On October 2, Dan Veru, Palisade Capital Management senior partner and CIO, joined ‘Power Lunch’ on CNBC to discuss the opportunities available in small-cap stocks and talk about the start of the first phase of long-term small-cap outperformance relative to large-cap stocks. Veru believes that small-cap stocks have been ignored for too long and that the combined value of every stock in the entire Russell 2000 index is smaller than that of NVIDIA alone. He described this disparity as an extreme distortion, although he quickly clarified he was not speaking negatively about NVIDIA, which has seen extraordinary growth. He asserted that many other companies are really high quality but are currently being ignored. Veru then declared that the market is at the very first phase of a long cycle of small-cap outperformance relative to large-cap.
Earlier on September 16, Ali Dibadj, Janus Henderson Investors CEO, joined CNBC’s ‘Squawk Box’ to discuss the latest market trends. The main discussion began with fixed income, where Dibadj asserted that the securitized sector of the market continues to trade cheaply. He expects the duration to be extended because the market is at the beginning of a cycle of easing. At the current peak of the cycle, investors are expected to pursue two strategies: seeking longer duration elements and looking for higher quality due to the slowing economy. Dibadj noted that the securitized area is where investors can find both higher quality and a good spread. He concluded his discussion by stressing the firm’s belief that the broad base of small and mid-cap stocks is way undervalued. He acknowledged the need for careful selection given the slowing economy, but maintained that small- and mid-cap stocks have enormous potential to deliver in the near future.
That being said, we’re here with a list of the 10 best long-term penny stocks with huge upside potential.
Methodology
We sifted through the Finviz stock screener to compile a list of penny stocks that were trading below $5. Then, for the best long-term stocks, we included stocks with a 5-year revenue compound annual growth rate of at least 20%. We then selected the 10 stocks that had an upside potential of over 30%. The stocks are ranked in ascending order of their upside potential. We have also added the hedge fund sentiment for each stock, as of Q2 2025.
Note: All data was sourced on October 21.
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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
10 Best Long Term Penny Stocks with Huge Upside Potential
10. Zedge Inc. (NYSE:ZDGE)
Share Price as of October 21: $3.32
5-Year Revenue CAGR: 27.65%
Number of Hedge Fund Holders: 6
Average Upside Potential as of October 21: 49.25%
Zedge Inc. (NYSE:ZDGE) is one of the best long term penny stocks with huge upside potential. On October 6, Zedge launched Tapedeck, which is a new music app and service. The company designed Tapedeck to offer musicians greater control over their work and fairer compensation. The initiative extends Zedge’s successful creator-first model, which began with the Zedge Premium marketplace in 2017 and has since paid out millions of dollars annually to creators globally.
Tapedeck is the concept of Tim Quirk, Zedge’s SVP of Product and a veteran of the music industry. Quirk has a history of involvement in the digital music landscape, including being the lead singer of Too Much Joy, launching Rhapsody in 2001, contributing to the development of Google Play in 2011, and founding Freeform Development, which is a startup that Zedge later acquired.
Quirk noted that fair artist compensation was once the norm, citing Rhapsody’s initial standard of a penny per play and FreeForm’s success in proving superfans would pay extra to support artists.
Zedge Inc. (NYSE:ZDGE) builds digital marketplaces and competitive games around content that people use to express themselves.
9. AmpliTech Group Inc. (NASDAQ:AMPG)
Share Price as of October 21: $4.02
5-Year Revenue CAGR: 43.00%
Number of Hedge Fund Holders: 3
Average Upside Potential as of October 21: 49.25%
AmpliTech Group Inc. (NASDAQ:AMPG) is one of the best long term penny stocks with huge upside potential. On September 30, AmpliTech Group announced that it had joined the ORAN Alliance and the Telecom Infra Project/TIP. Both organizations are key drivers in the global adoption of Open Radio Access Networks/ORAN 5G.
AmpliTech’s engagement in ORAN 5G is translating major Letters of Intent/LOIs into tangible business. A $78 million LOI with a global Open RAN systems integrator has already generated over $2 million in funded orders. A separate $40 million LOI has yielded more than half of its projected value in funded orders, in addition to $3 million in orders that exceeded the original LOI’s expected value.
The company is also integrating AI and ML into its ORAN 5G and Wi-Fi 6/7 solutions to boost network optimization, security, and energy efficiency. AmpliTech is positioned to showcase its ORAN 5G technology, which includes its highest configuration 64T64R MIMO radio designed for densely populated and military applications.
AmpliTech Group Inc. (NASDAQ:AMPG) designs, engineers, and assembles microwave component-based amplifiers. It operates in two segments: Manufacturing & Engineering and Distribution.
Hedge Fund Resource Center