion.
The situation drastically reversed in late 2024 and early 2025 with the election of a new US administration. The US stock market underperformed by more than 15% markets like Germany and China since the beginning of the year. The small-cap factor fell out of favor relative to the large-cap factor. The former event was driven by aggressive Trump 2.0 cuts and tariff threats, which put the US export/import base at risk, while the latter is driven by market uncertainty and investors flying to safe assets such as gold, bonds, or mature large-cap stocks. We believe that both these developments are temporary shocks and do not represent structural or definitive changes. In this context, a smart way to make money in the market would be to take a contrarian bet and buy American small-cap and penny stocks while they are relatively underpriced vs. their global and large-cap counterparts.
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First of all, we are firm believers that US investors should “stay at home” and continue to favor domestic stocks. The superior performance of the US stock market was not luck, but rather consistent productivity growth through deregulation, capital favoring risky but promising projects, and a more prominent hustle mentality. The European Central Bank confirms these findings and mentions that between Q4 2019 and Q2 2024, labor productivity per hour worked increased by 0.9% in the Euro area, whereas it increased by 6.7% in the US. This difference is significant and compounds over time, leading to drastic differences in stock price performance over 5-10 years or more. Odds are that the US will continue to outperform Europe and the rest of the world in productivity gains. According to analysts, Trump turmoil is a temporary thing; tariff uncertainty should naturally resolve at some point, through either a trade deal or a withdrawal by the President himself. Furthermore, the Trump 2.0 regime has some aces up its sleeve, such as tax cuts and further deregulation, which is a heaven for productivity growth. Europe, on the other hand, remains a slow bureaucratic machine that is fueling its economic growth through debt issuance and industrial-military projects that bring very little value added (for reference, the German €500 billion spending bill will mostly result in new missiles that will probably never be fired). Likewise, China has its own problems, such as stalled population growth and increasing threats of onshoring and outsourcing to India and other regions. India got itself stuck in a new war with Pakistan, which might negatively impact its investment climate and economic growth.
Second, small caps and penny stocks became cheaper due to recessionary threats and widespread signals that the US economy is slowing down. While many sectors, such as construction and industrial automation, are indeed in a slowdown, the stock market is a forward-looking animal that gauges developments that would impact the economy 6-12 months from now. In other words, the market is very likely to return to growth upon the slightest positive signal. We believe there are many indications that the US will be able to avoid a deep economic recession. Rumors, as well as thorough analysts from leading banks like JP Morgan, say that the tariff saga is approaching a possible end through a deal with China and other large trade partners. China is likely to sit at the negotiating table as its economic outlook has been deteriorating as well – it turns out that around 20 million jobs in the country are directly dependent on commerce with the US. Avoiding a trade deal with the US might be more catastrophic for China than it might be for the US. Also, the latest report shows that the US economy added 177,000 jobs in April, beating expectations by a wide margin, which indicates that CEOs are reluctant to downscale their business and rather anticipate a gradual rejuvenation in the business environment later in the year.
With that being said, contrary to the prevailing belief, our opinion is that the US economy is far from doomed. History shows that stock markets have always recovered and always scored new highs. In this context, the best American penny stocks could become favored again and outperform the broad market.
Our Methodology
To compile our list of the best American penny stocks, we used a screener to identify companies based in the US with a share price below $5.00. Then we compared the list with Insider Monkey’s proprietary database of hedge funds’ ownership, as of Q4 2024, and included in the article the top 10 stocks with the largest number of hedge funds that own the stock, ranked in ascending order.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. CommScope Holding Company, Inc. (NASDAQ:COMM)
Stock price as of May 6th: $4.83
Number of Hedge Fund Holders: 32
CommScope Holding Company, Inc. (NASDAQ:COMM) provides infrastructure solutions for communication, data center, and entertainment networks. Its Connectivity and Cable Solutions (CCS) segment offers fiber optic and copper connectivity for telecommunications and data centers; its Networking, Intelligent Cellular and Security Solutions (NICS) segment provides wireless networks for enterprises; and its Access Network Solutions (ANS) segment includes broadband and video devices, as well as cloud solutions. COMM’s role is to enable service providers to deliver media, voice, IP data services, and Wi-Fi to their users.
CommScope Holding Company, Inc. (NASDAQ:COMM) delivered strong first-quarter results with core net sales increasing 23% YoY, and core adjusted EBITDA of $245 million, showing a whopping 159% YoY growth. The company achieved notable success in its CCS segment, with revenue growing by 20% YoY and adjusted EBITDA increasing 87%, while the enterprise fiber business showed remarkable growth with revenues of $213 million, representing an 88% increase compared to last year’s quarter. Core adjusted EBITDA as a percentage of revenues reached a record of 22%.
Looking forward, CommScope Holding Company, Inc. (NASDAQ:COMM) maintains its 2025 adjusted EBITDA guidance of $1 billion to $1.05 billion, despite potential tariff impacts. The data center market remains particularly strong, with customers indicating robust CapEx plans to support AI initiatives, and in some cases, even raising their capital expenditure plans. COMM is one of the best American stocks to buy as it has developed mitigation strategies for tariff effects through its flexible global manufacturing footprint, broad supplier base, and commercial strategies, with approximately 80% of US sales being country of origin in the United States or USMCA compliant.
9. Clear Channel Outdoor Holdings, Inc. (NYSE:CCO)
Stock price as of May 6th: $1.09
Number of Hedge Fund Holders: 33
Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) is a global player in out-of-home advertising, providing digital and static billboards, street furniture, transit displays, and airport advertising, complemented by its data-driven RADAR platform that enhances campaign planning, measurement, and targeting. CCO’s main role is to streamline the marketing process for clients and allow for easy access to various types of advertising.
Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) delivered consolidated revenue growth of 2.2% in Q1 2025, in line with guidance, and is confirming full-year 2025 guidance ranges for revenue and adjusted EBITDA. The company has successfully completed the sales of its international businesses in Mexico, Chile, Peru, and Europe-North, generating approximately $745 million in purchase consideration. This has allowed CCO to reduce its debt, including prepaying $375 million in term loans and repurchasing approximately $120 million in bonds. The company is now focused on its higher-margin US assets and expects to deliver mid-single-digit growth in consolidated revenue and adjusted EBITDA in 2025, making it one of the best American penny stocks on our list.
Looking ahead, Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) is optimistic about the future of out-of-home advertising in the US, citing several positive factors. These include the simplification of its business structure, reduced interest and corporate expenses, and strong visibility into 2025 revenue, with the majority already booked. The company is seeing increased interest from national advertisers, particularly in recovering markets like San Francisco, and is benefiting from emerging revenue verticals such as AI. CCO is also leveraging AI capabilities to improve sales productivity and targeting, which is expected to provide tailwinds to margins and productivity. Despite macroeconomic uncertainties, the company believes its risk is greatly reduced due to its US focus and is committed to delivering value for shareholders through positive funds from operations growth and targeted investments.
8. Bumble Inc. (NASDAQ:BMBL)
Stock price as of May 6th: $4.39
Number of Hedge Fund Holders: 33
Bumble Inc. (NASDAQ:BMBL) operates a portfolio of social networking platforms, including Bumble, Badoo, Bumble For Friends, and Geneva. The company’s flagship app, Bumble, differentiates itself from other leading platforms by empowering women to initiate conversations. BMBL generates its revenue through paid subscriptions, premium features, and in-app purchases, primarily in North America and Europe.
Bumble Inc. (NASDAQ:BMBL) is refocusing its strategy on improving the quality of matches and user experiences, rather than pursuing growth at all costs. The company plans to remove bots, scammers, and low-quality profiles while enhancing verification and safety features. BMBL is also modernizing its matching algorithm using AI and machine learning to provide more relevant matches. These efforts may result in fewer paying users in the near term, but are seen as critical for building a stronger foundation for sustainable growth.
To support this strategy shift, Bumble Inc. (NASDAQ:BMBL) is streamlining costs and reducing marketing spend, particularly on non-organic user acquisition channels. The company has identified $15 million in near-term cost savings and reduced its Q2 marketing budget by $20 million. Management is also investing in product innovations like an enhanced Discover tab, new verification tools, and AI-powered coaching features. While these changes may impact short-term growth, management believes they will lead to higher-quality user engagement and more sustainable long-term growth. With the product being insulated from tariffs and the US representing the core market, BMBL is one of the best American penny stocks to buy in 2025.
7. JetBlue Airways Corporation (NASDAQ:JBLU)
Stock price as of May 6th: $4.40
Number of Hedge Fund Holders: 33
JetBlue Airways Corporation (NASDAQ:JBLU) is a US-based low-cost airline operating over 1,000 daily flights to more than 100 destinations across the United States, Latin America, the Caribbean, Canada, and Europe. The company is headquartered in New York, but maintains major hubs in JFK airport, Boston, Fort Lauderdale, Los Angeles, Orlando, and San Juan.
JetBlue Airways Corporation (NASDAQ:JBLU) faced challenges in Q1 2025 due to weakening demand and an uncertain economic environment, with capacity down 4.3%. The company is taking decisive actions to address these challenges, including reducing capacity, limiting discretionary spending, and reevaluating fleet plans. Despite these headwinds, management remains committed to its long-term JetForward strategy, which aims to drive transformational change and return the airline to sustained profitability.
On the positive side, JetBlue Airways Corporation (NASDAQ:JBLU) is seeing some positive trends, including strong performance in premium segments and international markets, as well as improvements in operational metrics like A14 and Net Promoter Score. The company is also making progress with cost transformation initiatives and expects savings to ramp up in the second half of the year. Additionally, the company is pursuing new opportunities, such as a potential domestic airline partnership and expansion into secondary cities, which could provide future growth avenues. JBLU is down more than 40% since February 2025, under what we believe are temporary capacity headwinds induced by uncertainty and tariffs. JLBU is one of the best American penny stocks to buy now as it is currently trading at only 0.17x Price-to-Sales ratio.
6. Gannett Co., Inc. (NYSE:GCI)
Stock price as of May 6th: $3.15
Number of Hedge Fund Holders: 34
Gannett Co., Inc. (NYSE:GCI) is a media and marketing company that owns diversified assets such as “USA TODAY” and numerous local newspapers across the US; “Newsquest”, a network of over 150 local news brands in the UK; and Digital Marketing Solutions, offering services under the LocaliQ brand. GCI’s advantage consists of delivering trusted journalism and digital experiences while also running close relationships with small and medium-sized businesses.
Gannett Co., Inc. (NYSE:GCI) reported mixed results for Q1 2025, with total operating revenues declining 10.1% YoY to $571.6 million. However, the company saw improvements in its bottom line, with net loss narrowing to $7 million from $84 million in Q1 2024. Free cash flow grew 7.6% to $10.2 million. The company also continued to reduce its debt, paying down approximately $75 million in Q1. GCI reaffirmed its full year 2025 outlook, expressing confidence in its ability to improve revenue trends and achieve a third consecutive year of adjusted EBITDA and free cash flow growth, making it one of the best American stocks to buy now.
Looking ahead, Gannett Co., Inc. (NYSE:GCI) expects digital revenue performance to stabilize with potential for flat to modest growth in Q2 and more substantial growth later in the year. The company is focused on several strategic initiatives, including deepening audience engagement, expanding first-party data capabilities, and enhancing its digital marketing solutions product suite. GCI also sees potential upside from the recent DOJ ruling against Google, which could lead to a fairer and favorable digital advertising marketplace for publishers. Management remains optimistic about the company’s long-term growth prospects, citing its industry-leading scale, diverse digital businesses, and ongoing investments in digital initiatives.
5. Fluence Energy, Inc. (NASDAQ:FLNC)
Stock price as of May 6th: $4.19
Number of Hedge Fund Holders: 36
Fluence Energy, Inc. (NASDAQ:FLNC) provides energy storage solutions and optimization software for utility companies, independent energy producers, and grid operators in more than 50 countries. The company’s core offerings are modular, scalable battery energy storage systems and digital platforms for intelligent bidding and asset performance management.
Fluence Energy, Inc. (NASDAQ:FLNC) reported Q1 2025 revenue of $187 million, down 49% YoY, with a gross profit margin of 12.5%. The company lowered its fiscal 2025 revenue guidance to $3.1-$3.7 billion, primarily due to delays in signing three large contracts in Australia. Despite the guidance reduction, the new midpoint still represents a solid 26% YoY growth. FLNC is one of the best American stocks on our list as it ended Q1 with a record backlog of $5.1 billion, up 38% YoY, providing strong visibility for future revenue growth.
To mitigate any competitive pressures from Chinese players, Fluence Energy, Inc. (NASDAQ:FLNC) is accelerating product development and plans to launch a new platform with industry-leading energy density and performance. The company’s US domestic content strategy positions it well to navigate potential trade restrictions and tariffs. Management remains confident in the company’s ability to compete globally through technology innovation and integration of software and controls.
4. EVgo, Inc. (NASDAQ:EVGO)
Stock price as of May 6th: $3.67
Number of Hedge Fund Holders: 37
EVgo Inc. (NASDAQ:EVGO) is one of the largest public fast-charging networks for electric vehicles (EVs) in the US, operating more than 1,100 charging stations across 40+ states. The company achieved a leading position in the market through strong technological capabilities – charging stations are compatible with all fast-charge capable EVs – as well as through strategic placement of its chargers in high-traffic areas. EVGO is the winner on our recent list of 10 Most Volatile Stocks Under $3 For Day Trading.
EVgo Inc. (NASDAQ:EVGO) delivered another record quarter with strong results, achieving 36% YoY total revenue growth and nearly tenfold growth in three years. The company’s network performance showed impressive metrics, with average daily throughput per public store rising by 36% versus the same quarter last year and increasing more than fivefold in 3 years. The company added over 180 new operational stores in the quarter, bringing its total to over 4,200 operational stores, while maintaining a strong cash position of $171 million in cash, cash equivalents, and restricted cash.
EVgo Inc. (NASDAQ:EVGO) remains uniquely positioned in the EV fast charging landscape, having secured a $1.25 billion loan guarantee with the Department of Energy that funds its trajectory toward adjusted EBITDA breakeven this year and leverages free cash flow breakeven next year. EVGO’s business model appears resilient to current market challenges, with minimal impact expected from tariffs, as only approximately 25% of total CapEx cost per store is subject to tariffs, which secures the company’s place on our list of the best American stocks to buy now. The company expects to deliver $10 million in CapEx efficiencies this year that more than offset the estimated impact of tariffs in 2025, while its owner-operator model ensures these tariffs won’t impact adjusted EBITDA for its charging business.
3. Marqeta, Inc. (NASDAQ:MQ)
Stock price as of May 6th: $3.90
Number of Hedge Fund Holders: 37
As a financial technology company, Marqeta, Inc. (NASDAQ:MQ) specializes in modern card issuing and payment processing solutions. Its open cloud-native platform enables businesses to create customized debit, credit, and prepaid card programs with features like Just-in-Time funding, dynamic spend controls, and tokenization for digital wallets. MQ operates globally and serves a diverse clientele across industries such as digital banking, on-demand services, expense management, and “Buy Now, Pay Later” providers.
Marqeta, Inc. (NASDAQ:MQ) delivered strong financial results in Q4 2024, with total process volume growing 29% YoY to $80 billion and net revenue increasing 14% to $136 million. The company achieved a gross profit of $98 million, up 18% from Q4 2023, and an adjusted EBITDA of $13 million, representing a 9% margin. These results demonstrate MQ’s ability to grow at scale while improving profitability. The company made significant progress in streamlining program launch timelines and enhancing bank partnerships, which should support future growth.
Looking ahead, Marqeta, Inc. (NASDAQ:MQ) is focused on three key strategic pillars: deepening platform breadth, expanding solutions offered, and strengthening leadership in payments innovation. The company announced a partnership with American Express to offer its network as a new option for credit and debit card programs starting later in 2025. MQ is also acquiring TransactPay to enhance its program management capabilities in Europe. For 2025, the company expects net revenue growth between 16% and 18%, with adjusted EBITDA margin in the range of 9% to 10%. These initiatives and projections indicate MQ’s commitment to sustainable, profitable growth, cementing the company’s third place on our list of the best American stocks to buy.
2. Altice USA, Inc. (NYSE:ATUS)
Stock price as of May 6th: $2.65
Number of Hedge Fund Holders: 38
Altice USA, Inc. (NYSE:ATUS) delivers internet, television, mobile, and voice services to more than 4.6 million residential and business customers in the US. The company also operates Optimum Media, offering audience-based, multiscreen advertising solutions to local, regional, and national businesses. The ATUS has built a decent national scale, with a presence in 21 states.
The year 2024 was transformative for Altice USA, Inc. (NYSE:ATUS), with the company achieving significant milestones in fiber deployment, reaching 3 million fiber passings and surpassing 538,000 fiber customers. The company recorded its best quarter for fiber net additions with 57,000, and achieved impressive mobile growth with 40,000 line net additions, marking the best mobile performance in five years. Despite these achievements, broadband subscriber net losses were 39,000 in Q4, affected by hurricane impacts in North Carolina and various pilot programs. Revenue performance showed mixed results, with total revenue of $9 billion declining 3.1% YoY, though this represented an improvement from prior year declines.
Altice USA, Inc. (NYSE:ATUS) is implementing a strategic network roadmap that includes fiber expansion and multi-gig rollout across its footprint through network innovations and disciplined investments. For 2025, the company expects to stabilize adjusted EBITDA and enhance capital efficiency, targeting approximately $1.3 billion in capital expenditure. The company’s new pricing approach is expected to deliver up to an incremental $100 million in revenue in 2025, while operational efficiencies are projected to moderate other operating expenses by 4% to 6% by the end of 2026. Additionally, the company maintained positive free cash flow growth of 23% YoY to $149 million in 2024, despite increased cash interest costs. ATUS transformation and commitment already bring improvements in financial performance and future guidance, which makes it one of the best American stocks to buy on our list.
1. Lumen Technologies, Inc. (NYSE:LUMN)
Stock price as of May 6th: $4.26
Number of Hedge Fund Holders: 44
Lumen Technologies, Inc. (NYSE:LUMN) provides network connectivity, cloud, and security services to enterprises and government entities globally. LUMN emerged as a key player in the AI ecosystem by partnering with major technology firms to support high-capacity connectivity needs in data centers. The company primarily offers fiber-based internet connectivity delivered through Tier 1 networks.
Lumen Technologies, Inc. (NYSE:LUMN) demonstrated strong financial results in Q1 2025, with North American business revenue increasing by 7.9% YoY. The company strengthened its balance sheet through a term loan refinancing, which reduced annual interest expense by approximately $55 million and extended loan maturity to 2032. The company’s performance was further validated by credit rating upgrades from Moody’s and S&P Global, who recognized the AI-driven demand for Lumen PCF and a stable outlook.
Lumen Technologies, Inc. (NYSE:LUMN) is focused on three strategic priorities: driving operational excellence in core businesses, building the backbone for the AI economy, and cloudifying telecom. The company is making significant progress in its modernization efforts, implementing new digital enterprise applications, unifying network architectures, and using AI to drive intelligence and automation. The company is confident in generating at least $250 million in savings exiting 2025 and $1 billion exiting 2027. Through the Lumen Digital platform, the company is transforming its business model by enabling cloud economics and providing customers with network-as-a-service offerings that deliver real-time on-demand connectivity.
Overall, Lumen Technologies, Inc. (NYSE:LUMN) ranks first on our list of the best American penny stocks to buy now. While we acknowledge the potential of LUMN to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than LUMN but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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