In this article, we will explore the 10 best high-risk penny stocks to buy right now.
On March 17, a report published by Royce Investment Partners highlighted an interesting aspect of the performance of microcap stocks. Between the lows of April 2025 and the end of February 2026, the Russell Microcap Index gained 64.5% vs the S&P 500’s 39.6% and the Russell Large-cap index’s 39.7%. This suggests that despite the high risk, microcaps have been worth it for investors.
With retail interest slowing down in AI stocks and the Mag 7 stocks now often criticized to be the ‘Lag 7’, retail traders continue to look for high-risk opportunities for outsized gains. Royce Investment Partners believes smaller companies are set to repeat their previous performance this year:
We saw this dynamic begin to play out in 2025, when smaller companies on average had significant earnings outperformance compared to their large- and mega-cap peers—and we expect this trend to continue in 2026.
The war in Iran and its subsequent effects on the global economy have led traders to flee these stocks, creating an interesting opportunity for new buyers. If retail traders are to play the high-risk game, penny stocks offer exactly the opportunity to utilize the positive sentiment around small-cap stocks.
To identify such penny stocks, we decided to create a list of the 10 best high-risk penny stocks to buy right now.
Our Methodology
To come up with our list of 10 best high-risk penny stocks to buy right now, we looked at stocks with a market cap of under $2 billion, trading at a price under $5. These stocks have a beta of 1.5 and a one-month volatility of at least 10%. Moreover, they are popular among analysts and hedge funds, with an average target price indicating at least 30% upside. Finally, we ranked these stocks in ascending order of the number of hedge funds holding them.
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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
Note: All share price data in the article is as per market close on March 20.
10. Safe Pro Group Inc (NASDAQ:SPAI)
Safe Pro Group Inc (NASDAQ:SPAI) received two rating updates from Wall Street in the last month, both of which reiterated the stock’s significant upside potential. On February 26, Max Michaelis of Lake Street maintained his $9 price target on the stock, implying 110% further upside from here. Michael Latimore of Northland Securities was even more bullish, assigning a price target of $13 on February 23.
The company also announced on February 20 that it had signed a $1 million agreement with a US contractor offering AI-powered video and imagery analysis systems through its wholly owned subsidiary Safe Pro AI LLC. These systems have threat detection capabilities and involve AI processing at the edge, which enables them to be deployed directly on autonomous vehicles and sensors in the battlefield, without needing to stay connected to a cloud service, for example. The award further solidifies SPAI’s role in AI-driven defense solutions for the US government. It also encourages the firms that have invested in the company, such as Ondas Inc (NASDAQ:ONDS) and Unusual Machines (NYSEAMERICAN:UMAC), to continue backing the firm in its future endeavors.
Safe Pro Group Inc (NASDAQ:SPAI) is an American aerospace and defense company that offers security and protection products along with drone imagery analysis using AI. It serves both the US government and public infrastructure clients. It is headquartered in Aventura, Florida.
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