On October 16, Victoria Greene, Chief Investment Officer of G Squared Private Wealth Management, appeared on CNBC to state that small caps demonstrate lasting strength. Greene explained that investors are looking for something cheaper than mega-cap tech and that hasn’t moved up yet. He noted that the small caps are finally hitting new record highs after a couple of years and that many of them are more rate sensitive and a little bit more levered, which means that lower rates help them. While acknowledging that the market has been burned a couple of times with the small-cap breakout only to have them fall behind large-cap peers, he believes that the current breakout has sustained momentum and that small caps may be sticking around to stay, especially if the market sees another 50 basis points of cuts.
Greene also confirmed that he is very concerned about inflation and wants stability in tariffs and stability in pricing. He warned that as the market enters the holiday season, people may be very surprised by how much everything costs. He affirmed that inflation is a risk to margins and that his firm is watching profit margins extremely carefully to see how companies are protecting them and whether they are passing costs on to consumers.
That being said, we’re here with a list of the 10 best stocks under $3 to invest in.
Our Methodology
We sifted through the Finviz stock screener to compile a list of the best stocks with a share price under $3. We then selected the 10 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q2 2025. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 1000 elite money managers.
Note: All data was sourced on October 29.
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 Stocks Under $3 to Invest In
10. Wipro Limited (NYSE:WIT)
Share Price as of October 29: $2.67
Number of Hedge Fund Holders: 19
Wipro Limited (NYSE:WIT) is one of the best stocks under $3 to invest in. On October 29, Wipro Limited announced that it signed a multi-year strategic agreement with Hanesbrands Inc. (NYSE:HBI). This engagement transforms HanesBrands’ IT infrastructure and cybersecurity operations through an AI-first approach.
The agreement is a key component of HanesBrands’ strategic IT 2.0 transformation initiative, which is shifting the company toward a unified, AI-led managed services model. Wipro will use its Wipro Intelligence WINGS Operations AI platform, which is a part of the unified Wipro Intelligence suite of AI-powered platforms.
Wipro will further strengthen HanesBrands’ security posture by enabling AI-powered predictive and preventive operations and the automation of security workflows to reduce incident resolution times. The focus will also be on helping HanesBrands manage regulatory compliance and minimize business disruption through greater operational stability.
Wipro Limited (NYSE:WIT) operates as an IT, consulting, and business process services company worldwide that operates through IT Services and IT Products segments.
Hanesbrands Inc. (NYSE:HBI) designs, manufactures, sources, and sells a range of innerwear apparel for men, women, and children in the Americas, Europe, the Asia Pacific, and internationally.
9. Pulmonx Corporation (NASDAQ:LUNG)
Share Price as of October 29: $1.92
Number of Hedge Fund Holders: 20
Pulmonx Corporation (NASDAQ:LUNG) is one of the best stocks under $3 to invest in. On October 28, Lake Street lowered the firm’s price target on Pulmonx to $4 from $8 and kept a Buy rating on the shares.
The firm believes that Wall Street will view the return of former CEO Glen French and CFO Derrick Sung positively. The shares are attractive due to the vast clinical proof of concept of Zephyr valves, the strong market opportunity, and the new product pipeline.
On the same day, Stifel Nicolaus analyst Rick Wise maintained a Buy rating on Pulmonx and set a price target of $5.00. Additionally, John Young CFA from Canaccord Genuity maintained a Buy rating on Pulmonx, with a price target of $6.00.
Pulmonx Corporation (NASDAQ:LUNG) is a commercial-stage medical technology company that provides a minimally invasive treatment for patients with severe emphysema, a form of chronic obstructive pulmonary disease.
8. Bridger Aerospace Group Holdings Inc. (NASDAQ:BAER)
Share Price as of October 29: $1.64
Number of Hedge Fund Holders: 20
Bridger Aerospace Group Holdings Inc. (NASDAQ:BAER) is one of the best stocks under $3 to invest in. On October 29, Bridger Aerospace Group Holdings announced that it secured new financing commitments totaling up to $331.5 million through a new senior secured facility led by Bain Capital’s Private Credit Group.
The new $331.5 million Senior Secured Credit Facility is structured into three parts: a $21.5 million Revolving Credit Facility, a $210 million Senior Secured Term Loan, and a $100 million Fleet Expansion Facility. The series of transactions serves to refinance Bridger’s existing $160 million municipal bond with Gallatin County, consolidate the company’s other existing debt, and provide substantial financial flexibility.
Specifically, the financing includes a delayed draw facility designed to fund future fleet expansion. Bridger also recognized strategic partners, including Bain Capital, Crestline, Power Sustainable, and Foundation Credit.
Bridger Aerospace Group Holdings Inc. (NASDAQ:BAER) provides aerial wildfire surveillance, relief & suppression, and aerial firefighting services in the US.
7. Climb Bio Inc. (NASDAQ:CLYM)
Share Price as of October 29: $2.08
Number of Hedge Fund Holders: 20
Climb Bio Inc. (NASDAQ:CLYM) is one of the best stocks under $3 to invest in. On October 16, William Blair analyst Matt Phipps initiated coverage of Climb Bio with an Outperform rating but no price target. The positive rating is based on the potential of the company’s CD19 antibody, budoprutug, which is currently being developed for various autoimmune indications.
Earlier on October 13, H.C. Wainwright analyst Raghuram Selvaraju initiated coverage of Climb Bio with a Buy rating and $9 price target. H.C. Wainwright considers Climb Bio to be a disruptive innovator in the treatment of B-cell-mediated autoimmune diseases.
Selvaraju noted that valuations of comparable companies hint at considerable upside potential for Climb Bio’s shares.
Climb Bio Inc. (NASDAQ:CLYM) is a clinical-stage biotechnology company that develops therapies for immune-mediated diseases.
6. Cabaletta Bio Inc. (NASDAQ:CABA)
Share Price as of October 29: $2.50
Number of Hedge Fund Holders: 20
Cabaletta Bio Inc. (NASDAQ:CABA) is one of the best stocks under $3 to invest in. On October 27, Cabaletta Bio announced positive clinical data and development updates for its investigational targeted cell therapy, rese-cel (resecabtagene autoleucel, formerly known as CABA-201), across its RESET-Myositis, RESET-SSc, and RESET-SLE trials.
As of October 24, the overall RESET program had 76 patients enrolled across 77 clinical trial sites globally. Rese-cel is an autologous CAR T cell therapy engineered to transiently and deeply deplete CD19-positive cells using a single, weight-based infusion, aiming for durable, drug-free clinical responses.
Based on initial data from 3 patients in the RESET-PV trial, suggesting potentially complete B cell depletion is possible with rese-cel without the need for a fludarabine and cyclophosphamide lymphodepleting preconditioning regimen, Cabaletta is expanding this no preconditioning approach into the RESET-SLE trial. A new dose-escalation cohort will be incorporated into the lupus trial to provide a simpler, patient-focused alternative, especially for women of childbearing potential. Initial clinical data from this no preconditioning cohort are anticipated in 2026.
Cabaletta Bio Inc. (NASDAQ:CABA) is a clinical-stage biotechnology company that discovers and develops engineered T cell therapies for patients with autoimmune diseases.
5. Alector Inc. (NASDAQ:ALEC)
Share Price as of October 29: $1.55
Number of Hedge Fund Holders: 23
Alector Inc. (NASDAQ:ALEC) is one of the best stocks under $3 to invest in. On October 21, Alector announced the topline results from the Phase 3 INFRONT-3 clinical trial evaluating latozinemab (AL001) in individuals with frontotemporal dementia due to a progranulin gene mutation (FTD-GRN).
The 96-week, double-blind INFRONT-3 trial, developed in collaboration with GSK, did not meet the clinical co-primary endpoint of slowing FTD-GRN progression, as measured by the Clinical Dementia Rating plus National Alzheimer’s Coordinating Center Frontotemporal Lobar Degeneration Sum of Boxes (CDR plus NACC FTLD-SB).
In collaboration with GSK, nivisnebart (AL101/GSK4527226) is being evaluated in the PROGRESS-AD, a global, 76-week Phase 2 clinical trial for individuals with early Alzheimer’s disease/AD. Enrollment was completed in April 2025, with trial completion expected in 2026 and an independent interim analysis planned for H1 2026.
Alector Inc. (NASDAQ:ALEC) is a late-stage clinical biotechnology company that develops therapies that is focused on counteracting the devastating progression of neurodegenerative diseases.
4. Alight Inc. (NYSE:ALIT)
Share Price as of October 29: $2.87
Number of Hedge Fund Holders: 30
Alight Inc. (NYSE:ALIT) is one of the best stocks under $3 to invest in. On October 21, Kyle Peterson from Needham maintained a Buy rating on Alight, with a price target of $4.50.
Earlier on October 10, Citi lowered the firm’s price target on Alight to $8.50 from $11 and maintained a Buy rating on the shares. The firm noted that Alight’s backlog continues to grow, even though the acceleration of its growth has been delayed. Therefore, Citi reduced the stock’s valuation multiple. However, the firm highlights that Alight remains confident in its plan for margin expansion.
Furthermore, on October 8, D.A. Davidson analyst Dan Waggoner maintained a Buy rating on Alight today and set a price target of $7.00.
Alight Inc. (NYSE:ALIT) is a technology-enabled services company worldwide. The company provides Alight Worklife, which is an intuitive, cloud-based employee engagement platform.
3. Hudson Pacific Properties Inc. (NYSE:HPP)
Share Price as of October 29: $2.35
Number of Hedge Fund Holders: 34
Hudson Pacific Properties Inc. (NYSE:HPP) is one of the best stocks under $3 to invest in. On October 13, Jefferies lowered the firm’s price target on Hudson Pacific to $2.40 from $2.50 and kept a Hold rating on the shares. Following a transfer of coverage, the firm adjusted ratings and price targets within the REIT space. Jefferies identified AI as the key theme that will shape future office demand.
On the same day, Jefferies analyst Joe Dickstein maintained a Hold rating on Hudson Pacific Properties today and set a price target of $2.40.
Earlier on October 1, Cantor Fitzgerald also initiated coverage of Hudson Pacific with an Overweight rating and $3.50 price target. This sentiment was announced as part of the firm’s broader initiation of coverage of the US REITs, including 9 property sectors and 40 stocks. There isn’t a lot of enthusiasm for a REIT recovery in 2026, but Cantor Fitzgerald believes that the industry is well-positioned over the next 12 to 24 months.
Hudson Pacific Properties Inc. (NYSE:HPP) is a real estate investment trust, or REIT.
2. Clear Channel Outdoor Holdings Inc. (NYSE:CCO)
Share Price as of October 29: $1.94
Number of Hedge Fund Holders: 34
Clear Channel Outdoor Holdings Inc. (NYSE:CCO) is one of the best stocks under $3 to invest in. On October 29, Citi raised the price target on Clear Channel Outdoor to $2.10 from $1.35, while maintaining a Neutral rating on the shares.
Earlier on October 21, Barrington analyst Patrick Sholl maintained a neutral stance on CCO stock, giving a Hold rating.
Additionally, on October 20, TD Cowen analyst Lance Vitanza raised the firm’s price target on Clear Channel Outdoor to $2.80 from $2.50 with a Buy rating on the shares. The firm noted unsubstantiated reports suggesting that Abu Dhabi’s sovereign wealth fund is working toward a potential acquisition of Clear Channel. In TD Cowen’s opinion, these reports appear credible. Furthermore, the company is experiencing favorable operating momentum.
Clear Channel Outdoor Holdings Inc. (NYSE:CCO) operates as an out-of-home advertising company in the United States and Singapore. The company operates in two segments: America and Airports.
1. Sabre Corporation (NASDAQ:SABR)
Share Price as of October 29: $1.91
Number of Hedge Fund Holders: 35
Sabre Corporation (NASDAQ:SABR) is one of the best stocks under $3 to invest in. On October 29, Volaris, which is Mexico’s leading ultra-low-cost airline, and Sabre Corporation announced a new multi-year agreement that will make Volaris’s flight content available to users through SabreMosaic Travel Marketplace. The agreement marks a strategic expansion for Volaris, which is making its debut in the global distribution system/GDS channel.
The partnership strengthens SabreMosaic Travel Marketplace’s position as a leading source of low-cost carrier content for agencies worldwide. Chris Wilding, Senior Vice President of Airline Distribution at Sabre, stated that Volaris’s decision to join the platform brings one of the fastest-growing low-cost carriers in the Americas to a cloud-native platform that unites the broadest range of multi-source travel content.
Earlier, on October 14, Sabre Corporation announced the launch of SabreMosaic Continuous Revenue Optimizer/CRO. This industry-first, AI-driven modular solution is designed to help airlines move beyond traditional fare classes and provide continuous pricing recommendations for every shopping request.
Sabre Corporation (NASDAQ:SABR), together with its subsidiaries, operates as a software and technology company for the travel industry internationally. It has 2 segments: Travel Solutions and Hospitality Solutions.
While we acknowledge the potential of SABR 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 SABR and that has 100x upside potential, check out our report about this cheapest AI stock.
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