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11 Best Penny Stocks with the Highest Upside Potential

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In this article, we will look at the 11 Best Penny Stocks with the Highest Upside Potential.

On September 19, Morningstar released its research report on small-cap stocks as the sector started to rally. The small-cap stocks had largely underperformed the market for over a decade. However, the sector finally started to outperform the broader market in August, driven by technology and growth companies, particularly in the semiconductor industry.

The report highlighted that the small-cap rally differs from the overall market’s rise. For instance, in terms of the small caps, the industrial and financial sectors also played a big role in gains. The boost for small companies has come from two main factors, including the falling bond yields and expectations that the Federal Reserve will cut interest rates soon. Still, the strong US economy may pose challenges for small caps in the coming months.

Over the past decade, small caps have outperformed the market only twice. The first instance was in 2022 when the small caps dropped 18.5%, slightly outperforming the broader market’s 19.4% decline. Moreover, the last time small caps had a strong positive year beating the market was in 2016, rising 20.3% versus a 12.4% gain in the overall market.

The report looks at recent returns and notes that the small-cap segment is up 8% in the third quarter of 2025. This is slightly better than the 7.8% return for large-cap stocks and 3.9% for mid-caps. The technology sector has been the top contributor to small-cap gains this quarter, adding 2.2 percentage points to the small-cap index.

With that, let’s take a look at the 11 best penny stocks with the highest upside potential.

Stocks

Our Methodology

To curate the list of 11 best penny stocks with the highest upside potential, we used the Finviz Stock Screener, CNN, and Insider Monkey’s Q2 2025 database as our sources. Using the screener, we aggregated a list of penny stocks (trading below $5) for which analysts expect more than 25% upside. Next, we checked the upside potential from CNN and ranked the stocks in ascending order of this metric. We have also added the hedge fund sentiment around each stock. Please note that the data was recorded on September 26, 2025

​​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).

11 Best Penny Stocks with the Highest Upside Potential

11. Tuya Inc. (NYSE:TUYA)

Price: $2.52

Number of Hedge Fund Holders: 11

Analyst Upside Potential: 26.98%

Tuya Inc. (NYSE:TUYA) is one of the Best Penny Stocks to Buy with the Highest Upside Potential. Tuya Inc. (NYSE:TUYA) reported results for its fiscal second quarter of 2025 on August 26. The company reported growing its revenue by 9.35% year-over-year to reach $80.13 million. This topped Wall Street estimates by $1.69 million. Moreover, the EPS of $0.03 stayed in line with the expectations as well.

Management noted that the company was able to pull off these results amidst global trade uncertainties and supply chain challenges. The company achieved a 15% year-over-year revenue growth in H1 2025, with non-GAAP operating profit soaring about 127%. The fiscal second quarter revenue was driven by all the segments contributing to growth, with the PaaS segment being the largest contributor.

After the release, on August 27, Matt Ma from Jefferies raised the price target on Tuya Inc. (NYSE:TUYA) from $3.49 to $3.6, while reiterating a Buy rating on the stock. Overall, analyst’s 12-month price target represents a 26.98% upside from the current level.

Tuya Inc. (NYSE:TUYA) provides an AI cloud platform that integrates artificial intelligence with smart devices and commercial applications.

10. Clarivate Plc (NYSE:CLVT)

Price: $3.66

Number of Hedge Fund Holders: 33

Analyst Upside Potential: 36.61%

Clarivate Plc (NYSE:CLVT) is one of the Best Penny Stocks to Buy with the Highest Upside Potential. On September 11, Clarivate Plc (NYSE:CLVT) shared important business updates at the Goldman Sachs Communicopia + Technology Conference.

Management noted that they are focused on growing subscription revenue and are targeting AI across its products. The company aims for 90% of its revenue to come from subscriptions, which currently stands at 88%. Moreover, it is moving away from transactional sales, especially in Analytics & Guidance and Life Sciences, targeting a full transition by 2026. Management highlighted that the new digital products, like ProQuest e-books, support this shift.

Financially, Clarivate Plc (NYSE:CLVT)’s EBITDA margins are expected to shrink to 41% this year due to asset disposals. The company plans to complete a review of non-core assets by February 2026 to streamline its portfolio. Moreover, it also aims to reduce gross leverage from 4.3 times to below three.

Clarivate Plc (NYSE:CLVT) provides data, insights, analytics, and workflow solutions across Academia & Government, Intellectual Property, and Life Sciences & Healthcare.

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AI, Tariffs, Nuclear Power: One Undervalued Stock Connects ALL the Dots (Before It Explodes!)

Artificial intelligence is the greatest investment opportunity of our lifetime. The time to invest in groundbreaking AI is now, and this stock is a steal!

AI is eating the world—and the machines behind it are ravenous.

Each ChatGPT query, each model update, each robotic breakthrough consumes massive amounts of energy. In fact, AI is already pushing global power grids to the brink.

Wall Street is pouring hundreds of billions into artificial intelligence—training smarter chatbots, automating industries, and building the digital future. But there’s one urgent question few are asking:

Where will all of that energy come from?

AI is the most electricity-hungry technology ever invented. Each data center powering large language models like ChatGPT consumes as much energy as a small city. And it’s about to get worse.

Even Sam Altman, the founder of OpenAI, issued a stark warning:

“The future of AI depends on an energy breakthrough.”

Elon Musk was even more blunt:

“AI will run out of electricity by next year.”

As the world chases faster, smarter machines, a hidden crisis is emerging behind the scenes. Power grids are strained. Electricity prices are rising. Utilities are scrambling to expand capacity.

And that’s where the real opportunity lies…

One little-known company—almost entirely overlooked by most AI investors—could be the ultimate backdoor play. It’s not a chipmaker. It’s not a cloud platform. But it might be the most important AI stock in the US owns critical energy infrastructure assets positioned to feed the coming AI energy spike.

As demand from AI data centers explodes, this company is gearing up to profit from the most valuable commodity in the digital age: electricity.

The “Toll Booth” Operator of the AI Energy Boom

  • It owns critical nuclear energy infrastructure assets, positioning it at the heart of America’s next-generation power strategy.
  • It’s one of the only global companies capable of executing large-scale, complex EPC (engineering, procurement, and construction) projects across oil, gas, renewable fuels, and industrial infrastructure.
  • It plays a pivotal role in U.S. LNG exportation—a sector about to explode under President Trump’s renewed “America First” energy doctrine.

Trump has made it clear: Europe and U.S. allies must buy American LNG.

And our company sits in the toll booth—collecting fees on every drop exported.

But that’s not all…

As Trump’s proposed tariffs push American manufacturers to bring their operations back home, this company will be first in line to rebuild, retrofit, and reengineer those facilities.

AI. Energy. Tariffs. Onshoring. This One Company Ties It All Together.

While the world is distracted by flashy AI tickers, a few smart investors are quietly scooping up shares of the one company powering it all from behind the scenes.

AI needs energy. Energy needs infrastructure.

And infrastructure needs a builder with experience, scale, and execution.

This company has its finger in every pie—and Wall Street is just starting to notice.

Wall Street is noticing this company also because it is quietly riding all of these tailwinds—without the sky-high valuation.

While most energy and utility firms are buried under mountains of debt and coughing up hefty interest payments just to appease bondholders…

This company is completely debt-free.

In fact, it’s sitting on a war chest of cash—equal to nearly one-third of its entire market cap.

It also owns a huge equity stake in another red-hot AI play, giving investors indirect exposure to multiple AI growth engines without paying a premium.

And here’s what the smart money has started whispering…

The Hedge Fund Secret That’s Starting to Leak Out

This stock is so off-the-radar, so absurdly undervalued, that some of the most secretive hedge fund managers in the world have begun pitching it at closed-door investment summits.

They’re sharing it quietly, away from the cameras, to rooms full of ultra-wealthy clients.

Why? Because excluding cash and investments, this company is trading at less than 7 times earnings.

And that’s for a business tied to:

  • The AI infrastructure supercycle
  • The onshoring boom driven by Trump-era tariffs
  • A surge in U.S. LNG exports
  • And a unique footprint in nuclear energy—the future of clean, reliable power

You simply won’t find another AI and energy stock this cheap… with this much upside.

This isn’t a hype stock. It’s not riding on hope.

It’s delivering real cash flows, owns critical infrastructure, and holds stakes in other major growth stories.

This is your chance to get in before the rockets take off!

Disruption is the New Name of the Game: Let’s face it, complacency breeds stagnation.

AI is the ultimate disruptor, and it’s shaking the foundations of traditional industries.

The companies that embrace AI will thrive, while the dinosaurs clinging to outdated methods will be left in the dust.

As an investor, you want to be on the side of the winners, and AI is the winning ticket.

The Talent Pool is Overflowing: The world’s brightest minds are flocking to AI.

From computer scientists to mathematicians, the next generation of innovators is pouring its energy into this field.

This influx of talent guarantees a constant stream of groundbreaking ideas and rapid advancements.

By investing in AI, you’re essentially backing the future.

The future is powered by artificial intelligence, and the time to invest is NOW.

Don’t be a spectator in this technological revolution.

Dive into the AI gold rush and watch your portfolio soar alongside the brightest minds of our generation.

This isn’t just about making money – it’s about being part of the future.

So, buckle up and get ready for the ride of your investment life!

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A New Dawn is Coming to U.S. Stocks

I work for one of the largest independent financial publishers in the world – representing over 1 million people in 148 countries.

We’re independently funding today’s broadcast to address something on the mind of every investor in America right now…

Should I put my money in Artificial Intelligence?

Here to answer that for us… and give away his No. 1 free AI recommendation… is 50-year Wall Street titan, Marc Chaikin.

Marc’s been a trader, stockbroker, and analyst. He was the head of the options department at a major brokerage firm and is a sought-after expert for CNBC, Fox Business, Barron’s, and Yahoo! Finance…

But what Marc’s most known for is his award-winning stock-rating system. Which determines whether a stock could shoot sky-high in the next three to six months… or come crashing down.

That’s why Marc’s work appears in every Bloomberg and Reuters terminal on the planet…

And is still used by hundreds of banks, hedge funds, and brokerages to track the billions of dollars flowing in and out of stocks each day.

He’s used this system to survive nine bear markets… create three new indices for the Nasdaq… and even predict the brutal bear market of 2022, 90 days in advance.

Click to continue reading…