On February 27, Chad Larson, senior portfolio manager at MLD Wealth of CG Wealth Management, joined BNN Bloomberg to discuss the markets as investors rotate out of big tech. The month of February ended on a down note for the markets. There is anxiety regarding potential AI disruption and the massive capital expenditures being funneled into data centers and server farms. Larson joined to discuss these themes and noted that as of late February 2026, the US market was barely up for the year, with every MAG7 tech stock experiencing a decline.
Larson explained that a major rotational trade is currently underway. Investors are moving away from the crowded tech trade that has dominated for years, leading to a sense of fatigue. Even positive news, such as an earnings beat, resulted in the stock being traded down, suggesting that the market has already priced in high expectations. Larson observed that leadership is rotating toward more predictable, stable cash flows in sectors like industrials and materials. He summarized this shift with the sentiment that boring is beautiful again, as investors seek stability amidst heightened volatility and intraday fluctuations in the VIX.
He also mentioned that clients are becoming increasingly nervous about their large embedded gains in tech. Many investors waited until the new year to sell to defer taxes, but Larson cautioned that saying goodbye to long-term winners is emotionally difficult. He warned against the common mistake of cutting flowers and watering weeds, selling winning stocks too early while holding onto losing ones, noting that an investment thesis should not change simply because of price action.
That being said, we’re here with a list of the 10 best low cost stocks to buy under $5.
Our Methodology
We used screeners to identify low-cost stocks that are trading below $5 per share, and limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among analysts and elite hedge funds.
Note: All data was sourced on March 3.
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 Low Cost Stocks to Buy Under $5
10. AtaiBeckley Inc. (NASDAQ:ATAI)
AtaiBeckley Inc. (NASDAQ:ATAI) is one of the best low cost stocks to buy under $5. On March 3, AtaiBeckley announced a successful End-of-Phase 2 meeting with the FDA regarding BPL-003, a proprietary intranasal formulation of mebufotenin benzoate for treatment-resistant depression/TRD. The FDA indicated support for the proposed Phase 3 program, providing constructive feedback on the design and safety database requirements for this chronic indication.
This milestone follows the Breakthrough Therapy designation granted in late 2025, with the company remaining on track to initiate the Phase 3 program in the second quarter of 2026. The Phase 3 program consists of two parallel pivotal studies, ReConnection 1 and ReConnection 2, followed by a 52-week open-label extension to assess long-term safety and individualized retreatment. ReConnection 1 will evaluate single doses of 8 mg and 4 mg against a placebo to characterize the dose-response relationship, while ReConnection 2 will investigate a two-dose induction model on Day 1 and Day 15.
Designed to fit within existing interventional psychiatry workflows, BPL-003 aims to offer a rapid and durable treatment option with an approximately two-hour in-clinic experience. AtaiBeckley Inc. (NASDAQ:ATAI) believes that this model addresses significant barriers for patients and providers by requiring only a few treatments per year.
AtaiBeckley Inc. (NASDAQ:ATAI) is a clinical-stage biopharmaceutical company that researches, develops, and commercializes mental health treatments in the US, Germany, and Canada.
9. Hertz Global Holdings Inc. (NASDAQ:HTZ)
Hertz Global Holdings Inc. (NASDAQ:HTZ) is one of the best low cost stocks to buy under $5. On February 26, Hertz Global reported a financial turnaround for Q4 and the full-year 2025, driven by its Back-to-Basics strategy. The company achieved a $2 billion year-over-year improvement in profitability, with 2025 revenue reaching $8.5 billion. The CEO highlighted that these gains were supported by a 44% improvement in depreciation per unit and a 200-basis-point increase in fleet utilization.
Despite a complex environment, Hertz delivered its strongest year-over-year revenue performance in nearly two years, ending Q4 with $1.5 billion in liquidity. Q4 results faced over $100 million in transitory headwinds, including a government shutdown, technology vendor outages, and high vehicle recall levels. Additionally, a non-cash depreciation charge of $60 million was recorded due to revised third-party residual value forecasts.
However, operational discipline led to a 6% year-over-year improvement in adjusted direct operating expenses per transaction day. Customer experience also saw a major boost, with the Net Promoter Score increasing by nearly 50% throughout the year, reflecting better fleet quality and service reliability. For 2026, Hertz Global Holdings Inc. (NASDAQ:HTZ) expects mid-single-digit revenue growth in the first quarter, supported by a positive pricing environment and improving residual values.
Hertz Global Holdings Inc. (NASDAQ:HTZ) operates as a vehicle rental company. It has two segments: Americas RAC and International RAC.
