US stocks declined before Monday’s trading after the US joined Israel’s war with Iran by striking three Iranian nuclear sites over the weekend. This move by President Donald Trump caused oil prices to rise and increased fears of a bigger conflict in the Middle East.
Futures for the Dow Jones Industrial Average dropped by 0.3%, or 109 points. S&P 500 futures fell by 0.3% and Nasdaq 100 futures declined by 0.4%.
On Saturday, the US attacked Iranian nuclear sites at Fordo, Isfahan, and Natanz. This came as a surprise for investors who were anticipating more diplomatic efforts after President Trump had stated on Friday that he would decide on attacking Iran “within the next two weeks.”
Oil prices were already rising due to the tensions in the Middle East. On Sunday night, US crude oil futures went up another 3.8% to reach nearly $77 a barrel.
Jay Woods, chief global strategist at Freedom Capital Markets, noted that markets can overreact with exaggerated moves during conflicts, and these can last two to three weeks. He highlighted that the S&P 500 fell 6% and oil prices spiked during the Ukraine conflict.
With this background in mind, let’s take a look at the 11 best US Stocks to invest in under $5.
Our Methodology
To compile our list of the 11 best US stocks to invest in under $5, we used the Finviz stock screener. We sorted our results based on market capitalization and picked the top 30 American stocks with a share price of under $5 as of June 20, 2025. Next, we focused on the top 11 stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q1 2025 database of 1,000 elite hedge funds. Finally, the 11 best US stocks to invest in under $5 were ranked in ascending order based on the number of hedge funds holding stakes in them as of Q1 2025.
Why do we care about what hedge funds do? 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 US Stocks to Invest in Under $5
11. EVgo, Inc. (NASDAQ:EVGO)
Share Price: $3.91
Number of Hedge Fund Holders: 26
EVgo, Inc. (NASDAQ:EVGO) is one of the 11 best US stocks to invest in under $5. On May 14, Stifel analysts maintained a “Buy” rating on EVgo, Inc. (NASDAQ:EVGO) with a price target of $8.00.
The analysts showed confidence in the company’s strong performance based on the first-quarter 2025 results.
Stifel analysts highlighted that EVgo, Inc. (NASDAQ:EVGO) has continued to exceed expectations and remains their top pick among US electric vehicle charging companies. The first quarter of 2025 showed promising signs, such as the likely retention of a Department of Energy loan and expected better profit margins in the company’s charging business.
The analysts also pointed out that tariffs are expected to have little impact on EVgo, Inc.’s (NASDAQ:EVGO) plans to install new chargers in 2025. The company’s management has also reiterated its guidance for 2025, which supports a stable outlook.
While there is some concern about slower EV sales, Stifel analysts believe that the growing number of EVs on the road will increase the use and throughput of EVgo, Inc.’s (NASDAQ:EVGO) charging network. The growth in EV usage is seen as a key factor driving the company’s future growth and performance.
EVgo, Inc. (NASDAQ:EVGO) is an electric vehicle fast charging provider in the United States with over 1,100 fast charging stations across more than 40 states.
10. JetBlue Airways Corporation (NASDAQ:JBLU)
Share Price: $4.01
Number of Hedge Fund Holders: 27
JetBlue Airways Corporation (NASDAQ:JBLU) is one of the 11 best US stocks to invest in under $5. On May 29, Morgan Stanley maintained its “Equal Weight” rating for JetBlue Airways Corporation (NASDAQ:JBLU) with a price target of $8.00.
This decision came after JetBlue Airways Corporation (NASDAQ:JBLU) announced a collaboration with United Airlines called Blue Sky, which aims to link their loyalty programs.
This announcement eased worries about a possible merger, which could have brought more risks. Morgan Stanley analysts believe that while both airlines will benefit, JetBlue Airways Corporation (NASDAQ:JBLU) stands to gain more from this collaboration.
The analysts also believe that the Blue Sky partnership won’t face the same regulatory problems that a previous alliance, the Northeast Alliance, encountered because JetBlue Airways Corporation (NASDAQ:JBLU) would have learned from that experience to avoid potential challenges.
JetBlue Airways Corporation (NASDAQ:JBLU) is an American major airline that carries customers to over 100 destinations across the US, Latin America, the Caribbean, Canada, and Europe.
9. Taboola.com Ltd. (NASDAQ:TBLA)
Share Price: $3.52
Number of Hedge Fund Holders: 27
Taboola.com Ltd. (NASDAQ:TBLA) is one of the 11 best US stocks to invest in under $5. On June 11, Taboola.com Ltd. (NASDAQ:TBLA) introduced DeeperDive, a new kind of AI answer engine that works directly on publisher websites and uses their own content.
DeeperDive is designed to help readers find trusted information on topics they care about without leaving the publisher sites. Major publishers like Gannett I USA TODAY Network in the US and The Independent in the UK have joined Taboola.com Ltd. (NASDAQ:TBLA) as design partners for DeeperDive.
The AI engine can provide answers instantly, sourced from trusted journalists, to answer any questions that the readers might have. Taboola.com Ltd. (NASDAQ:TBLA) aims to help publishers deploy DeeperDive to deliver a modern, AI-powered user experience that will meet the needs of today’s audiences.
Taboola.com Ltd. (NASDAQ:TBLA) is a performance advertising technology company that powers recommendations for the open web to help people explore things they might like. The company helps digital properties, including websites, devices, and mobile apps, to drive monetization and user engagement.
8. Hanesbrands Inc. (NYSE:HBI)
Share Price: $4.43
Number of Hedge Fund Holders: 28
Hanesbrands Inc. (NYSE:HBI) is one of the 11 best US stocks to invest in under $5. On May 19, Barclays analyst Adrienne Yih raised the price target for Hanesbrands Inc. (NYSE:HBI) from $5 to $6 while keeping an “Equal Weight” rating.
This decision came after several meetings with the company’s management, which provided important insights into how the company is doing and its future plans.
Yih noted that the overall tone from these meetings was optimistic and management showed confidence in their strategy and the growth potential for Hanesbrands Inc. (NYSE:HBI). Despite industry challenges like intermittent tariffs, the company is seen to have handled these well. Yih expects no major supply chain disruptions from tariffs for the rest of the year.
The reason for raising the price target on Hanesbrands Inc. (NYSE:HBI) was a change in the valuation multiple used to value the company, which moved from 9 times to 10 times.
Hanesbrands Inc. (NYSE:HBI) is an American multinational clothing company that is known for its basics and innerwear brands.
7. Coty Inc. (NYSE:COTY)
Share Price: $4.77
Number of Hedge Fund Holders: 29
Coty Inc. (NYSE:COTY) is one of the 11 best US stocks to invest in under $5. On June 17, Jefferies reiterated a “Buy rating with a price target of $6.00 Coty Inc. (NYSE:COTY). This decision comes amid industry reports that the company is looking for buyers for a selloff in two parts.
According to a report by Women’s Wear Daily (WWD), a trade publication focused on the fashion industry, Coty Inc. (NYSE:COTY) could be looking to divest its business in two parts by offering its Prestige and Consumer divisions separately. However, the company has not officially confirmed this.
Industry sources told WWD that Inter Parfums is in talks with Coty Inc. (NYSE:COTY) about its luxury brands and has made an offer specifically for the company’s Burberry license. Inter Parfums has not publicly commented on these discussions and the talks are still in early stages with no final agreements reached.
Despite the rumors of a possible sale, Jefferies analyst Ashley Helgans maintains a positive outlook on Coty Inc. (NYSE:COTY) and reaffirmed both the price target and the buy rating.
Coty Inc. (NYSE:COTY) is an American multinational beauty company with a portfolio of iconic brands across fragrance, color cosmetics, and skin and body care. Through its prestige and consumer products, the company serves consumers in over 120 countries and territories around the world.
6. MannKind Corporation (NASDAQ:MNKD)
Share Price: $3.77
Number of Hedge Fund Holders: 29
MannKind Corporation (NASDAQ:MNKD) is one of the 11 best US stocks to invest in under $5. MannKind Corporation (NASDAQ:MNKD) reported that it will present its inhaled insulin product at the American Diabetes Association’s 85th Scientific Sessions, which is taking place from June 20 to June 23 in Chicago.
During a “Future Ready” symposium, Dr. Michael J. Haller, Professor and Chief of Pediatric Endocrinology at the University of Florida, will share results from the randomized period of the INHALE-1 clinical trial. Dr. Haller also serves as the Chair for MannKind Corporation’s (NASDAQ:MNKD) Phase 3 INHALE-1 study of Afrezza, an inhaled insulin powder, in children and adolescents between 4 and 17 years old.
MannKind Corporation (NASDAQ:MNKD) aims to release the topline results from the full pediatric study with safety extension in the second quarter of 2025. The company also expects to submit a Supplemental Biologics License Application in mid-2025 for a possible pediatric indication for Afrezza.
MannKind Corporation (NASDAQ:MNKD) is a biopharmaceutical company focused on developing and commercializing innovative inhaled therapeutic products and devices for those living with endocrine and orphan lung diseases.
5. GoodRx Holdings, Inc. (NASDAQ:GDRX)
Share Price: $4.60
Number of Hedge Fund Holders: 30
GoodRx Holdings, Inc. (NASDAQ:GDRX) is one of the 11 best US stocks to invest in under $5. On May 14, KeyBanc Capital Markets reiterated an “Overweight” rating on GoodRx Holdings, Inc. (NASDAQ:GDRX) with a price target of $6.
KeyBanc’s analyst, Scott Schoenhaus, highlighted the current position of GoodRx Holdings, Inc. (NASDAQ:GDRX) within the challenging retail pharmacy industry. The analyst noted that the company is making strategic moves to navigate challenges, including the company’s direct contracting strategy and its response to events like the recent Rite Aid bankruptcy.
GoodRx Holdings, Inc. (NASDAQ:GDRX) is focusing on new opportunities that involve various players in the pharmacy ecosystem, including manufacturers, retailers, pharmacy benefit managers (PBMs), and consumers. While the re-acceleration of Monthly Active Consumers (MACs) might be delayed until next year, GoodRx Holdings, Inc. (NASDAQ:GDRX) has the potential to increase revenue per MAC through these direct contracting relationships.
Schoenhaus also expressed confidence in CEO Wendy Barnes and her team’s ability to carry out a profitable growth plan, which could lead to higher estimates for 2025.
GoodRx Holdings, Inc. (NASDAQ:GDRX) is an American company that is known for its digital healthcare platform that connects consumers, healthcare professionals, payers, PBMs, pharma manufacturers, and retail pharmacies to make medications more accessible.
4. Clover Health Investments, Corp. (NASDAQ:CLOV)
Share Price: $3.02
Number of Hedge Fund Holders: 33
Clover Health Investments, Corp. (NASDAQ:CLOV) is one of the 11 best US stocks to invest in under $5. On April 8, Canaccord Genuity analyst Richard Close reiterated a “Buy” rating on Clover Health Investments, Corp. (NASDAQ:CLOV) with a price target of $4.50.
According to the analyst, the final rate update is good news for Clover Health Investments, Corp. (NASDAQ:CLOV). Close believes this change will help the company and could also improve the managed care sector’s overall sentiment.
The company is expected to continue growing strongly in 2025. This growth will also help Clover Health Investments, Corp. (NASDAQ:CLOV) in 2026 as the company benefits from reimbursements tied to having a 4-Star rating.
Canaccord Genuity will be looking at the competitive landscape closely as new plans for 2026 are introduced. Close noted that the positive rate update should improve the outlook for the managed care sector.
Clover Health Investments, Corp. (NASDAQ:CLOV) is an American company that provides Medicare Advantage insurance plans.
3. TeraWulf Inc. (NASDAQ:WULF)
Share Price: $3.74
Number of Hedge Fund Holders: 35
TeraWulf Inc. (NASDAQ:WULF) is one of the 11 best US stocks to invest in under $5. On June 12, Rosenblatt Securities increased its price target on TeraWulf Inc. (NASDAQ:WULF) from $4.50 to $6.00 and kept a “Buy” rating.
This decision came after Rosenblatt’s 5th Annual Tech Summit where TeraWulf Inc.’s (NASDAQ:WULF) CFO Patrick Fleury and Director of Investor Relations John Larkin discussed the company’s operations and future outlook.
The company is expected to start earning revenue from its high-performance computing (HPC) hosting business. This will make TeraWulf Inc. (NASDAQ:WULF) one of the few Bitcoin miners that have secured HPC hosting deals.
Rosenblatt highlighted TeraWulf Inc.’s (NASDAQ:WULF) “strong first tenant” and its “power expertise to execute” as key reasons why the company is likely to attract more interest and grow its HPC in the short term.
The increased price target of $6.00 is based on 27 times Rosenblatt’s 2026 Adjusted EBITDA estimate for TeraWulf Inc. (NASDAQ:WULF). Rosenblatt also noted that the stock is currently trading “at a material discount to peers with relatively high short interest.”
TeraWulf Inc. (NASDAQ:WULF) develops, owns, and operates advanced data center infrastructure in the US, specifically designed for Bitcoin mining and hosting HPC workloads.
2. UWM Holdings Corporation (NYSE:UWMC)
Share Price: $4.04
Number of Hedge Fund Holders: 36
UWM Holdings Corporation (NYSE:UWMC) is one of the 11 best US stocks to invest in under $5. On April 7, Morgan Stanley analysts upgraded the firm’s rating on UWM Holdings Corporation (NYSE:UWMC) from “Equal Weight” to “Overweight” and raised the price target from $6 to $6.50.
The analysts pointed out that when the 10-year Treasury yield dropped below 4% and the 30-year fixed-rate mortgage rate hit 6% in August and September of 2024, refinancing activity in the US more than doubled in the second half of 2024 to reach about $260 billion. With the 10-year yield currently at or just under 4%, Morgan Stanley expects another surge in refinancing volumes.
As a result, the firm has increased its forecast for total US mortgage and originations in 2025 and 2026 by 3% and 4%. Morgan Stanley now expects $2.03 trillion in 2025 and $2.33 trillion in 2026. Refinancing volumes are also expected to rise by 12% and 13%, reaching $611 billion in 2025 and $770 billion in 2026.
UWM Holdings Corporation (NYSE:UWMC) mainly focuses on purchase-oriented business and the mortgage broker market. However, the company is making strategic moves to grow its share of the refinancing market. Morgan Stanley believes UWM Holdings Corporation (NYSE:UWMC) can continue to gain market share in refinancing against the backdrop of rising refinancing activity.
Because of these trends, Morgan Stanley raised its 2026 earnings per share estimate for UWM Holdings Corporation (NYSE:UWMC) by 12% to 58 cents.
UWM Holdings Corporation (NYSE:UWMC) is the largest wholesale mortgage lender in the US.
1. Lumen Technologies, Inc. (NYSE:LUMN)
Share Price: $3.94
Number of Hedge Fund Holders: 39
Lumen Technologies, Inc. (NYSE:LUMN) is one of the 11 best US stocks to invest in under $5. On May 5, Raymond James analyst, Frank Louthan, upgraded the firm’s rating on Lumen Technologies, Inc. (NYSE:LUMN) from “Market Perform” to “Outperform” and set a price target of $4.50.
This decision comes amid expectations that Lumen Technologies, Inc. (NYSE:LUMN) will see important changes over the next six to nine months that could increase the company’s equity value. Louthan suggests that the main reason for this positive outlook is the expected sale of the company’s Fiber-to-the-Home (FTTH) assets and customers.
According to the analyst, selling these assets could greatly improve Lumen Technologies, Inc.’s (NYSE:LUMN) financial situation. It could reduce the company’s financial leverage by as much as a full turn. Louthan expects that the after-tax proceeds from the sale could be a game-changer for the company.
Additionally, the analyst expects that after the sale of its FTTH assets, Lumen Technologies, Inc. (NYSE:LUMN) could benefit from a series of financial events and refinancing opportunities. This could help raise the value of the company’s stock further.
Lumen Technologies, Inc. (NYSE:LUMN) is an American telecommunications company that offers networking, edge cloud, collaboration, and cybersecurity solutions.
While we acknowledge the potential of LUMN as an investment, 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 LUMN and that has a 100x upside potential, check out our report about the cheapest AI stock.
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Disclosure: None.
