In this article, we will discuss the best technology penny stocks to invest in according to hedge funds.
On April 10, Dan Ives, Senior Equity Research Analyst at Wedbush Securities, joined BNN Bloomberg to discuss that the recent sell-off in big tech and software stocks has gone too far. He noted that while the market has been volatile due to concerns regarding Iran, signs of a ceasefire suggest that this black swan situation is now contained, likely leading to a risk-on market in the coming weeks. Ives emphasized that the industry is only in the third year of an eight-to-ten-year AI revolution and predicts that tech stocks will reach new all-time highs by the summer.
Ives also explained that while the trade has broadened beyond the Mag 7 to include his Ives AI 30 derivatives (covering software, cybersecurity, and infrastructure), the Mag 7 itself is massively oversold. He predicts these core tech stocks could rise about 30% over the next year. Looking at the broader software sector, Ives highlighted 2026 as the year of use case monetization. He noted that while there has been frustration over heavy CapEx from companies like Meta, Microsoft, and Salesforce without immediate returns, this is starting to change. He expects to see evidence of this monetization in Q1 earnings. He argued that software remains the most oversold subsector because many dismiss these companies’ ability to integrate new tools. He contended that AI-native firms like Anthropic will still need partnerships with established software companies because the ultimate winners will be those with the data, the data stack, and the existing install base.
Our Methodology
We used screeners to identify tech 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 April 28.
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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
10 Best Technology Penny Stocks to Invest In According to Hedge Funds
10. 8×8 Inc. (NASDAQ:EGHT)
Number of Hedge Fund Holders: 19
8×8 Inc. (NASDAQ:EGHT) is one of the best technology penny stocks to invest in according to hedge funds. On April 21, 8×8 and Synthflow AI announced a partnership to integrate advanced agentic AI into the 8×8 Contact Center platform. This collaboration aims to modernize enterprise customer service by automating self-service interactions across voice, chat, and digital channels. By using Synthflow’s infrastructure, which has already processed over 65 million voice interactions, 8×8 customers can now deploy human-like AI answering assistants that handle complex conversations without requiring developer support.
The partnership focuses on addressing the growing $54 billion voice AI market by replacing cumbersome legacy systems with agile, low-latency technology. Synthflow’s agents are designed with advanced interruption handling, memory capabilities, and support for more than 30 languages. These features are intended to help businesses increase their containment rates (the percentage of inquiries resolved without a human agent), reducing operational costs while improving customer satisfaction/CSAT scores.
Strategically, the agreement extends beyond technical integration to include commercial expansion. The long-term roadmap enables 8×8 Inc. (NASDAQ:EGHT) and its channel partners to resell Synthflow directly, and the platform will be made available to small and medium-sized businesses through the 8×8 App Store. This move positions both companies to offer a more scalable, no-code alternative to traditional contact center solutions.
8×8 Inc. (NASDAQ:EGHT) provides an integrated AI-driven platform combining contact center, unified communications, and CPaaS solutions. The company helps global organizations enhance customer experience and team collaboration through personalized journeys and operational insights.
9. Repay Holdings Corporation (NASDAQ:RPAY)
Number of Hedge Fund Holders: 20
Repay Holdings Corporation (NASDAQ:RPAY) is one of the best technology penny stocks to invest in according to hedge funds. On April 17, Repay Holdings confirmed receiving an unsolicited, non-binding proposal from Forager Capital Management LLC to acquire all outstanding shares of the company. The offer is priced at $4.80 per share in cash. Forager Capital is currently a stockholder in the Atlanta-based payment processing firm.
The Board of Directors at Repay Holdings has stated that it will review the proposal in consultation with its financial and legal advisors to determine the best course of action for the company and its stockholders. At this time, the company has advised that no action is required from stockholders as the evaluation process begins.
To assist in the review, Repay Holdings Corporation (NASDAQ:RPAY) has engaged JPMorgan Securities LLC as its financial advisor. Legal counsel is being provided by Troutman Pepper Locke LLP and Sullivan & Cromwell LLP. Repay Holdings is a major player in the integrated payment processing space, specializing in digital payment solutions across various software-vertical markets.
Repay Holdings Corporation (NASDAQ:RPAY) is a payment technology company offering integrated solutions that enable businesses to accept and send electronic payments, serving sectors such as personal loans, auto finance, and B2B through its Consumer and Business Payments segments.
