The S&P 500 is set to outperform the Russell 2000 in annual performance for the 10th time over the past 12 years. During this time, the broad market index, the S&P 500, has made more than twice the gains of the smaller-cap Russell 2000.
As of November 6, the S&P 500 has gained 14.51% year-to-date. In comparison, the Russell 2000 has gained only 8.39%.
In September 2025, Jordan Irving, a small-cap portfolio manager at Glenmede Investment Management, said:
“They have underperformed relative to large caps for eons … so you get to a point where the bar to clear is pretty darn low.”
Irving also used forward price-to-earnings estimates and highlighted that the profit-generating companies in the Russell 2000 are trading at a significant discount compared to the S&P 500.
Mark Hackett, chief market strategist at Nationwide, said:
“We’re now going to see growth rates next year faster for small caps than large caps.”
The performance of small-cap companies is closely linked to the economy. According to Mark Luschini, chief investment strategist at Janney Montgomery Scott, smaller companies can be more affected by domestic growth than big multinational firms.
However, in August 2025, strategists at the Wells Fargo Investment Institute downgraded US small-cap stocks to “unfavorable.” They believe that economic growth won’t be strong enough to help small caps outperform large caps in 2026.
With this background in mind, let’s take a look at the 12 best American penny stocks to buy right now.
Image: Depositphotos
Our Methodology
To compile our list of the 12 best American penny stocks to buy right now, we used the Finviz stock screener to find stocks with a share price of under $5 as of November 6, 2025. We sorted our results based on market capitalization and picked the 30 largest American stocks. Next, we focused on the top 12 stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q2 2025 database of 983 elite hedge funds. Finally, the 12 best American penny stocks to buy were ranked in ascending order based on the number of hedge funds holding stakes in them as of Q2 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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
12 Best American Penny Stocks to Buy Right Now
12. Plug Power Inc. (NASDAQ:PLUG)
Share Price: $2.51
Number of Hedge Fund Holders: 23
Plug Power Inc. (NASDAQ:PLUG) is one of the best American penny stocks to buy right now. On October 30, Plug Power Inc. (NASDAQ:PLUG) shared that it signed a binding supply agreement with Allied Biofuels FE LLC (ABF) for up to 2 gigawatts (GW) of GenEco PEM electrolyzer systems.
This deal will help ABF develop sustainable aviation fuel (SAF), electro-sustainable aviation fuel (eSAF), and green diesel. According to the report by Plug Power Inc. (NASDAQ:PLUG), the final investment decision is expected in the fourth quarter of 2026.
Previously, Plug Power Inc. (NASDAQ:PLUG) partnered with Allied Green Ammonia in Australia for 3 GW. With this new supply agreement for 2 GW with ABF, the total contracted electrolyzer capacity between Plug Power Inc. (NASDAQ:PLUG) and its Allied partners has now reached 5 GW.
The company’s technology will be used at ABF’s sustainable aviation fuel (SAF) and electro-sustainable aviation fuel (eSAF) plant in Uzbekistan, a strategically chosen site that can serve global sustainable fuel markets.
Plug Power Inc. (NASDAQ:PLUG) is a global company specializing in hydrogen fuel-supply solutions. It provides electrolyzers, liquid hydrogen, fuel cell systems, storage tanks, and fueling infrastructure to various industries, including material handling, industrial applications, and energy producers.
11. Bit Digital, Inc. (NASDAQ:BTBT)
Share Price: $3.03
Number of Hedge Fund Holders: 27
Bit Digital, Inc. (NASDAQ:BTBT) is one of the best American penny stocks to buy right now. On October 31, Bit Digital, Inc. (NASDAQ:BTBT) shared its preliminary financial estimates for the third quarter ended September 30, 2025. These estimates were included in a filing with the Securities and Exchange Commission (SEC).
According to the filing, Bit Digital, Inc. (NASDAQ:BTBT) expects its preliminary unaudited revenue for the quarter ending September 30, 2025, to be between $28.9 million and $32.0 million. The cost of revenue, excluding depreciation, is expected to be between $11.5 million and $12.7 million. Additionally, the company expects cash and cash equivalents as of September 30, 2025, to range from $173.7 million to $184.5 million.
Bit Digital, Inc. (NASDAQ:BTBT) pointed out that these preliminary numbers are based on information that is currently available and are subject to the completion of the financial closing process. The actual results for the third quarter may differ from these preliminary estimates.
Previously, on October 7, Bit Digital, Inc. (NASDAQ:BTBT) also announced that it had acquired 653 Ethereum during the month of September 2025. The total average Ethereum acquisition price for all holdings as of September 30, 2025, was $2,643.27.
Bit Digital, Inc. (NASDAQ:BTBT) is a digital asset platform company that focuses on Ethereum-native treasury and staking strategies. It operates one of the largest Ethereum staking infrastructures in the world.
10. Newell Brands Inc. (NASDAQ:NWL)
Share Price: $3.11
Number of Hedge Fund Holders: 28
Newell Brands Inc. (NASDAQ:NWL) is one of the best American penny stocks to buy right now. On November 3, RBC Capital reduced its price target on Newell Brands Inc. (NASDAQ:NWL) from $8 to $4.50 and kept a Sector Perform rating. This followed the company’s Q3 results, which RBC Capital called “one of its more challenging results in recent history.”
The research firm noted that Newell Brands Inc. (NASDAQ:NWL) is running much better now than when it started its journey of recovery. However, RBC Capital still finds it difficult to be more optimistic about the stock as the company’s performance is being dictated by external factors.
On November 3, Canaccord Genuity also reduced its price target on Newell Brands Inc. (NASDAQ:NWL) from $9 to $7 and kept its Buy rating.
This decision came after the company reported weaker-than-expected results for the third quarter. Newell Brands Inc. (NASDAQ:NWL) reported sales 4% below market expectations. Gross profit came in 5% lower than consensus estimates while adjusted EBITDA was also 6% below market expectations.
Canaccord Genuity pointed out that their “patience is clearly being tested,” but they still believe there is “asymmetric upside” in Newell Brands Inc.’s (NASDAQ:NWL) shares. The research firm noted that “turnarounds do not happen in a straight line.”
Newell Brands Inc. (NASDAQ:NWL) is an American consumer goods company with a strong portfolio of brands such as Rubbermaid, Sharpie, Graco, Coleman, Rubbermaid Commercial Products, Yankee Candle, Paper Mate, FoodSaver, Dymo, EXPO, Elmer’s, Oster, NUK, Spontex, and Campingaz.
9. GoodRx Holdings, Inc. (NASDAQ:GDRX)
Share Price: $3.16
Number of Hedge Fund Holders: 28
GoodRx Holdings, Inc. (NASDAQ:GDRX) is one of the best American penny stocks to buy right now. On November 6, Goldman Sachs increased its price target on GoodRx Holdings, Inc. (NASDAQ:GDRX) from $3.75 to $4 and kept a Neutral rating.
This decision came after the company reported its results for the third quarter of 2025. The research firm highlighted that GoodRx Holdings, Inc. (NASDAQ:GDRX) is working on expanding accessibility and affordability programs. The company is also engaged in talks about participating in the TrumpRx initiative.
Goldman Sachs noted that there are ongoing challenges in the industry. These include uncertainties about the Affordable Care Act marketplace subsidies and Medicaid support. The firm pointed out that GoodRx Holdings, Inc. (NASDAQ:GDRX) delivered a strong performance through its pharma manufacturer solutions in the third quarter of 2025.
Additionally, Goldman Sachs mentioned the company’s new brand campaign, which helps raise awareness of its consumer products and services. These include new subscription services that focus on hair loss and weight loss treatments.
However, the research firm cautioned that GoodRx Holdings, Inc. (NASDAQ:GDRX) could experience volatility. This risk comes from potential regulatory changes and platform launches from Washington. Consumer affordability challenges are also expected to remain an important area for investors.
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 affordable and accessible.
8. Alight, Inc. (NYSE:ALIT)
Share Price: $2.39
Number of Hedge Fund Holders: 30
Alight, Inc. (NYSE:ALIT) is one of the best American penny stocks to buy right now. On October 30, Alight, Inc. (NYSE:ALIT) announced an expanded multi-year partnership with IBM to combine IBM watsonx with its own offerings as the company aims to improve how employee benefits are managed and make business operations more efficient.
Through this expanded partnership, Alight, Inc. (NYSE:ALIT) is focusing on digital transformation by equipping clients with AI-powered tools, which will offer hyper-personalized benefits and support for employees.
IBM and Alight, Inc. (NYSE:ALIT) will also set up a virtual AI innovation hub with an aim to speed up the redesigning of business processes, develop new AI solutions, and encourage continuous innovation. Experts from both companies will work together with Alight, Inc.’s (NYSE:ALIT) clients to identify and test AI use cases, improve benefit guidance like leave of absence support, and build new features tailored to client needs.
A key part of this partnership is IBM watsonx Orchestrate. This product offers over 500 tools and customizable agents that are domain-specific from IBM and its partners. Alight, Inc. (NYSE:ALIT) will use this product to automate workflows and improve the flow of information within its systems, applications, and AI agents. This will help break down silos and speed up the delivery of new features across Alight, Inc.’s (NYSE:ALIT) enterprise data network. The partnership will also include the use of watsonx Orchestrate Agent Catalog, which is a marketplace that helps identify, deploy, and improve enterprise agents from IBM, its partners, and custom builds.
Alight, Inc. (NYSE:ALIT) is a leading cloud-based human capital technology and services provider. The company’s Alight Worklife platform helps organizations manage employee benefits like healthcare, payroll, and wellbeing.
7. Marqeta, Inc. (NASDAQ:MQ)
Share Price: $4.88
Number of Hedge Fund Holders: 31
Marqeta, Inc. (NASDAQ:MQ) is one of the best American penny stocks to buy right now. On November 3, Marqeta, Inc. (NASDAQ: MQ) shared that it is working with Klarna to expand Klarna Card into 15 new European markets.
Klarna is a global digital bank and flexible payments provider. This new expansion builds upon Marqeta, Inc. (NASDAQ:MQ) and Klarna’s partnership. This announcement comes after the successful launch of the Klarna Card in the US in June 2025.
Marqeta, Inc. (NASDAQ:MQ) became the first issuer processor certified for Visa Flexible Credential in the US in July 2024. The new expansion will leverage Visa’s Flexible Credential technology, allowing customers to choose whether they want to pay now or later, all with just one debit card.
By integrating with Marqeta, Inc.’s (NASDAQ:MQ) platform, Klarna will be able to launch its card quickly and grow efficiently across multiple markets.
Marqeta, Inc. (NASDAQ:MQ) is a financial technology company that provides a modern open API platform that helps businesses customize cards, instantly issue cards, and use modern payment solutions.
6. Coty Inc. (NYSE:COTY)
Share Price: $3.72
Number of Hedge Fund Holders: 33
Coty Inc. (NYSE:COTY) is one of the best American penny stocks to buy right now. On October 20, TD Cowen reiterated its Hold rating on Coty Inc. (NYSE:COTY) with a price target of $4.
Previously, on October 17, Canaccord Genuity had also reaffirmed its Hold rating on Coty Inc. (NYSE:COTY) with a $4 price target. The research firm met with Coty Inc.’s (NYSE:COTY) CEO Sue Naby and CFO Laurent Mercier, who spoke about their focus on the company’s high-end business areas like fragrance and skin care. These segments offer better growth and profit potential.
The company’s management also talked about the recently announced strategic review of the consumer business, product range, and debt refinancing efforts. Coty Inc. (NYSE:COTY) is looking at strategic alternatives for its mass color cosmetics business and its Brazilian brands business, which is seen as very profitable.
Canaccord Genuity pointed out that Coty Inc. (NYSE:COTY) could sell some assets in the future in order to strengthen its balance sheet. The research firm believes that we could see the company sell Wella soon. However, the firm noted that the company still has work to do as it tries to reposition for profitable growth.
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. The company serves consumers in over 130 countries and territories around the world.
5. Taysha Gene Therapies, Inc. (NASDAQ:TSHA)
Share Price: $3.92
Number of Hedge Fund Holders: 34
Taysha Gene Therapies, Inc. (NASDAQ:TSHA) is one of the best American penny stocks to buy right now. On November 5, Citizens increased its price target on Taysha Gene Therapies, Inc. (NASDAQ:TSHA) from $6 to $8 and kept a Market Outperform rating.
Citizens noted the finalization of the company’s REVEAL pivotal trial for Rett syndrome treatment. The research firm said that the protocol is “the best approach in Rett,” giving Taysha Gene Therapies, Inc. (NASDAQ:TSHA) a huge competitive advantage.
According to Citizens’ analysis, the company has finalized its pivotal protocol and statistical analysis plan. Taysha Gene Therapies, Inc. (NASDAQ:TSHA) now plans to start the trial in Q4 2025. The company has followed new draft guidelines from the FDA.
Citizens noted that continuity in communication with the FDA despite changes in agency leadership should help reduce regulatory risks for Taysha Gene Therapies, Inc.’s (NASDAQ:TSHA) development program. The research firm raised its probability of success estimate for the company’s Rett Syndrome program from 33% to 55%.
Taysha Gene Therapies, Inc. (NASDAQ:TSHA) is a clinical-stage biotechnology company. It focuses on developing adeno-associated virus (AAV)-based gene therapies to treat serious monogenic diseases of the central nervous system.
4. Hudson Pacific Properties, Inc. (NYSE:HPP)
Share Price: $2.22
Number of Hedge Fund Holders: 34
Hudson Pacific Properties, Inc. (NYSE:HPP) is one of the best American penny stocks to buy right now. On October 15, Wells Fargo lowered its price target on Hudson Pacific Properties, Inc. (NYSE:HPP) from $5 to $3.1 and maintained a Buy rating.
Earlier, on October 1, Cantor Fitzgerald initiated coverage on Hudson Pacific Properties, Inc. (NYSE:HPP) with an Overweight rating and a 43.50 price target. The research firm noted that the company is facing significant challenges, such as vacancies and content providers moving production away from Los Angeles. Cantor Fitzgerald noted that these challenges are creating a “perfect storm” for Hudson Pacific Properties, Inc. (NYSE:HPP).
However, the firm also noted that Hudson Pacific Properties, Inc. (NYSE:HPP) completed a timely equity transaction in June 2025, which gave it more financial flexibility. Cantor Fitzgerald is optimistic about the company’s prospects for 2026. The firm believes there will be stronger incentives to keep studio production in Los Angeles and the ongoing AI revolution was also mentioned as an opportunity.
Hudson Pacific Properties, Inc. (NYSE:HPP) is a real estate investment trust (REIT) that acquires, owns, operates, and develops office spaces and media or entertainment properties.
3. Nuvation Bio Inc. (NYSE:NUVB)
Share Price: $4.98
Number of Hedge Fund Holders: 36
Nuvation Bio Inc. (NYSE:NUVB) is one of the best American penny stocks to buy right now. On November 4, Citizens increased its price target on Nuvation Bio Inc. (NYSE:NUVB) from $6 to $8 and kept its Market Outperform rating.
This decision came after the company reported Q3 results. Citizens highlighted that Nuvation Bio Inc. (NYSE:NUVB) successfully started 204 patients on IBTROZI (taletrectinib) in the third quarter of 2025. This launch is exceeding expectations and outpacing other recent ROS1 inhibitor launches.
IBTROZI (taletrectinib) is Nuvation Bio Inc.’s (NYSE:NUVB) next-generation inhibitor for ROS1-positive non-small cell lung cancer. Updated data has demonstrated that IBTROZI (taletrectinib) is continuing to show unprecedented durability.
Because of IBTROZI’s (taletrectinib) impressive performance, Citizens has raised its short-term forecasts for Nuvation Bio Inc. (NYSE:NUVB).
Nuvation Bio Inc. (NYSE:NUVB) is a biopharmaceutical company focused on developing oncology therapeutics.
2. Under Armour, Inc. (NYSE:UA)
Share Price: $4.34
Number of Hedge Fund Holders: 37
Under Armour, Inc. (NYSE:UA) is one of the best American penny stocks to buy right now. On October 14, BTIG initiated coverage on Under Armour, Inc. (NYSE:UA) with a Neutral rating, citing better business discipline and diligence under CEO Kevin Plank compared to past years.
BTIG also noted Under Armour, Inc. (NYSE:UA) is making efforts to build a healthier business as it focuses more on product improvement and more targeted marketing initiatives. The firm’s analysis suggests Under Armour, Inc.’s (NYSE:UA) current strategy is prioritising quality, not quantity.
Previously, on September 29, UBS reiterated its Buy rating with a price target of $7.50 on Under Armour, Inc. (NYSE:UA), citing confidence that the company will better leverage its brand assets in the future than it has in recent years.
UBS also noted that tariffs will likely hurt the company’s sales and margins in fiscal year 2026. However, the research firm expects to see a “strong FY27 turnaround” for Under Armour, Inc. (NYSE:UA) as it navigates temporary headwinds.
Under Armour, Inc. (NYSE:UA) is an American sportswear company that designs, markets, and distributes branded athletic performance apparel, footwear, and accessories.
1. Aurora Innovation, Inc. (NASDAQ:AUR)
Share Price: $4.23
Number of Hedge Fund Holders: 41
Aurora Innovation, Inc. (NASDAQ:AUR) is one of the best American penny stocks to buy right now. On October 29, Needham reaffirmed its Buy rating on Aurora Innovation, Inc. (NASDAQ:AUR) with a $13 price target.
This update from Needham is because of several positive signs about the company’s future.
Aurora Innovation, Inc. (NASDAQ:AUR) has outlined a clear plan for its goals in 2026 and 2027, focusing especially on autonomous operations. The company has updated its timeline for driverless autonomous operations, which positions it to meet the demand from the logistics market.
Additionally, Aurora Innovation, Inc. (NASDAQ:AUR) is making impressive progress by reaching important milestones, which includes surpassing 100,000 driverless miles on public roads. The company plans to deploy hundreds of driverless trucks with its next-generation Aurora Driver hardware in 2026.
The company is focused on expansion, adding a new driverless route from Fort Worth to El Paso. Aurora Innovation, Inc. (NASDAQ:AUR) is also making efforts to validate driverless operations in rain and heavy wind, which the company aims to include in its software release planned for January 2026.
On October 29, Oppenheimer analyst Colin Rusch also kept a Buy rating on Aurora Innovation, Inc. (NASDAQ:AUR) with a price target of $15.
Aurora Innovation, Inc. (NASDAQ:AUR) is a self-driving technology company. The Aurora Driver is a self-driving system that can operate various types of vehicles, including freight-hauling trucks and ride-hailing passenger vehicles.
While we acknowledge the potential of AUR 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 AUR and that has a 100x upside potential, check out our report about this cheapest AI stock.
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