Investors are grappling with Trump-fueled stock market volatility in 2025. On March 12, 2025, Yahoo Finance reported that Penny Pennington, CEO of Edward Jones, explained on Yahoo Finance’s Opening Bid podcast that this volatility should have been expected. She noted that after years of relatively calm markets where we didn’t see the usual pullbacks, typically ranging from 5% to 15%. She further pointed out that the current environment, marked with uncertainties from tariffs and policy changes, is bound to provoke market reactions.
READ ALSO: 8 Fastest Growing AI Stocks To Buy Right Now and 10 Cheap Technology Stocks to Buy According to Hedge Funds.
The markets have been particularly volatile this year due to concerns about tariffs and potential economic slowdowns. The market has taken a hit, with the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all dropping around 5% on average in March alone. Large-cap tech companies have led this downturn. For the year, the Nasdaq has declined nearly 10%, the S&P 500 by 6%, and the Dow by 3%.
Recent economic data for consumer confidence from the Dallas Fed survey highlights growing caution among consumers and businesses. This has further fueled volatility as markets adjust to a potential slowdown in growth.
Pennington’s advice to investors is to stay prepared for several more years of volatility under the Trump administration.
The mix of policy uncertainty, tariff impacts, and inflation concerns has created a volatile environment, and this is likely to continue. Despite these concerns, some penny stocks continue to attract attention for their promising prospects.
With this background in mind, let’s take a look at the 10 best stocks under $3 to buy now.
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Methodology
To compile our list of the 10 best stocks under $3 to buy now, we used the Finviz stock screener. We sorted our results based on market capitalization and picked the top 20 companies with a share price of under $3 as of March 10, 2025. Next, we focused on the top 10 stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q4 2024 database of more than 1,000 elite hedge funds. Finally, the 10 best stocks under $3 to buy now were ranked in ascending order based on the number of hedge funds holding stakes in them as of Q4 2024.
Why do we care about what hedge funds do? 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 Best Stocks Under $3 to Buy Now
10. AMC Entertainment Holdings, Inc. (NYSE:AMC)
Share Price: $2.98
Number of Hedge Fund Holders: 20
AMC Entertainment Holdings, Inc. (NYSE:AMC) is an American movie exhibition company that ranks among the best stocks under $3 to buy. With approximately 870 theatres and 9,800 screens across the globe, it is the largest movie exhibition company in the world.
The company is committed to innovation and enhancing guest experience as it looks to strengthen its position in the global movie exhibition industry. This commitment helped AMC Entertainment Holdings, Inc. (NYSE:AMC) attract over 62 million guests to its theaters worldwide in Q4 2024, marking a post-pandemic Q4 record attendance and a 20% increase compared to 2023. Complementing this attendance milestone, food and beverage revenue per patron also reached $7.15 to mark an all-time Q4 record for AMC Entertainment Holdings, Inc. (NYSE:AMC). Looking ahead to 2025 and beyond, the company aims to capitalize on anticipated growth in the box office industry by improving theater experiences for guests. AMC Entertainment Holdings, Inc.’s (NYSE:AMC) strategic focus includes expanding its premium large format, extra-large format, and special purpose screens under its “Go Plan.”
9. iQIYI, Inc. (NASDAQ:IQ)
Share Price: $2.26
Number of Hedge Fund Holders: 20
iQIYI, Inc. (NASDAQ:IQ) provides online entertainment video services in China. The company produces, aggregates, and distributes a wide range of professionally produced content and other video content in a variety of formats. With its leading technology platform powered by AI and big data analytics, iQIYI, Inc. (NASDAQ:IQ) has built a massive user base. The company’s diversified business model includes memberships, online ads, content distribution, online gaming, and IP licensing. iQIYI, Inc. (NASDAQ:IQ) is one of the best stocks to buy under $3.
On February 19, CFRA analyst Siti Salikin raised the price target for iQIYI, Inc. (NASDAQ:IQ) to $2.50 from the previous $2.30 and maintained a “Hold” rating. Despite a decline in financial performance and earnings per ADR (EPADS) in 2024, CFRA maintains its 2025 EPADS forecast for the company at CNY 1.90 and has set a 2026 EPADS target at CNY 2.00. The firm expects iQIYI, Inc. (NASDAQ:IQ) to recover in 2025 with a 4% revenue growth driven by improved membership revenue, the introduction of new premium content aligned with user preferences, and a recovery in content slates. CFRA’s analysis points to an enhanced net margin for iQIYI, Inc. (NASDAQ:IQ) in 2025 supported by higher average revenue per membership and reduced content costs, potentially resulting from scale efficiency and the use of AI.
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