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.
9. GoodRx Holdings, Inc. (NASDAQ:GDRX)
Price: $3.93
Number of Hedge Fund Holders: 28
Analyst Upside Potential: 36.77%
GoodRx Holdings, Inc. (NASDAQ:GDRX) is one of the Best Penny Stocks to Buy with the Highest Upside Potential. Wall Street has a mixed opinion on GoodRx Holdings, Inc. (NASDAQ:GDRX) since the company released its fiscal second quarter results on August 6, 2025.
The company posted a revenue of $203.07 million, up slightly by 1.23% year-over-year, but below the consensus by $2.64 million. The EPS of $0.04 stayed in line with the expectations. Management noted that the prescription transaction revenue fell 3% to $143.1 million, mainly due to a 14% drop in Monthly Active Consumers caused by retail pharmacy changes. Moreover, the subscription revenue decreased 7% to $20.5 million, linked to fewer subscription plans.
Since the release, Wall Street has had a mixed opinion. For instance, on August 18, Michael Cherny from Leerink Partners reiterated a Buy rating on the stock with a price target of $6. Later on the same day, Steven Valiquette from Mizuho Securities reiterated a Hold rating on the stock with a price target of $5. More recently, on September 25, Allen Lutz from Bank of America Securities reiterated a Sell rating on $3.4 price target.
GoodRx Holdings, Inc. (NASDAQ:GDRX) is a US platform that helps consumers save money on medications.
8. Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX)
Price: $4.63
Number of Hedge Fund Holders: 21
Analyst Upside Potential: 40.39%
Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) is one of the Best Penny Stocks to Buy with the Highest Upside Potential. On September 10, Gil Blum from Needham reiterated a Buy rating on Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) with a price target of $8.
The analyst noted that the company has formed solid partnerships with major pharmaceutical companies, which are increasingly relying on TechBio companies like Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) for AI and machine learning expertise. He noted that this makes it very important in its field. It is also the only public company with such a significant role.
Moreover, Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) chooses to focus on quality partnerships rather than many small deals. These collaborations have the potential for major financial impact. The company is also developing its own platform, RecursionOS, and advancing its internal drug pipeline.
Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) is a clinical-stage TechBio company that uses advanced technology to accelerate drug discovery.
7. Cosan S.A. (NYSE:CSAN)
Price: $4.65
Number of Hedge Fund Holders: 12
Analyst Upside Potential: 45.56%
Cosan S.A. (NYSE:CSAN) is one of the Best Penny Stocks to Buy with the Highest Upside Potential. On September 22, Reuters reported that Cosan S.A. (NYSE:CSAN) a major Brazilian conglomerate, indicated its plans to raise up to 10 billion reais ($1.9 billion) through public offerings.
Management noted that the funds will be used only to reduce Cosan’s debt, not to support its joint venture, Raizen, with Shell. The company’s net debt stood at 17.5 billion reais at the end of June, unchanged from earlier in the year. Despite some analyst support, Cosan S.A. (NYSE:CSAN)’s shares fell sharply by 21%, their largest drop ever, wiping out about 3 billion reais in market value. Moreover, Raizen’s shares also dropped 9% as the company faces challenges due to low sugarcane yields, affecting profits and debt.
Cosan S.A. (NYSE:CSAN) is a Brazilian company active mainly in oil marketing and energy.
6. EVgo, Inc. (NASDAQ:EVGO)
Price: $4.63
Number of Hedge Fund Holders: 26
Analyst Upside Potential: 51.19%
EVgo, Inc. (NASDAQ:EVGO) is one of the Best Penny Stocks to Buy with the Highest Upside Potential. Wall Street is bullish on EVgo, Inc. (NASDAQ:EVGO) since it released its fiscal second-quarter results for 2025. The company grew its revenue by 47.15% year-over-year to reach $98.03 million, which was ahead of the consensus by $13.55 million. The EPS of negative $0.10, however, fell short of the consensus by $0.01.
Management noted that the quarterly revenue was a record high, driven by strong demand and operational execution. Notably, the company’s charging network revenue reached $51.8 million, marking the 14th consecutive quarter of double-digit year-over-year growth at 46%.
Several analysts have expressed their bullish sentiment for EVgo, Inc. (NASDAQ:EVGO). On September 15, Andres Sheppard from Cantor Fitzgerald reiterated a Buy rating on the stock with a price target of $7. Later on September 21, Bill Peterson from J.P. Morgan also reiterated a Buy rating on the stock with a price target of $7.
EVgo, Inc. (NASDAQ:EVGO) is a leading electric vehicle (EV) fast charging network in the United States, operating more than 1,100 public fast charging stations across 40 states.
5. Lotus Technology Inc. (NASDAQ:LOT)
Price: $1.94
Number of Hedge Fund Holders: 8
Analyst Upside Potential: 54.64%
Lotus Technology Inc. (NASDAQ:LOT) is one of the Best Penny Stocks to buy with the Highest Upside Potential. On September 5, Lotus Technology Inc. (NASDAQ:LOT) announced that Lotus Car will showcase a strong presence at IAA Mobility 2025 in Munich.
The main attraction is the German debut of their concept car, Theory 1. Management notes that this car is a depiction of the future of intelligent sports cars. Moreover, alongside Theory 1, Lotus Technology Inc. (NASDAQ:LOT) will honor Ayrton Senna with his iconic 1987 Lotus 99T F1 car. They will also present the Emira Limited edition, inspired by that famous race car; only twelve Emira Limited cars exist worldwide.
Management also noted that Theory 1 features the LOTUSWEAR system, which interacts with drivers and passengers in real time. The car uses sustainable materials and has a minimalist interior.
The company reported a 49% year-over-year decrease in deliveries for the fiscal second quarter of 2025. Analysts remain optimistic with their 12-month price target presenting a 54.64% upside from the current levels.
Lotus Technology Inc. (NASDAQ:LOT) designs, develops, manufactures, and sells luxury electric vehicles. It focuses on electrification, digitalization, and intelligent automotive technologies.
4. AbCellera Biologics Inc. (NASDAQ:ABCL)
Price: $4.65
Number of Hedge Fund Holders: 17
Analyst Upside Potential: 82.80%
AbCellera Biologics Inc. (NASDAQ:ABCL) is one of the Best Penny Stocks to Buy with the Highest Upside Potential. Wall Street is bullish on AbCellera Biologics Inc. (NASDAQ:ABCL) since the company released its fiscal second-quarter results for 2025.
The company announced several key clinical announcements, for instance, it started dosing in a Phase 1 trial of ABCL635, aimed at treating moderate-to-severe vasomotor symptoms. Moreover, the company also began a Phase 1 trial for ABCL575 for moderate-to-severe atopic dermatitis. The drug targets the OX40 ligand to regulate inflammation and is engineered for dosing every six months.
In addition, AbCellera Biologics Inc. (NASDAQ:ABCL) also topped analyst expectations with revenue of $17.08 million, which grew 133.29% year-over-year and topped estimates by $10.72 million. Although the company posted a net loss of $0.12 per share, this was ahead of the expectations by $0.04.
Several analysts have reiterated their bullish sentiment since the release. On August 14, Truist Financials reiterated a Buy rating on the stock, with a price target of $10. More recently, on September 11, Brendan Smith from TD Cowen also reiterated a Buy rating on the stock without disclosing any price targets.
AbCellera Biologics Inc. (NASDAQ:ABCL) discovers and develops antibody medicines for various diseases, including cancer, metabolic, endocrine, and autoimmune disorders.
3. VinFast Auto Ltd. (NASDAQ:VFS)
Price: $3.13
Number of Hedge Fund Holders: 6
Analyst Upside Potential: 91.69%
VinFast Auto Ltd. (NASDAQ:VFS) is one of the Best Penny Stocks to Buy with the Highest Upside Potential. On September 25, VinFast Auto Ltd. (NASDAQ:VFS) announced that its VinFast Auto India has partnered with the Central Bank of India to boost car financing.
Management noted that they signed a Memorandum of Understanding to offer easy and affordable loans through VinFast’s dealer network. As a result of this, the customers will get special financing deals, including low interest rates, flexible payments, no processing fees, and exclusive offers. Moreover, the Central Bank’s representatives will be present in all VinFast Auto Ltd. (NASDAQ:VFS) showrooms to help buyers directly, making EV ownership simpler and more convenient.
The partnership supports the company’s goal to speed up the adoption of electric vehicles in India’s growing EV market.
VinFast Auto Ltd. (NASDAQ:VFS) designs, manufactures, and sells electric vehicles, including cars, e-scooters, and e-buses.
2. Alight, Inc. (NYSE:ALIT)
Price: $3.07
Number of Hedge Fund Holders: 30
Analyst Upside Potential: 128.01%
Alight, Inc. (NYSE:ALIT) is one of the Best Penny Stocks to Buy with the Highest Upside Potential. On September 17, Alight, Inc. (NYSE:ALIT) announced adding Sword Health, which is an AI-powered platform for musculoskeletal and mental health care, to its Alight Partner Network.
This integration is part of the company’s Alight Worklife platform. As a result of this addition, employees will get personalized tools to manage MSK and mental health issues. Sword Health offers specialized programs, which include Thrive, Move, and Bloom. Moreover, its Mind program provides AI-driven mental health therapy supported by licensed psychologists and biometric data.
The partnership aims to improve employee well-being and reduce employer costs by offering clinical-grade, AI-powered care that helps prevent surgery and builds mental resilience.
Alight, Inc. (NYSE:ALIT) is a cloud-based human capital technology and services provider. The company offers integrated solutions for managing employee benefits, payroll, and HR.
1. ImmunityBio, Inc. (NASDAQ:IBRX)
Price: $2.46
Number of Hedge Fund Holders: 14
Analyst Upside Potential: 225.20%
ImmunityBio, Inc. (NASDAQ:IBRX) is one of the Best Penny Stocks to Buy with the Highest Upside Potential. On September 8, ImmunityBio, Inc. (NASDAQ:IBRX) announced new findings from its Phase 2 QUILT-3.055 study. The study tested ANKTIVA, which helps reverse lymphopenia.
The results show that reversing lymphopenia with ANKTIVA led to significantly longer median overall survival. Patients whose lymphocyte counts increased above 1,200 cells/μL had better survival outcomes. Moreover, ANKTIVA is the first therapy being tested to treat lymphopenia caused by cancer treatments like chemotherapy and radiotherapy.
Wall Street has been bullish on ImmunityBio, Inc. (NASDAQ:IBRX) since the release. On September 9, Justin Zelin from BTIG reiterated a Buy rating on the stock with a price target of $6. More recently, on September 17, H.C. Wainwright also reiterated a Buy rating on the stock with a price target of $8.
ImmunityBio, Inc. (NASDAQ:IBRX) is a clinical-stage biotechnology company focused on developing therapies that strengthen the natural immune system to fight cancer and infectious diseases.
While we acknowledge the potential of IBRX 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 IBRX and that has 100x upside potential, check out our report about this cheapest AI stock.
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