On January 28, SlateStone Wealth chief market strategist Kenny Polcari discussed small-cap stock performance on FOX Business Network’s ‘Making Money.’ Small-cap and equal-weight stocks have been performing exceptionally well throughout the year. However, a sense of anxiety resurfaced among investors.
Polcari noted that when this occurs, investors typically retreat to the perceived safety of large-cap stocks, focusing on growth, core, momentum, and quality names. While the conservative segment of the market looks toward quality names, most seek refuge in growth and momentum.
Talking about the market turnaround, Polcari explained that the shift toward large-cap stocks makes sense because people seek the security of industry leaders when they feel anxious. Despite this, he emphasized that small caps have significantly outperformed this year.
While they have recently dipped from their peaks, they continue to outperform expectations. Polcari advised investors that they must be prepared to ride the wave of volatility associated with these names, as he expects their outperformance to continue.
Against this backdrop of shifting risk appetite, we’re here with a list of the 10 best up and coming penny stocks to buy.
Our Methodology
We used screeners to identify stocks that have gone public in the last 5 years and are trading below $5 per share, and then 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 February 24.
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 Up and Coming Penny Stocks to Buy
10. 60 Degrees Pharmaceuticals Inc. (NASDAQ:SXTP)
60 Degrees Pharmaceuticals Inc. (NASDAQ:SXTP) is one of the best up and coming penny stocks to buy. On February 2, 60 Degrees Pharmaceuticals announced a partnership with GoodRx to enhance the affordability and accessibility of ARAKODA (tafenoquine), the only FDA-approved, once-weekly prescription medication for malaria prevention in the US. The collaboration allows eligible patients to save up to 30% on the treatment at over 70,000 pharmacies nationwide.
This initiative is a key part of the company’s strategy to lower out-of-pocket costs for international travelers heading to malaria-endemic regions. ARAKODA was originally developed by the Walter Reed Army Institute of Research and features a long terminal half-life of approximately 16 days, which supports its convenient weekly dosing schedule.
The treatment regimen involves a three-day loading phase before travel, followed by weekly doses during the stay and a final dose upon return. Beyond its primary use for travelers, the drug represents a significant advancement in the prevention of malaria, a life-threatening disease transmitted by the Anopheles mosquito. Despite its benefits, the company emphasizes strict safety protocols, requiring G6PD deficiency testing for all patients before prescription to avoid the risk of hemolytic anemia.
60 Degrees Pharmaceuticals Inc. (NASDAQ:SXTP) is a specialty pharmaceutical company that develops and commercializes therapies for the prevention and treatment of infectious diseases in the US. It offers ARAKODA for malaria preventative treatment.
9. Atlantic International Corp. (NASDAQ:ATLN)
Atlantic International Corp. (NASDAQ:ATLN) is one of the best up and coming penny stocks to buy. On February 2, Atlantic International appointed Kevin J. Murphy, CPA, as its new Chief Financial Officer. This leadership change coincides with a major period of expansion for the company, following its acquisition of Circle8 Group, which is a prominent European IT and technology staffing firm.
The merger has transformed Atlantic International into a global workforce solutions platform with ~$1.2 billion in unaudited annual revenue, expanding its operations significantly across North America and into key European markets. Murphy joins the company with over 25 years of senior financial leadership experience across the staffing, technology, and data services industries. Most recently, he served as Executive Vice President and Division CFO of Hospitality Staffing Solutions, where he also functioned in a CEO capacity and delivered 17% revenue growth over two years.
In his new role, Murphy will focus on scaling the Atlantic platform and integrating the high-growth technology capabilities added through the Circle8 acquisition. The CEO of Atlantic International Corp. (NASDAQ:ATLN) highlighted Murphy’s operational mindset and capital markets discipline as essential assets for the company’s next chapter of growth.
Atlantic International Corp. (NASDAQ:ATLN) operates as a staffing company servicing the commercial, professional, finance, direct placement, and managed service provider verticals.
8. Aether Holdings Inc. (NASDAQ:ATHR)
Aether Holdings Inc. (NASDAQ:ATHR) is one of the best up and coming penny stocks to buy. On February 5, Aether Holdings announced the acquisition of PublicView.ai, which is an AI-driven market intelligence platform designed to streamline equity research. The platform specializes in converting complex SEC filings, such as 10-Ks and 10-Qs, into organized, actionable insights through natural-language processing and automated summarization.
This acquisition is intended to strengthen Aether’s fintech ecosystem by integrating fundamental research capabilities with the existing technical and sentiment tools offered through its subsidiary, Aether Grid. The CEO of Aether Holdings Inc. (NASDAQ:ATHR) noted that PublicView.ai will enhance Aether Grid by providing real-time analysis of earnings calls, press releases, and news articles. The platform’s ability to export data into formats like Excel and JSON, perform quantitative analysis, and generate visualizations is expected to help both retail and professional investors identify market trends more efficiently.
The acquisition aligns with Aether’s broader strategy to build a modern, intuitive market intelligence platform that improves investor engagement and long-term shareholder value. PublicView.ai’s core functionality centers on reducing the friction of manual document review for financial analysts and data-driven investment teams.
Aether Holdings Inc. (NASDAQ:ATHR) develops and operates a financial technology platform in the US. The company operates SentimenTrader.com, which is a cloud-based software platform that provides proprietary research analytics, data, and tools.
7. Regentis Biomaterials Ltd. (NYSEAMERICAN:RGNT)
Regentis Biomaterials Ltd. (NYSEAMERICAN:RGNT) is one of the best up and coming penny stocks to buy. On February 4, Regentis Biomaterials appointed Ori Gon as Chief Financial Officer and Chief Business Officer to lead the company’s financial strategy and commercial development. Gon joined the regenerative medicine firm as its lead product, GelrinC, nears commercial launch in Europe and progresses through a pivotal Phase III FDA trial in the US.
With over 15 years of experience in medtech and capital markets, including senior roles at Tactile Mobility and ReWalk Robotics, Gon is expected to play a key role in establishing strategic partnerships and securing sustainable revenue growth. Executive Chairman Dr. Ehud Geller emphasized that Gon’s appointment strengthens the leadership team during the company’s transition from a development-stage entity to a commercial enterprise.
The company’s flagship product, GelrinC, is a cell-free, off-the-shelf hydrogel implant designed for the repair of focal knee cartilage defects. It has already received CE Mark approval in Europe and is currently at the midpoint of its US clinical trial enrollment. The treatment is marketed as a cost-effective, 10-minute procedure that allows for faster recovery and provides sustained pain relief for patients.
Regentis Biomaterials Ltd. (NYSEAMERICAN:RGNT) is a regenerative medicine company that develops tissue repair solutions in the US.
6. SEALSQ Corp. (NASDAQ:LAES)
SEALSQ Corp. (NASDAQ:LAES) is one of the best up and coming penny stocks to buy. On February 18, SEALSQ and Lattice Semiconductor announced a collaboration to integrate Trusted Platform Module/TPM-based post-quantum security into select Lattice FPGA solutions. This partnership aims to provide quantum-resistant hardware for mission-critical edge computing and high-stakes environments.
The collaboration centers on a Proof-of-Concept/PoC that combines SEALSQ’s QS7001 and QVault TPM secure Root-of-Trust/RoT with Lattice’s power-efficient FPGA platforms. This unified architecture demonstrates the feasibility of embedding post-quantum cryptography/PQC directly into programmable hardware, serving as a reference design for next-generation secure systems.
By using SEALSQ’s expertise in tailored PQC protection, Lattice aims to expand its portfolio of solutions that meet the rigorous standards recommended by organizations like NIST. According to the General Manager of SEALSQ Corp. (NASDAQ:LAES), this move allows the company to extend its leadership in the post-quantum market beyond direct OEM sales. For Lattice, the partnership reinforces its commitment to security as the industry transitions toward quantum-capable architectures.
SEALSQ Corp. (NASDAQ:LAES), together with its subsidiaries, designs, develops, and markets semiconductors in North America, Europe, the Middle East, Africa, the Asia Pacific, and Latin America.
5. Gogoro Inc. (NASDAQ:GGR)
Gogoro Inc. (NASDAQ:GGR) is one of the best up and coming penny stocks to buy. On February 12, Gogoro achieved a landmark financial performance in 2025, reporting a record-high full-year adjusted EBITDA of $59.9 million, a significant increase from $44.7 million in the previous year. The company’s focus on execution and cost discipline led to operating cash flow tripling to $31.1 million, while gross margins rose from 2.6% to 8.3%.
Despite these gains, total revenue fell by 9.4% as the broader Taiwan scooter market hit its lowest level in a decade. This decline was particularly evident in hardware revenue, which dropped by 23.3% due to decreased vehicle sales and delays in new product launches. In response to these market headwinds, management is implementing a strategic shift to stabilize the scooter business and steer the Gogoro Network toward profitability by 2026.
The company is moving away from growth at any cost and instead prioritizing high-potential markets, disciplined pricing, and high-value segments like the B2B and government fleet sectors. The company is preparing for a pilot in Vietnam in partnership with Castrol, timing the move to capitalize on Hanoi’s upcoming 2026 ban on fossil-fuel motorbikes with a new, localized scooter model. Additionally, Gogoro Inc. (NASDAQ:GGR) plans to pilot a new modular battery swapping station by late 2026.
Gogoro Inc. (NASDAQ:GGR), together with its subsidiaries, researches, develops, manufactures, sells, and distributes electric scooters and bikes, and electric scooter enabling components in Taiwan, India, and internationally.
4. Airship AI Holdings Inc. (NASDAQ:AISP)
Airship AI Holdings Inc. (NASDAQ:AISP) is one of the best up and coming penny stocks to buy. On February 17, Airship AI reported Q4 2025 net revenues of $6.5 million, which was a 102% increase over the same period last year. The company achieved a gross profit of $3.3 million with a margin of 51.2%, driven by strong sales of branded hardware and software.
While investments in sales and marketing led to an operating loss of $612,000, the company reported a substantial net income for the year of $29.3 million. Operational highlights included a validated pipeline of ~$173 million and a backlog of $3.3 million as of year-end. Notable new contracts included a $1.9 million award from the Department of Homeland Security for national security events and a $2.8 million award from a large commercial customer.
For 2026, Airship AI Holdings Inc. (NASDAQ:AISP) aims to capitalize on funding from the One Big Beautiful Bill Act/OBBB to support long-term business development. Strategic goals include further refining the Outpost AI and Fortress analytic platforms, expanding into mobile autonomous robotic platforms, and increasing brand awareness across new vertical markets through targeted marketing and industry events.
Airship AI Holdings Inc. (NASDAQ:AISP) provides AI-driven data management platforms in the US. The company offers Outpost AI, Acropolis, and Airship Command.
3. Aeries Technology Inc. (NASDAQ:AERT)
Aeries Technology Inc. (NASDAQ:AERT) is one of the best up and coming penny stocks to buy. On February 9, Aeries Technology reported its FQ3 2026 earnings results, highlighting a turnaround in profitability despite flat year-over-year revenue of $17.5 million. The company achieved an Adjusted EBITDA of $2.5 million, an improvement from the $2 million loss recorded in the same period last year.
The company’s CEO attributed the results to disciplined cost management, scaled Global Capability Center/GCC operations, and the increasing adoption of AI and automation across their client base. The company’s delivery teams in India and Mexico have maintained high utilization and stability, earning a third ‘Great Place to Work’ certification. The CEO noted that several recently signed multi-year contracts are currently in their ramp-up phase, which is expected to provide more meaningful contributions to the company’s financial health as they move toward a steady state in the coming year.
Looking forward, Aeries Technology Inc. (NASDAQ:AERT) provided strong guidance for FY2027, projecting revenue between $80 and $84 million and Adjusted EBITDA between $10 and $12 million. The CFO emphasized that this outlook is anchored by already signed multi-year contracts and maturing AI implementations. Additionally, the company raised its FY2026 Adjusted EBITDA guidance to a range of $7 to $8 million.
Aeries Technology Inc. (NASDAQ:AERT) provides professional and technology consulting services in North America, the Asia Pacific, and internationally.
2. Adagio Medical Holdings Inc. (NASDAQ:ADGM)
Adagio Medical Holdings Inc. (NASDAQ:ADGM) is one of the best up and coming penny stocks to buy. On February 4, Adagio Medical Holdings announced the publication of results from its US Early Feasibility Study/EFS evaluating ultralow temperature cardiac ablation/ULTC for treating scar-related ventricular tachycardia.
The multicenter study involved 20 patients with ischemic and non-ischemic cardiomyopathy across four US centers. The research focused on the acute safety and performance of ULTC in individuals with drug-refractory conditions, marking the first published US clinical experience for this technology under the FDA’s EFS framework. The study showed a favorable safety profile with no major adverse events recorded at 7 or 30 days, alongside strong clinical performance.
Among tested patients, 92.9% achieved non-inducibility of the targeted clinical arrhythmia after ablation. At a 24-week follow-up, 72% of patients successfully reduced or discontinued antiarrhythmic medications, and 83.3% remained free from implantable cardioverter-defibrillator shocks. Investigators noted that the technology’s ability to create deep, titratable lesions is particularly effective for treating deep intramural substrates found in challenging patient populations.
Adagio Medical Holdings Inc. (NASDAQ:ADGM) is a developmental-stage medical device company that develops and commercializes ablation technologies for the treatment of cardiac arrhythmias.
1. Acurx Pharmaceuticals Inc. (NASDAQ:ACXP)
Acurx Pharmaceuticals Inc. (NASDAQ:ACXP) is one of the best up and coming penny stocks to buy. On February 2, Acurx Pharmaceuticals announced that the United States Patent and Trademark Office granted a new patent, US 12,534,470, covering its DNA Polymerase IIIC inhibitors. This patent includes compositions-of-matter, methods of use, and pharmaceutical compositions, reinforcing the company’s intellectual property for its ACX-375C program.
To date, Acurx Pharmaceuticals Inc. (NASDAQ:ACXP) has secured four US patents alongside international grants in Israel, Japan, India, and Australia, with further country-level applications currently under review. Executive Chairman Robert J. DeLuccia stated that this patent extends protection for the company’s AI-supported drug discovery platform, which aims to transform the treatment of life-threatening infections.
Recent preclinical data suggests that microbiome selectivity may be a class effect of these novel compounds when compared to antibiotics like linezolid. While the lead inhibitor, ibezapolstat, is Phase 3-ready for treating C. difficile, these newer preclinical compounds show potential for systemic absorption via oral and parenteral administration. The company’s pipeline targets various serious conditions, including MRSA, community-acquired bacterial pneumonia, bacteremia, and inhalational anthrax. Acurx focuses on developing a new class of small-molecule antibiotics that inhibit the Gram-positive-specific enzyme DNA polymerase IIIC to cause bacterial cell death.
Acurx Pharmaceuticals Inc. (NASDAQ:ACXP) is a clinical-stage biopharmaceutical company that develops antibiotics to treat bacterial infections in the US. The company’s lead antibiotic candidate is ibezapolstat, which targets the polymerase IIIC enzyme.
While we acknowledge the potential of ACXP 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 ACXP and that has 100x upside potential, check out our report about this cheapest AI stock.
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