In this article, we will look at the 10 Hot Penny Stocks to Invest in Now.
CNBC reported that consumer prices rose 2.7% year-over-year in June, suggesting that President Trump’s tariffs are starting to be felt across the economy. While the numbers were largely in line with expectations, June’s reading was well above the Federal Reserve’s 2% target.
On July 17, Andy Constan, CEO of Damped Spring Advisors, appeared on CNBC’s ‘Fast Money’ to discuss the effects of the Federal Reserve setting policies based on President Trump’s will.
Constan stated that President Trump wants the rates to be much lower, which is why he wants the Fed to do something that they don’t consider good policy. According to him, Trump “wants the Fed to bend to his will,” which is to “cut short rates a lot.”
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He added that while he understands the math behind cutting 150 basis points, which would save the government $100 billion and reduce the deficit, doing so would make the Fed a non-independent entity.
Constan says that if this materializes, it would badly hurt the US dollar, as investors here and abroad would not expect the Fed to conduct policies even-handedly, expecting more debasement of the currency. He further stated:
“Inflation expectations would rise as a weak dollar and easy monetary policy would stimulate asset speculation and perhaps turbocharge real economic growth. That would cause the long end, treasury yields, and mortgages to rise, perhaps a lot, and that wouldn’t be what Trump wants.”
With these trends in view, let’s look at the top hot penny stocks to invest in now.
A view of a financial trading floor with multiple traders observing stock market performance.
Our Methodology
We used Finviz to compile a list of the best-performing penny stocks (stocks priced below $5) and selected the top 10 with the highest number of hedge fund holders as of Q1 2025. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of hedge fund sentiment.
Note: All data was recorded on July 18.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10 Hot Penny Stocks to Invest in Now
10. MEI Pharma, Inc. (NASDAQ:MEIP)
Stock Price: $4.50
Performance Last Month: 101.79%
Number of Hedge Fund Holders: 3
MEI Pharma, Inc. (NASDAQ:MEIP) is one of the hot penny stocks to invest in now. On July 18, MEI Pharma, Inc. (NASDAQ:MEIP) announced securities purchase agreements for a private investment in public equity (PIPE) for the sale and purchase of 29,239,767 shares of common stock at a price of $3.42 per share.
The expected aggregate gross proceeds for the transaction come up to approximately $100 million before the exclusion of placement agent fees and other estimated offering expenses.
MEI Pharma, Inc. (NASDAQ:MEIP) has plans to use all of the net proceeds for the launch of its treasury strategy focused on Litecoin. The transaction is thus a notable milestone for the company’s long-term strategic plan, establishing MEI Pharma, Inc. (NASDAQ:MEIP) as the first and only publicly traded company to adopt Litecoin as a treasury reserve asset.
Often referred to as “silver to Bitcoin’s gold,” Litecoin is a peer-to-peer cryptocurrency that Charlie Lee created in October 2011. The integration of Litecoin into its treasury operations has allowed MEI Pharma, Inc. (NASDAQ:MEIP) access to a decentralized monetary asset that complements its cash management framework.
MEI Pharma, Inc. (NASDAQ:MEIP) is a pharmaceutical company that develops pharmaceutical compounds. Its programs include Voruciclib and ME-344.
9. Offerpad Solutions Inc. (NYSE:OPAD)
Stock Price: $2.23
Performance Last Month: 127.11%
Number of Hedge Fund Holders: 3
Offerpad Solutions Inc. (NYSE:OPAD) is one of the hot penny stocks to invest in now. On May 6, Offerpad Solutions Inc. (NYSE:OPAD) announced a strategic partnership with Auction.com, a leading online marketplace, to transform the process of buying and selling homes.
The two companies have joined hands to align their capabilities and strengths to deliver improved value, care, and speed to buyers and sellers.
As part of the partnership, Offerpad Solutions Inc.’s (NYSE:OPAD) Renovate division would become the preferred partner of renovation services for buyers, ranging from institutions acquiring properties to local community developers.
This complements Offerpad Solutions Inc.’s (NYSE:OPAD) renovation experience with Auction.com’s marketplace scale, allowing buyers to transform their acquired properties more easily and quickly.
In addition, Auction.com’s SmartSale platform would also expand Offerpad Solutions Inc.’s (NYSE:OPAD) ability to offer competitive offers through increased buyer reach.
Offerpad Solutions Inc. (NYSE:OPAD) operates a real estate platform that enables customers to easily buy and sell properties using a mobile device.
8. Viomi Technology Co., Ltd (NASDAQ:VIOT)
Stock Price: $3.34
Performance Last Month: 142.03%
Number of Hedge Fund Holders: 3
Viomi Technology Co., Ltd (NASDAQ:VIOT) is one of the hot penny stocks to invest in now. On July 14, Viomi Technology Co., Ltd (NASDAQ:VIOT) announced that its Board of Directors approved a special dividend of $0.0293 per ordinary share ($0.0880 per American depositary share, or ADS). The aggregate amount of the special dividend is expected to be approximately $6 million.
The dividend will be paid on or around August 18, 2025, to the holders of Viomi Technology Co., Ltd.’s (NASDAQ:VIOT) ordinary shares, of record, as of the close of business on July 31.
The special dividend payment to holders of ADSs is subject to the terms of the deposit agreement. The dividend will be paid to holders of ADSs on or around August 21, of record, as of the close of business on July 31.
Based in China, Viomi Technology Co., Ltd (NASDAQ:VIOT) operates an IoT Home platform and sells IoT-fitted smart home products. These include its flagship line of water purification systems, smart kitchen products, and other offerings. The company also offers complementary consumable products such as water purifier filters, water quality meters, and water filter pitchers.
7. ProKidney Corp. (NASDAQ:PROK)
Stock Price: $3.52
Performance Last Month: 256.89%
Number of Hedge Fund Holders: 3
ProKidney Corp. (NASDAQ:PROK) is one of the hot penny stocks to invest in now. On July 15, JP Morgan analyst Anupam Rama maintained a neutral stance on ProKidney Corp. (NASDAQ:PROK), giving the stock a Hold rating without a price target.
The analyst based the rating on the company’s current developments. He acknowledged that ProKidney Corp.’s (NASDAQ:PROK) recent alignment with the FDA for an accelerated approval pathway for rilparencel is an optimistic development and highlights progress in its pivotal PROACT 1 study.
However, Rama also stated that the time for the attainment of necessary data for the accelerated approval is longer than previously expected, as key data is expected to roll out in Q2 2027.
The analyst thus reasoned that although there have been notable optimistic updates in the trial, the extended timeline may weigh on investor sentiment, warranting a cautious outlook on the stock.
ProKidney Corp. (NASDAQ:PROK) is a clinical-stage biotechnology company that develops a proprietary cell therapy platform. The company’s emphasis is on chronic kidney disease treatment, shifting focus to kidney function restoration to delay or stop the progression of CKD.
6. Above Food Ingredients Inc. (NASDAQ:ABVE)
Stock Price: $3.40
Performance Last Month: 130.51%
Number of Hedge Fund Holders: 7
Above Food Ingredients Inc. (NASDAQ:ABVE) is one of the hot penny stocks to invest in now. On July 7, Above Food Ingredients Inc. (NASDAQ:ABVE) announced a definitive merger agreement with Palm Global Technologies Ltd., with the combination of the two companies to be carried out through a statutory plan of arrangement in Above Food Ingredients Inc.’s (NASDAQ:ABVE) domestic jurisdiction.
The terms of the merger state that Above Food Ingredients Inc. (NASDAQ:ABVE) would acquire Palm Global Technologies Ltd., and the latter’s shareholders would attain a total of 1.1 billion shares in Above Food in exchange for their existing holdings.
The merger is expected to position Above Food Ingredients Inc. (NASDAQ:ABVE) as a market leader in the issuance of stablecoins and tokenization of real-world assets.
Above Food Ingredients Inc. (NASDAQ:ABVE) operates its subsidiaries, Above Food Corp. and Bite Acquisition Corp. Above Food provides food products and brands as an ingredient company, while Bite is a blank check company that affects stock exchange, stock purchase, asset acquisition, merger, reorganization, or similar business combination with one or more businesses.
5. Vor Biopharma Inc. (NASDAQ:VOR)
Stock Price: $2.38
Performance Last Month: 973.52%
Number of Hedge Fund Holders: 7
Vor Biopharma Inc. (NASDAQ:VOR) is one of the hot penny stocks to invest in now. In a report released on June 30, Swayampakula Ramakanth from H.C. Wainwright upgraded Vor Biopharma Inc. (NASDAQ:VOR) to a Buy with a price target of $3.00. The analyst based the optimistic outlook on the company’s growth potential and strategic advancements.
Vor Biopharma Inc. (NASDAQ:VOR) recently announced an exclusive license agreement with RemeGen Co. for the development and commercialization of telitacicept in regions outside of Greater China.
Telitacicept is a promising recombinant fusion protein and has already exhibited clinical success, attaining marketing approvals in China for a number of conditions, including generalized myasthenia gravis, systemic lupus nephritis, and rheumatoid arthritis.
The analyst further reasoned that the financial structure of the agreement lends Vor Biopharma Inc. (NASDAQ:VOR) financial strength because it includes upfront payments and potential milestone payments.
Vor Biopharma Inc. (NASDAQ:VOR) is a clinical-stage cell therapy company that develops cell therapies for the treatment of cancer. It combines therapies with a novel patient engineering approach to provide a single company solution for hematological malignancies.
4. Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX)
Stock Price: $1.35
Performance Last Month: 101.49%
Number of Hedge Fund Holders: 10
Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) is one of the hot penny stocks to invest in now. H.C. Wainwright analyst Joseph Pantginis maintained a Buy rating on Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) on June 24, keeping the associated price target at $4.00.
The analyst reasoned that Lexicon Pharmaceuticals, Inc.’s (NASDAQ:LXRX) sotagliflozin has a promising clinical profile for Type 1 Diabetes (T1D) patients and has exhibited a notable drop in hypoglycemic events. Since this is a significant concern in T1D management, it brings a positive light to the company’s operations.
Pantginis further stated that Phase 3 inTandem1 and inTandem2 clinical trial results showed a significant reduction in hypoglycemia rates compared to a placebo when sotagliflozin was used alongside optimized insulin therapy. This effect was the same across different subgroups defined by kidney function, showing sotagliflozin’s broad applicability.
Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) discovers, develops, and commercializes pharmaceutical products. The company’s drug candidates include Sotagliflozin for treating heart failure and type 1 diabetes, and LX9211 as a treatment for neuropathic pain.
3. Prime Medicine Inc. (NASDAQ:PRME)
Stock Price: $3.90
Performance Last Month: 160%
Number of Hedge Fund Holders: 15
Prime Medicine Inc. (NASDAQ:PRME) is one of the hot penny stocks to invest in now. On July 16, BMO Capital analyst Kostas Biliouris maintained a Buy rating on Prime Medicine Inc. (NASDAQ:PRME) and set a price target of $10.00. The analyst based the rating on the company’s innovative gene editing technology.
Prime Medicine Inc. (NASDAQ:PRME) recently secured additional funding totaling $39 million from the Cystic Fibrosis Foundation, which, according to the analyst, highlights the potential of its prime editing platform and preclinical data in cystic fibrosis.
Biliouris reasoned that the company’s notable 90% editing efficiency attained in the second patient treated ex vivo, when coupled with this financial backlog, reduces the risk of Prime Medicine Inc.’s (NASDAQ:PRME) platform and increases its credibility.
Headquartered in Cambridge, MA, Prime Medicine Inc. (NASDAQ:PRME) is a biotechnology company that develops one-time curative genetic therapies.
2. Neumora Therapeutics, Inc. (NASDAQ:NMRA)
Stock Price: $1.71
Performance Last Month: 98.01%
Number of Hedge Fund Holders: 18
Neumora Therapeutics, Inc. (NASDAQ:NMRA) is one of the hot penny stocks to invest in now. On July 16, Mizuho analyst Graig Suvannavejh raised the firm’s price target on Neumora Therapeutics, Inc. (NASDAQ:NMRA) to $5 from $4, maintaining an Outperform rating on the shares.
The rating update came after the introduction of NMRA-861 on July 9, when Neumora Therapeutics, Inc. (NASDAQ:NMRA) announced the initiation of a Phase 1 single-ascending dose/multiple-ascending dose (SAD/MAD) study of NMRA-861 in healthy adult participants with stable schizophrenia.
NMRA-861 is a highly potent and selective positive allosteric modulator (PAM) that Neumora Therapeutics, Inc. (NASDAQ:NMRA) is developing for the treatment of schizophrenia and other neuropsychiatric disorders.
Mizuho estimates a US launch in 2034, with risk-unadjusted NMRA-861 sales reaching $1.2 billion in 2037. It also sees a favorable risk/reward at current share levels, supporting the optimistic outlook on Neumora Therapeutics, Inc. (NASDAQ:NMRA).
Neumora Therapeutics, Inc. (NASDAQ:NMRA) is a clinical-stage biotechnology company that integrates neuroscience and data science to offer a precision medicine approach for brain diseases. Its focus is on advancing medicines for therapeutically relevant targets implicated in CNS diseases.
1. Opendoor Technologies Inc. (NASDAQ:OPEN)
Stock Price: $1.65
Performance Last Month: 196.60%
Number of Hedge Fund Holders: 21
Opendoor Technologies Inc. (NASDAQ:OPEN) is one of the hot penny stocks to invest in now. In a report released on July 18, Ryan Tomasello from KBW maintained a Hold rating on Opendoor Technologies Inc. (NASDAQ:OPEN) with a price target of $1.00.
Opendoor Technologies Inc. (NASDAQ:OPEN) reported $1.2 billion in revenue in fiscal Q1 2025, down 2% compared to the same quarter last year. It sold 2,946 total homes in the quarter, a 4% drop from fiscal Q1 2024.
However, the company also reported $2.4 billion in inventory balance, representing 7,080 homes and up 26% compared to fiscal Q1 2024. Net loss for the quarter reached $85 million versus $109 million in the same quarter last year.
Opendoor Technologies Inc. (NASDAQ:OPEN) operates in the buying, selling, and trading of residential properties online.
While we acknowledge the potential of OPEN 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 OPEN and that has 100x upside potential, check out our report about this cheapest AI stock.
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