In this article, we will look at the 10 Best Penny Stocks to Buy for 2026.

A rally in large-cap growth stocks was the catalyst behind US equities powering to record highs in 2025. Amid the rallies, premium valuations are already triggering concerns in the markets, with most counters trading above their historical norms.

Small-cap and penny stocks could be on the cusp of usurping their larger counterparts in 2026 and lead the markets higher. Consequently, Jonathan Krinsky, BTIG managing director and chief market technician, expects the breakout in small caps to stick for the better part of the year.

While the Russell 2000 small-cap index was up by 13% in 2025, Jefferies strategist Steven DeScantis insists the index could be in for significant gains.

According to DeScantis, lower interest rates alongside a steeper yield curve will ensure companies with small market caps come out on top.

“With earnings growth set to improve, a driver for our themes will be a broader equity market, with more stocks beating their indexes than average,” he added. “The smallest of the small is very cheap; Performs better when market broadens out.” Additionally, he expects small companies with a market cap of less than $1 billion to benefit from a pickup in mergers and acquisition activities.

“Given how unloved small caps have become, we think finding a partner makes sense, cash levels stand at $2.4T, and HY market is wide open,” DeScantis wrote. “Companies want to buy growth, scale matters, and getting bigger makes sense these days.”

Amid renewed focus on small-cap companies, let’s take a look at some of the best penny stocks to buy in 2026.

Our Methodology

To compile our list of 10 Best Penny Stocks to Buy for 2026, we used Finviz screener and other online sources to identify stocks trading for less than $5 a share. We focused on penny stocks with upside potential of more than 100% that were popular among elite hedge funds in the third quarter of 2025. Finally, we ranked the stocks in ascending order based on the hedge fund stakes in them.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research shows 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).

Note: The upside potential and share price data are as of January 12, 2026.

Best Penny Stocks to Buy for 2026

10. American Bitcoin Corp (NASDAQ:ABTC)

Stock Upside Potential: 109.42%

Share Price: $1.82

Number of Hedge Fund Holders: 5

American Bitcoin Corp (NASDAQ:ABTC) is one of the best penny stocks to buy for 2026. On December 16, American Bitcoin Corp (NASDAQ:ABTC) reiterated that it is one of the 20 publicly traded Bitcoin treasury companies by holdings. That’s in part because it held 5,098 Bitcoin in strategic reserves as of December 14.

The company has successfully accumulated Bitcoin through a combination of mining operations and strategic purchases. It also holds Bitcoin in custody in addition to being pledged for miner purchases under an agreement with BITMAIN. Amid the soaring BTC holdings, the company is introducing a Bitcoin Yield Metric to complement its Satoshis Per Share disclosure.  The new metric measures the percentage change in SPS over defined periods, thereby informing investors about how Bitcoin evolves.

“In just over three months since our Nasdaq listing, we have surged past dozens of companies with our Bitcoin reserve now exceeding 5,098 BTC,” said Eric Trump, Co-Founder and Chief Strategy Officer of American Bitcoin.

On December 10, Roth MKM analyst Darren Aftahi initiated coverage of the stock with a Buy rating and a $4 price target.

American Bitcoin Corp (NASDAQ:ABTC) is a Bitcoin mining and treasury management company, majority owned by Canadian miner Hut 8 Mining. It provides computing power to mining pools, which use it to operate nodes and validate blocks on the blockchain.

9. Angel Studios Inc. (NYSE:ANGX)

Stock Upside Potential: 148.92%

Share Price: $4.31

Number of Hedge Fund Holders: 5

Angel Studios Inc. (NYSE:ANGX) is one of the best penny stocks to buy for 2026. On December 30, Angel Studios Inc. (NYSE:ANGX) announced it had achieved 25% member growth since, surpassing 2 million paying guild members.

The 2 million paying members are a significant milestone, coming barely a year after surpassing 1 million members in March 2025. The milestone validates the company’s audience-centric model and the values-driven stories that it champions. It also underscores the success of the recently released animated epic DAVID, which is now the highest-grossing faith-based animated theatrical opening of all time.

The 25% member growth underlines the company’s strategic focus on broadening its film and television series slate. The company has successfully introduced 430 new films, television episodes, and specials to its Guild members. In addition to enhancing the pipeline, the company has also made significant strides in owning its highest-performing franchises.

“Strong collaboration between the Guild and our filmmaker partners is our creative engine, and this growth demonstrates that our members want to participate in directly shaping the entertainment they enjoy. As we expand our slate, we are focused on distributing films and television series that earn exceptionally high audience satisfaction, in theaters and on the Angel platform.” Neal Harmon, Co-Founder and CEO of Angel, said.

The 2 million Guild members milestone also came on the heels of analysts at Oppenheimer initiating coverage of the stock with an Outperform rating and an $8 price target.

Angel Studios Inc. (NYSE:ANGX) is a community-driven film studio and streaming platform that lets audiences fund, choose, and distribute family-friendly movies and shows, often with faith-based or positive themes, by leveraging equity crowdfunding and its “Angel Guild” to bypass traditional Hollywood gatekeepers, producing content like The Chosen and Sound of Freedom.

8. Hive Digital Technologies Ltd. (NASDAQ:HIVE)

Stock Upside Potential: 185.95%

Share price: $3.25

Number of hedge fund holders: 9

Hive Digital Technologies Ltd. (NASDAQ:HIVE) is one of the best penny stocks to buy in 2026. On January 7, Hive Digital Technologies Ltd. (NASDAQ:HIVE) reported strong Bitcoin production for December 2025, generating 306 BTC, nearly triple the amount mined a year earlier, even as network difficulty climbed about 40%. The company averaged 9.9 BTC per day, supported by a hashrate of 23.3 EH/s, which peaked at 24 EH/s, and a fleet efficiency of 17.5 joules per terahash. For the full year, Bitcoin production reached 2,311 BTC, a 31% increase from 2024, highlighting the company’s ability to scale despite the halving and record network difficulty.

HIVE is now focused on expanding its infrastructure, with plans to add 100 MW of hydro-powered capacity at its Yguazú campus in Paraguay by the third quarter of 2026. Once completed, the company’s renewable energy footprint will rise to 540 MW across Paraguay, Canada, and Sweden. Management continues to emphasize capital discipline and free cash flow generation, positioning green energy as a long-term advantage.

Earlier on December 12, Rosenblatt lowered its price target to $6.50 from $10 while maintaining a Buy rating, citing competitive pressure and Bitcoin price volatility. Management remains confident in HIVE’s ability to protect margins and grow through 2026.

Hive Digital Technologies Ltd. (NASDAQ:HIVE) develops and runs eco‑friendly data centers that support Bitcoin mining and high‑performance computing for AI, powered by renewable energy such as hydroelectricity.

7. Rezolve AI PLC (NASDAQ:RZLV)

Stock Upside Potential: 184.91%

Share Price: $3.06

Number of Hedge Fund Holders: 14

Rezolve AI PLC (NASDAQ:RZLV) is one of the best penny stocks to buy for 2026. On December 23, Rezolve AI PLC (NASDAQ:RZLV) announced it has secured multiple commercial deployments as it continues to expand across global markets. The company has secured commercial wins, live implementations, and strategic partnerships that underscore strong momentum and growing demand for its Conversational Commerce, Multi-Search, and AI-driven engagement platform.

VogaCloset, a UK platform, is the first to implement its Conversational Commerce technology following testing. Similarly, India’s Snapdeal has signed a multiyear agreement with Revolve and implemented its Multi-Search capability. Likewise, Reliance Retail fashion platform, AJIO, has also expanded its strategic partnership with the company.

“What we’re seeing across every market is clear,” said Daniel M. Wagner, CEO of Rezolve Ai. “When retailers move from search to conversation, engagement increases, conversion improves and customers stay longer. These wins are not pilots or experiments, they are live, enterprise-grade deployments that we believe validate Rezolve as the AI commerce layer for global brands.”

The wave of commercial deals follows, H.C. Wainwright, reiterating a Buy rating and a $10 price target on the stock. On December 19, I was impressed by reports that December revenue is poised to exceed $17 million.

Rezolve AI PLC (NASDAQ:RZLV) is a UK-based technology company that provides AI-powered conversational commerce solutions for the retail and e-commerce sectors, using its own Large Language Model (LLM), brainpowa, to create personalized, human-like shopping experiences that boost engagement, conversion rates, and revenue.

6. ImmunityBio, Inc. (NASDAQ:IBRX)

Stock Upside Potential: 227.23%

Share Price: $2.59

Number of Hedge Fund Holders: 18

ImmunityBio, Inc. (NASDAQ:IBRX) is one of the best penny stocks to buy for 2026. On December 16, ImmunityBio, Inc. (NASDAQ:IBRX) delivered positive clinical trial results for its ANKTIVA plus BCG treatment. The candidate drug being trialed in high-grade papillary non-muscle invasive bladder cancer demonstrated strong long-term efficacy in patients.

The trial results showed 96% disease-specific survival and 83% progression-free survival at 36 months. The study also demonstrated high cystectomy-avoidance rates of 92% at 12 months and 82% at 36 months. The positive clinical trial results are a significant milestone, given that there are few treatment options for invasive bladder cancer, with cystectomy considered the definitive treatment.

“Prolongation of progression-free survival, disease-specific free survival and avoidance of bladder removal are clinically meaningful goals of next-generation chemotherapy-free immunotherapy. Our findings provide evidence that ANKTIVA plus BCG would offer a novel and efficacious treatment option for these patients,” said lead author Sam S. Chang, M.D., Professor of Urology and Chief Surgical Officer of the Vanderbilt Ingram Cancer Center.

Meanwhile, H.C. Wainwright analyst Andres Y. Maldonado has reiterated a Buy rating on the stock and set an $8 price target. The positive rating is in response to the European Medicines Agency’s positive opinion and recommendation for authorization for AKTIVA in combination with BCG.

ImmunityBio, Inc. (NASDAQ:IBRX) is a vertically integrated biotechnology company developing next-generation therapies and vaccines that bolster the natural immune system to defeat cancers and infectious diseases.

5. Absci Corporation (NASDAQ:ABSI)

Stock Upside Potential: 122.67%

Share price: $3.40

Number of hedge fund holders: 18

Absci Corporation (NASDAQ:ABSI) is one of the best penny stocks to buy in 2026. On January 8, Morgan Stanley downgraded Absci Corporation (NASDAQ:ABSI) to Equalweight from Overweight and cut its price target to $4.32 from $5.80, citing higher risk and limited near-term visibility following the company’s third-quarter update. Interim Phase 1 data for ABS-101, Absci’s TL1A program, came in below expectations, particularly on half-life performance, which trailed next-generation competitors. In response, the company decided not to advance ABS-101 internally and is now exploring alternative indications and potential partnerships.

Morgan Stanley removed ABS-101 from its financial model, where it had been tied to inflammatory bowel disease, and replaced it with ABS-201, a program targeting androgenetic alopecia. The firm assigns a 25% probability of success and estimates peak risk-adjusted sales of roughly $400 million. Analysts cautioned, however, that execution risk is elevated given the program’s early stage and Absci’s plan to pursue development independently. They also noted uncertainty around the company’s shift toward dermatology and cosmetology-adjacent indications, areas where its competitive position is less established.

On December 11, Absci presented preclinical data for ABS-201 showing activity in human scalp tissue, suggesting potential benefits for hair growth. Interim data from the Phase 1/2a HEADLINE study are expected in the second half of 2026.

Absci Corporation (NASDAQ:ABSI) is a clinical‑stage biotech firm leveraging its proprietary AI platform to design and develop innovative protein‑based therapeutics.

4. Invivyd, Inc. (NASDAQ:IVVD)

Stock Upside Potential: 298.41%

Share price: $2.45

Number of hedge fund holders: 20

Invivyd, Inc. (NASDAQ:IVVD) is one of the best penny stocks to buy in 2026. On January 8, Invivyd, Inc. (NASDAQ:IVVD) reported preliminary fourth-quarter 2025 net product revenue of $17.2 million from PEMGARDA (pemivibart), representing 25% growth year over year and a 31% increase from the prior quarter. The company ended 2025 with $226.7 million in cash and equivalents, strengthened by financing completed in the second half of the year. With a current ratio of 2.47, Invivyd enters 2026 with solid liquidity to support operations and pipeline advancement.

Invivyd has launched its DECLARATION Phase 3 pivotal trial for VYD2311, a monoclonal antibody designed as an alternative to vaccination for COVID-19 prevention. The program received FDA Fast Track designation in December 2025. The triple-blind, randomized study will enroll approximately 1,770 participants, with top-line results expected by mid-2026. Management pointed to continued demand for antibody-based prevention as vaccination rates decline, while PEMGARDA’s 93.3% gross margin highlights the product’s commercial potential.

The company is also broadening its pipeline beyond COVID-19. VBY329, an RSV antibody candidate, is expected to reach IND readiness in late 2026, while a measles antibody program remains in preclinical development with candidate selection planned for early 2026. Management stated existing cash resources are sufficient to fund upcoming clinical and development milestones through 2026.

Invivyd, Inc. (NASDAQ:IVVD) develops next‑generation antibody drugs aimed at long‑lasting effectiveness against evolving viruses, leveraging a proprietary platform to deliver durable therapies.

3. Atai Beckley N.V. (NASDAQ:ATAI)

Stock Upside Potential: 230.60%

Share Price: $3.76

Number of Hedge Fund Holders: 21

Atai Beckley N.V. (NASDAQ:ATAI) is one of the best penny stocks to buy in 2026. On December 23, Jones Trading initiated coverage of Atai Beckley N.V. (NASDAQ:ATAI) with a Buy rating and a $16 price target. According to the research firm, the company boasts of differentiated opportunities owing to its pipeline of psychedelic and empathogenic drugs targeting considerable neuropsychiatric indications.

Jones Trading expects Atai Beckley to benefit from emerging trends favoring the development of drugs in different classes. For starters, the company is well-positioned to benefit from its lead assets, BPL-003 and VLS-01, for the treatment of resistant depression (TRD). Additionally, the research firm is buoyed by the TRD market, which is large enough and has sufficient unmet need to accommodate multiple treatments.

The positive stance comes on the heels of the company developing its pipeline backed by a strengthened balance sheet, following the raising of $300 million. It has also advanced multiple clinical programs into late-stage development. The company has also deepened its position in next-generation mental health therapeutics through its strategic partnership with Beckley Psytech.

“As we look ahead, AtaiBeckley is entering a pivotal phase and is well positioned to translate scientific leadership into long-term value for both patients and shareholders, as our recent addition to the NBI further validates,” said Srinivas Rao, Chief Executive Officer of AtaiBeckley.

Atai Beckley N.V. (NASDAQ:ATAI) is a clinical-stage biopharmaceutical company that develops treatments for mental health disorders. The Company’s pipeline includes psychedelic and non-psychedelic compounds targeting depression, anxiety, and other unmet needs in psychiatry.

2. Taysha Gene Therapies Inc. (NASDAQ:TSHA)

Stock Upside Potential: 125.86%

Share Price: $4.86

Number of Hedge Fund Holders: 32

Taysha Gene Therapies Inc. (NASDAQ:TSHA) is one of the best penny stocks to buy for 2026. On January 6, the company confirmed that the dosing of the first patient in the REVELA pivotal trial began. The trial is evaluating TSHA-102, a gene therapy for Rett syndrome.

The trial is poised to evaluate 15  females between the ages of 6 and 22 years with Rett syndrome. The focus is on ascertaining the response rate, which is the percentage of patients who gain or regain one or more of 28 natural history-defined developmental milestones.  The company will complete dosing in both the REVEAL pivotal trial and ASPIRE trial in the second quarter.

The Rett syndrome trial comes in Jefferies, reiterating Taysha Gene Therapies as a promising biotech company poised for significant growth in 2026. The research firm expects the stock to receive a boost from pivotal trial data and regulatory milestones across multiple therapeutic areas. The firm has touted the company’s Rett syndrome therapy, TSHA-102, owing to its potential to generate $2 billion in peak revenue.

Taysha Gene Therapies Inc. (NASDAQ:TSHA) is a clinical-stage biotech company developing adeno-associated virus (AAV)-based gene therapies to cure severe, single-gene (monogenic) disorders of the central nervous system (CNS), with a primary focus on Rett syndrome and the aim of providing disease-modifying treatments for debilitating neurological conditions.

1. Geron Corporation (NASDAQ:GERN)

Stock Upside Potential: 191.97%

Share Price: $1.43

Number of Hedge Fund Holders: 37

Geron Corporation (NASDAQ:GERN) is one of the best penny stocks to buy for 2026. On January 6, Geron Corporation (NASDAQ:GERN) amended its loan agreement with Biopharma Credit Investments and BPCR Limited Partnership. The deal relates to a secured term loan facility of up to $250 million.

Under the new agreement, the facility is to be split into three tranches. A $125 million Tranche A loan was funded on November 1, 2024, $75 million Tranche B loan is available to the company, and a $50 million Tranche C loan is available to the company upon achieving the specified trailing 12-month RYTELO revenue milestone. Geron could prepay the loans, in part or in full, before maturity, subject to a premium ranging from 1% to 3% of the principal.

The credit facility amendment comes on the heels of the company’s affirmation of a strategic restructuring plan. On December 11, Geron Corporation (NASDAQ:GERN) announced a restructuring plan to cut about one‑third of its workforce, eliminating roughly 85 positions from its 260‑employee base. The move is intended to streamline operations while focusing on U.S. sales of Rytelo (imetelstat) in LR‑MDS, international expansion, and the Phase 3 IMpactMF trial in myelofibrosis. Despite reporting $183.4 million in revenue over the past year, Rytelo sales have recently stagnated, with Q3 2025 revenues slipping below Q2 and October tracking at $15 million.

H.C. Wainwright reiterated a Neutral rating, noting expenses should decline in 2026 and profitability could be reached by the second half of the year. Geron plans to update its European commercialization strategy in the first half of 2026 and release interim IMpactMF survival data later in the year. The company maintains strong financial flexibility with more cash than debt and a current ratio of 5.96, though analysts do not expect profitability in 2025.

Geron Corporation (NASDAQ:GERN) is a commercial-stage biopharmaceutical company focused on developing and selling therapies for blood cancers. Its lead product, Rytelo (imetelstat), is FDA-approved for certain lower-risk myelodysplastic syndromes.

While we acknowledge the potential of Geron Corporation (NASDAQ:GERN) to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than GERN and that has 100x upside potential, check out our report about this cheapest AI stock.

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