In this article, we talk about the 11 best stocks under $3 to buy right now.

In the stock market, stocks currently trading under $3 per share are typically small-cap stocks, defined as shares of publicly traded companies with a market capitalization between $300 million and $2 billion, as in the case of every company on this list. Interestingly, it’s these companies with sub-$3 stocks that will likely benefit from the expected broadening of the overall market this year, after being neglected over the past few years, according to Francis Gannon, the co-Chief Investment Officer of Royce Investment Partners.

In a February 2 interview on CNBC Television, Gannon shared that earnings growth estimates for some under-$3 stocks could reach as high as 66% this year, noting that this will likely be a reversal of the trend of EPS losses for small-cap companies from 2023 until the first half of 2025.

Gannon, whose firm Royce Investment Partners has specialized in small-cap investments since 1972, added that when under-$3 stocks start to lead the market in growth, they tend to maintain this advantage for a decade or more. He noted that sub-$3 stocks are an equity asset class that is cheap from a valuation perspective, has a great earnings story, and is most likely to benefit from AI development and an accelerating economy.

That being said, we’re here with a list of the 11 best stocks under $3 to buy right now.

Our Methodology

We compiled a list of stocks currently valued under $3 per share. To identify the best among these sub-$3 stocks, we evaluated their potential upside and included only those with at least 40% upside. From this pool, we selected the top 11 stocks with the highest upside and ranked them accordingly. We have also included the number of hedge funds holding the stock, based on Insider Monkey’s hedge fund database, as of Q3 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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).

Note: All pricing data is as of market close on February 3, 2026

11. Petco Health and Wellness Company Inc. (NASDAQ:WOOF)

Potential Upside: 44.12%

Number of Hedge Fund Holders: 25

Petco Health and Wellness Company Inc. (NASDAQ:WOOF) is one of the best stocks under $3 to invest in. On February 2, Petco Health and Wellness Company Inc. (NASDAQ:WOOF) announced that it had completed its long-term debt refinancing. As part of its strategy to become more financially flexible and reduce leverage, Petco Health and Wellness Company Inc. (NASDAQ:WOOF) undertook measures to refinance $1.5 billion of its current term loan, as it seeks to transition its business model while facing challenges in the competitive pet retail sector. This refinancing included a $50 million voluntary prepayment in December 2025 and the recent issuance of $600 million in senior secured notes at an annual interest rate of 8.25%.

The company also announced that Glenn Murphy has changed his role from Executive Chairman, a position he has held since May 2024, “a period of great transformation for the company”, according to Petco CEO Joel Anderson. Murphy’s new role is Chairman of the Board of Directors, effective February 1.

Petco Health and Wellness Company Inc. (NASDAQ:WOOF) is a retailer of pet-oriented products and services, operating more than 1,500 stores across the U.S., Mexico, and Puerto Rico. The company provides services such as veterinary care, grooming, training, tele-health, and pet health insurance services, while its products include pet consumables and supplies.

10. iQIYI Inc. (NASDAQ:IQ)

Potential Upside: 46.23%

Number of Hedge Fund Holders: 18

Streaming platform iQIYI Inc. (NASDAQ:IQ) is one of the best stocks under $3 to invest in. On January 20, iQIYI Inc. (NASDAQ:IQ) announced the resignation of its Chief Financial Officer, Jun Wang, for personal reasons, and that Wang would remain an advisor until May 31. The company appointed Ying Zeng, the company’s Senior Vice President of Finance, as Interim Chief Financial Officer. Zeng joined the company in 2017 and has been Senior Vice President of Finance since 2022.

In its statement on the management change, iQIYI Inc. (NASDAQ:IQ) said that it has elevated a long-serving internal finance executive with IPO and financing experience to manage the company’s financial strategy as it launches a search for a permanent CFO. The company is undertaking this change amid a recent week-long slump in stock price from $2.13 in January 28 to $1.96 as of February 3, following a more bullish trend the preceding week that almost mirrors the decline.

China-based iQIYI Inc. (NASDAQ:IQ) is an online entertainment company that offers membership services on its video streaming platform. The company’s scope of services includes online advertising services, content distribution, online games, live broadcasting, IP licensing, talent agency, and online literature.