In this article, we will discuss the 12 Best NASDAQ Penny Stocks to Buy According to Analysts.
Big technology stocks are no longer leading the stock market higher, and a rotation away from large caps is gaining momentum instead. That’s evident as the Nasdaq 100 index is down by about 0.5% year to date. At the same time, small-cap and penny stocks are on the move. The Russell 2000 index is rallying by about 5% year to date. This underscores the renewed investor interest in small-cap companies.
“Not only is skew increasing at the SPX index as more investors seek portfolio hedges, but more downside risk is also priced in at the single-stock level, especially for mega-cap tech,” said Mandy Xu, head of derivatives market intelligence at Cboe Global Markets Inc. “Retail traders have grown more cautious on tech. Call buying has dropped sharply to levels last seen during the 2022 bear market.”
This rotation from large caps became particularly pronounced in February. During that month, the Nasdaq 100 fell by more than 4%. These declines were primarily driven by significant losses in large-cap tech stocks. One factor behind this sell-off was concern that AI could disrupt established industries. This set the stage for further developments in the months that followed.
Building on these developments, growing concerns about valuations, after two years of blockbuster gains fueled by artificial intelligence, are one factor behind the ongoing rotation. In addition to valuation worries, the US Federal Reserve embarking on a monetary easing spree acts as another catalyst, providing support to penny stocks and small caps. As a result, market dynamics have continued to shift in favor of smaller companies.
In addition to these market forces, valuation has become a key consideration as the fast-moving conflict across the Middle East heightens investor anxiety and strengthens the case for safe-haven trades. According to John Briggs, head of US rates strategy at Natixis, traders are likely to adopt the strategy of “haven first, ask questions later.”
While the main focus will be on treasuries, gold, and the Swiss franc, it is important to note that Nasdaq penny stocks trading at highly discounted valuations are also likely to elicit interest amid the continued rotation from large caps.
On the other hand, providing a more cautious perspective within this shifting environment, strategists at Barclays have warned against quickly buying the dip. “The risk-reward doesn’t seem compelling,” he said. “If equities pull back enough (say over 10% in the S&P 500), there is likely to come a time to buy. But not yet.”
With that background in mind, let’s take a closer look at the 12 best NASDAQ penny stocks to buy according to analysts.
Our Methodology
To compile a list of 12 Best NASDAQ penny stocks to buy according to analysts, we used screeners to identify stocks trading at or under $5. We picked out stocks with an upside potential of more than 50%. Next, we narrowed the list to companies that are owned by hedge funds and have recently shared important updates that could affect investor sentiment. These stocks are also widely followed and favored by analysts and top hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research shows 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).
Best NASDAQ Penny Stocks to Buy According to Analysts
12. ThredUp Inc. (NASDAQ:TDUP)
ThredUp Inc. (NASDAQ:TDUP) is among the best NASDAQ penny stocks to buy according to analysts. On March 2, ThredUp Inc. (NASDAQ:TDUP) reported its financial results for Q4 and full year 2025. CEO James Reinhart highlighted the strength of ThredUp’s marketplace model and said the company is focused on profitable growth in 2026 through buyer expansion, quality supply, and AI-driven innovation.
In Q4 2025, revenue rose 18% year-over-year to $79.7 million, with gross profit of $63.4 million and a narrower loss of $5.6 million. Active buyers grew 30% to 1.65 million, while orders increased 27% to 1.56 million. For the full year, revenue reached $310.8 million, up 20%, with losses reduced to $20.2 million from $40 million in 2024. Adjusted EBITDA improved to $13.5 million, and orders rose 25% to 6.08 million.
Looking ahead, ThredUp expects Q1 2026 revenue of $79.5–$80.5 million and full-year 2026 revenue of $349–$355 million, with gross margins around 78–79% and adjusted EBITDA margins near 6%. The company sees strong momentum as it continues to scale its resale platform and drive innovation.
ThredUp Inc. (NASDAQ:TDUP), founded in 2009 and based in Oakland, California, runs an online resale platform in the U.S. where consumers can buy and sell secondhand apparel, shoes, and accessories.
11. HIVE Digital Technologies Ltd. (NASDAQ:HIVE)
HIVE Digital Technologies Ltd. (NASDAQ:HIVE) is among the best NASDAQ penny stocks to buy according to analysts. On February 23, Cantor Fitzgerald cut its price target for HIVE Digital Technologies Ltd. (NASDAQ:HIVE) from $7.50 to $5.00 but kept an Overweight rating.
The firm said Bitcoin mining is making less money now and expects lower Bitcoin prices. Hive reported strong growth, with quarterly revenue of $93.1 million, up 219% from last year. It mined 885 Bitcoin in the quarter and increased its mining power to 25 exahashes per second. Even so, the company is still not profitable and posted a loss over the past year. Hive plans to grow its mining power to 35 exahashes per second by the end of 2026 and is also expanding into AI and high-performance computing, aiming to reach $225 million in annual AI revenue by 2027.
Earlier, on February 18, Rosenblatt lowered its price target on Hive from $6.50 to $4.50 but kept a Buy rating. The firm said Hive’s expansion in Paraguay has improved its mining costs, helping it handle lower Bitcoin prices. With Bitcoin trading below $70,000, Rosenblatt noted that Hive Digital’s lower hash costs and larger scale should help it weather the tougher market while keeping flexibility to grow its high‑performance computing business.
HIVE Digital Technologies Ltd. (NASDAQ:HIVE) builds and operates green‑energy data centers in Bermuda and Paraguay. The company mines and sells digital currencies, offers performance computing hosting, and provides blockchain infrastructure solutions by supplying computational power to distributed networks.
