In this piece, we will discuss the 12 hot penny stocks to invest in right now.
Amid an uncertain macro environment, where the economic outlook is blurry, the momentum of penny stocks depends heavily on shifting market psychology rather than macro certainty.
Goldman Sachs Asset Management portfolio manager Greg Tuorto appeared on CNBC on November 17, 2025. Despite the uncertainty around the timing of rate cuts, he noted that small-cap stocks are quietly building their own momentum. The small-cap segment is attracting renewed attention following strong third-quarter earnings from smaller companies, making it more appealing than large caps.
Furthermore, he highlighted several catalysts that he said are driving investor interest in early-stage small-cap stocks. These catalysts include heightened strategic M&A activity, renewed activity in biotech, an improving IPO environment, and new opportunities in semiconductor, defense, and energy-infrastructure stocks linked to the expanding AI ecosystem. He believes these factors are highly relevant to investors looking at small-cap stocks because those small-cap companies would be ones to see significant upside from sector-specific upswings, especially in AI-linked industries.
Meanwhile, the Russell 2000 index is up 21.60% over the past six months. However, in the last week, the index fell for a fourth straight week. This marks its longest run of weekly losses since March.
With Tuorto emphasizing the market is “broadening out,” let’s quickly look at our list of 12 hot penny stocks to buy.
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Our Methodology
To curate our list of the 12 hot penny stocks to invest in right now, we relied on the financial media sources, ETFs, and stock screeners to compile a list of penny stocks (share price under $5) with the last three month share price returns of over 50% and an upside potential of over 20% as of November 24, 2025. Next, we selected the top 12 stocks with the highest potential upside and ranked them in ascending order. We also considered hedge fund sentiment toward these stocks using Insider Monkey’s hedge fund database, which tracks 983 hedge funds as of Q2 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).
12 Hot Penny Stocks to Invest in Right Now
12. Shattuck Labs, Inc. (NASDAQ:STTK)
3-Month Performance as of November 25: 102.21%
Average Upside Potential as of November 24: 45.63%
Number of Hedge Fund Holders: 13
With strong three-month performance and significant upside potential, Shattuck Labs, Inc. (NASDAQ:STTK) secures a spot on our list of the 12 hot penny stocks to invest in right now.
Highlighting the SL-325’s Phase 1 readout, expected in Q2 2026, H.C. Wainwright’s Joseph Pantginis reiterated a “Hold” rating on Shattuck Labs, Inc. (NASDAQ:STTK) on November 7, 2025. The analyst believes the drug holds significant clinical potential, boosting the analyst’s confidence. The drug remains a key growth catalyst, with DR3-based bispecific antibodies expected to provide longer-term upside. Pantginis also cited the company’s solid financial position as visible through its cash and investments balance of $86.10 million. Thus, the analyst sees a balanced risk profile for the company, with SL-325 remaining central to the investment case.
Meanwhile, Shattuck Labs, Inc. (NASDAQ:STTK) announced its third-quarter 2025 results on November 6, 2025. The company, still in its development stage, noted R&D declining to $7.60 million, while G&A expenses totaled $4.10 million. Reflecting disciplined execution, Shattuck Labs reaffirmed advancement of the Phase 1 SL-325 trial. It also reported continued progress toward selecting a bispecific candidate in 2026. With a healthy cash balance, the company looks well-positioned to advance the drug into Phase 2 trials. Net loss for the quarter was $10.1 million, or $0.14 per basic and diluted share.
Shattuck Labs, Inc. (NASDAQ:STTK) focuses on developing novel therapies for autoimmune and inflammatory diseases. Its SL-325 drug aims for a complete blockade of the validated DR3/TL1A pathway.
11. Erasca, Inc. (NASDAQ:ERAS)
3-Month Performance as of November 25: 93.08%
Average Upside Potential as of November 24: 73.01%
Number of Hedge Fund Holders: 25
Erasca, Inc. (NASDAQ:ERAS) is one of the 12 hot penny stocks to invest in right now.
On November 14, 2025, Erasca, Inc. (NASDAQ:ERAS) saw Guggenheim’s analyst Michael Schmidt reiterate a “Buy” rating with a $5 price target, following the company’s Q3 2025 results. The analyst highlighted key drivers, including recent Phase 1 trial initiations, additional validation from peer programs, and growing investor anticipation ahead of the first clinical data disclosures in 2025.
A day earlier, on November 12, 2025, Erasca, Inc. (NASDAQ:ERAS) reported its third-quarter 2025 results, posting a net loss of $30.6 million, or $0.11 per share. The company closed the quarter with a solid cash position of $362.4 million, providing a runway into 2028. The company noted a decline in R&D expenses due to a reduction in costs related to clinical trials, preclinical studies, and discovery activities.
Erasca, Inc. (NASDAQ:ERAS) has attracted greater analyst confidence with its progress across multiple programs, including the recent U.S. patent issuance for ERAS-0015 and the ongoing development of ERAS-4001. Positioned as a potential best-in-class therapy, the two developments reflect the company’s strengthening intellectual property portfolio and reinforce expectations around upcoming 2026 Phase 1 monotherapy readouts.
Looking ahead, Erasca, Inc. (NASDAQ:ERAS)’s management remains confident in its long-term growth, thanks to the pending clinical milestones, strengthened scientific leadership, and a robust patent estate.
Erasca, Inc. (NASDAQ:ERAS), a clinical-stage precision oncology company, develops therapies targeting the RAS/MAPK pathway.
10. CytomX Therapeutics, Inc. (NASDAQ:CTMX)
3-Month Performance as of November 25: 107.50%
Average Upside Potential as of November 24: 78.09%
Number of Hedge Fund Holders: 21
With strong three-month performance and significant upside potential, CytomX Therapeutics, Inc. (NASDAQ:CTMX) secures a spot on our list of the 12 hot penny stocks to invest in right now.
The Fly reported on November 11, 2025, that CytomX Therapeutics, Inc. (NASDAQ:CTMX)’s price target was raised from $5 to $10 by H.C. Wainwright’s Mitchell Kapoor. Reiterating a “Buy” rating, the analyst highlighted strong demand for the CX-2051 Phase 1 program. With Phase 1 study enrollment projected to reach approximately 100 patients by Q1 2026, the program’s data package is expected to strengthen, supporting a potential approval pathway.
Meanwhile, CytomX Therapeutics, Inc. (NASDAQ:CTMX) reported its Q3 2025 results on November 6, 2025. The quarter saw a reduction in revenue to $6 million from $33.4 million in Q3 2024. The revenue decline reflected the completion of certain collaboration obligations. However, operating expenses, which fell to $21.7 million, reflected the company’s continued operating discipline.
The quarter also marked significant pipeline progress, including a robust CX-2051 Phase 1 expansion and preparations for a data update in Q1 2026. Management expressed confidence while emphasizing ongoing CX-801 development, including upcoming biomarker data at SITC 2025 Annual Meeting and continued dose escalation in combination with KEYTRUDA. CytomX Therapeutics, Inc. (NASDAQ:CTMX) closed the quarter with $143.6 million in cash balances, supporting operations until Q2 2027.
CytomX Therapeutics, Inc. (NASDAQ:CTMX), an oncology-focused biopharmaceutical company, develops conditionally activated, tumor-localized biologics using its PROBODY platform.
