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.
Image: Depositphotos
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.
9. Gain Therapeutics, Inc. (NASDAQ:GANX)
3-Month Performance as of November 25: 58.70%
Average Upside Potential as of November 24: 140.28%
Number of Hedge Fund Holders: 6
Gain Therapeutics, Inc. (NASDAQ:GANX) is one of the 12 hot penny stocks to invest in right now.
At the Society for Neuroscience annual meeting in San Diego on November 20, Gain Therapeutics, Inc. (NASDAQ:GANX) unveiled new preclinical data on its lead drug candidate, GT-02287.
GT-02287, a small molecule, focuses on treating Parkinson’s disease (PD) by restoring the function of glucocerebrosidase (GCase). GCase is an enzyme impaired in PD due to GBA1 mutations. Lysosomes and mitochondria, which are critical areas affected in PD, are targeted by the drug.
The drug’s ability to reduce mitochondrial stress and promote neuronal survival was highlighted in the new data through three separate preclinical models. Within a mouse model of PD, GT-02287 improved mitochondrial function, while in patient-derived cells, it enhanced mitochondrial function and GCase levels.
With these findings, Gain Therapeutics, Inc. (NASDAQ:GANX) demonstrated further evidence of the drug’s potential as a disease-modifying therapy for PD. The company also highlighted the possibility of slowing or stopping disease progression. Management remains confident that these preclinical results will translate into significant clinical benefits for patients.
Earlier, BTIG’s analyst Thomas Shrader expressed optimism about the drug’s progress so far and its potential to draw interest from potential partners. This confidence was evident in the analyst’s November 13 reiteration of a “Buy” rating on Gain Therapeutics, Inc. (NASDAQ:GANX).
Gain Therapeutics, Inc. (NASDAQ:GANX), a clinical-stage biotechnology company, focuses on developing therapies for Parkinson’s disease, neurodegenerative diseases, and other rare disorders.
8. Compass Therapeutics, Inc. (NASDAQ:CMPX)
3-Month Performance as of November 25: 65.89%
Average Upside Potential as of November 24: 157.17%
Number of Hedge Fund Holders: 15
With strong three-month performance and significant upside potential, Compass Therapeutics, Inc. (NASDAQ:CMPX) secures a spot on our list of the 12 hot penny stocks to invest in right now.
On November 10, 2025, H.C. Wainwright’s Joseph Pantginis reiterated a “Buy” rating on Compass Therapeutics, Inc. (NASDAQ:CMPX) with a $24 price target. The company’s advancing pipeline, marked by the preclinical progress of CTX-10726, gained the analyst’s confidence, who was particularly impressed with the bispecific antibody’s substantial potential. At SITC 2025, the drug demonstrated high-affinity target engagement and robust anti-tumor activity. The analyst also cited the molecule’s competitive edge over agents such as ivonescimab and bevacizumab, reinforcing optimism as its planned Phase 1 trial in 2026 comes closer.
Meanwhile, Compass Therapeutics, Inc. (NASDAQ:CMPX) reported Q3 2025 results on November 5. The cash balance reached $220 million by the end of Q3, which will support operations through 2028. G&A expenses recorded a substantial increase, growing from $8.6 million in Q3 2024 to $12.8 million. Management also reiterated its expectations to deliver overall survival (OS) and progression-free survival (PFS) data for tovecimig in late Q1 2026. This could potentially support the company’s first BLA filing in the second half of 2026. At the same time, Compass reported encouraging results in the Phase 1 study of CTX-8371. The company recorded a net loss of $14.3 million, or $0.08 per share, for the quarter.
Compass Therapeutics, Inc. (NASDAQ:CMPX), a clinical-stage oncology company, develops antibody-based therapies targeting angiogenesis, immune activation, and tumor evasion pathways.
7. Veritone, Inc. (NASDAQ:VERI)
3-Month Performance as of November 25: 79.57%
Average Upside Potential as of November 24: 165.40%
Number of Hedge Fund Holders: 4
Veritone, Inc. (NASDAQ:VERI) is one of the 12 hot penny stocks to invest in right now.
On November 13, 2025, Veritone, Inc. (NASDAQ:VERI) announced a significant financial restructuring, successfully closing a transaction with its lenders to repay approximately $77.5 million in debt. This includes the full repayment of its $31.8 million senior secured credit facility and 50% of its $45.7 million convertible notes.
This move reduced the company’s annual debt costs by roughly $13 million and freed up $15 million in previously restricted cash. CEO Ryan Steelberg emphasized the cleaner capital structure, which will better position Veritone, Inc. (NASDAQ:VERI) to capitalize on growing demand for its AI-powered solutions.
Previously, on November 6, 2025, Veritone Inc. (NASDAQ:VERI) announced its results for the third quarter. The company’s revenue grew 32% to $29.1 million, thanks to robust growth in its Software Products & Services segment. Growth was particularly significant in its VDR solution, offsetting declines in its Managed Services segment.
The quarter also saw a stabilization of gross profit margins, improving the company’s financial health. Despite operating losses, the company’s strong revenue growth and strategic debt reduction are expected to improve its future profitability. Veritone, Inc. (NASDAQ:VERI) reported $5.8 million in non-GAAP net loss, an improvement over an $11.1 million loss in Q3 2024.
Veritone, Inc. (NASDAQ:VERI) focuses on building human-centered AI solutions, enhancing efficiency, profitability, and decision-making capabilities of customers in media, entertainment, public sector, and talent acquisition.
6. Bitfarms Ltd. (NASDAQ:BITF)
3-Month Performance as of November 25: 123.39%
Average Upside Potential as of November 24: 165.40%
Number of Hedge Fund Holders: 10
With strong three-month performance and significant upside potential, Bitfarms Ltd. (NASDAQ:BITF) secures a spot on our list of the 12 hot penny stocks to invest in right now.
On November 14, 2025, The Fly reported that Bitfarms Ltd. (NASDAQ:BITF) saw Cantor Fitzgerald raise its price target from $2.20 to $5.00, while reiterating an “Overweight” rating. The investment firm cited the company’s Q3 2025 results, which it believes were encouraging, despite the impact of the discontinuation of part of its business.
Meanwhile, on the previous day, Bitfarms Ltd. (NASDAQ:BITF) reported its Q3 2025 results. The quarter marked a 156% year-over-year increase in revenue to $69 million, driven by strong growth in its energy infrastructure and mining operations. Adjusted EBITDA rose from $2 million in Q3 2024 to $20 million. However, the quarter saw a net loss of $46 million due to an impairment charge.
During the quarter, Bitfarms Ltd. (NASDAQ:BITF) discontinued the Argentina and Paraguay operations, strategically shifting its focus to North American HPC/AI infrastructure projects. For Q3, the discontinued operations reported a total revenue of $14 million and a net loss of $35 million. The net loss included an impairment charge of $34 million due to the reclassification of assets from the Paraguay operations.
In the third quarter, Bitfarms Ltd. (NASDAQ:BITF) finalized a $588 million convertible note offering, enhancing liquidity to $814 million as of November 12, 2025. Looking ahead, the company appears to be well-positioned to expand into high-performance computing (HPC) and AI infrastructure.
Bitfarms Ltd. (NASDAQ:BITF), a leading North American energy and digital infrastructure company, specializes in high-performance computing and Bitcoin mining.
5. Orchestra BioMed Holdings, Inc. (NASDAQ:OBIO)
3-Month Performance as of November 25: 105.77%
Average Upside Potential as of November 24: 175.41%
Number of Hedge Fund Holders: 12
With strong three-month performance and significant upside potential, Orchestra BioMed Holdings, Inc. (NASDAQ:OBIO) secures a spot on our list of the 12 hot penny stocks to invest in right now.
On November 12, 2025, The Fly reported that Barclays reduced its price target on Orchestra BioMed Holdings, Inc. (NASDAQ:OBIO) from $12 to $11, while maintaining an “Overweight” rating. While adjusting short-term valuation assumptions, the investment firm cited the company’s clinical and strategic achievements outlined in its Q3 earnings report.
Earlier, on November 10, 2025, Orchestra BioMed Holdings, Inc. (NASDAQ:OBIO) reported its results for the third quarter of 2025. The company reported a net loss of $20.8 million, or $0.40 per share, for the quarter, up from the $15.4 million loss in Q3 2024. The quarter saw R&D expenses increasing to $14 million due to the ongoing BACKBEAT pivotal study.
During the quarter, Orchestra BioMed Holdings, Inc. (NASDAQ:OBIO) raised $147.6 million through strategic transactions and equity offerings, providing a cash runway into Q4 2027 and supporting critical trials for Atrioventricular Interval Modulation (AVIM) therapy and Virtue SAB. The company recorded strong momentum in the Virtue SAB pivotal trial, which is expected to reach full enrollment in mid-2027. Meanwhile, enrollment completion for BACKBEAT is targeted for mid-2026.
Orchestra BioMed Holdings, Inc. (NASDAQ:OBIO) is focused on advancing AVIM therapy and Virtue SAB in pivotal trials targeting hypertension and coronary artery disease.
4. Annexon, Inc. (NASDAQ:ANNX)
3-Month Performance as of November 25: 106.51%
Average Upside Potential as of November 24: 210.42%
Number of Hedge Fund Holders: 25
Annexon, Inc. (NASDAQ:ANNX) is one of the 12 hot penny stocks to invest in right now.
On November 19, 2025, The Fly reported that Wells Fargo increased its price target on Annexon, Inc. (NASDAQ:ANNX) from $14 to $27, while reiterating an “Overweight” rating. The investment firm’s price revision reflects its increased probability of success in the second half of 2026 for vonaprument’s Phase 3 trial in GA to 55% from 10%. The firm believes the program offers a significant, asymmetric risk-reward skew with massive upside in the next 12 months.
Meanwhile, Annexon, Inc. (NASDAQ:ANNX) reported Q3 2025 results on November 10. Posting $54.9 million, or $0.37 per share, in net loss for the quarter, the company’s R&D expenses increased to $49.7 million due to advancement of vonaprument’s Phase 3 ARCHER II trial and global filings for tanruprubart in GBS. On the other hand, G&A expenses decreased, thanks to the company’s operational efficiencies.
Annexon, Inc. (NASDAQ:ANNX) closed the quarter with $188.7 million in cash, providing a runway into early 2027. The company’s neuroinflammation platform also noted progress, with EU Marketing Authorization Application (MAA) submission for tanruprubart in January 2026 and topline ARCHER II data for vonaprument expected in the second half of 2026.
Annexon, Inc. (NASDAQ:ANNX) is focused on developing innovative complement inhibitors targeting neuroinflammation across autoimmunity, neurodegeneration, and ophthalmology.
3. Opus Genetics, Inc. (NASDAQ:IRD)
3-Month Performance as of November 25: 72.17%
Average Upside Potential as of November 24: 285.50%
Number of Hedge Fund Holders: 6
Opus Genetics, Inc. (NASDAQ:IRD) is one of the 12 hot penny stocks to invest in right now.
On November 25, 2025, The Fly reported that Piper Sandler initiated coverage of Opus Genetics, Inc. (NASDAQ:IRD) with an “Overweight” rating and a $7 price target. The investment firm highlighted OPGx-LCA5, the company’s lead gene therapy program. The program aims to treat Leber congenital amaurosis type 5 (LCA5), a condition that currently has no available treatment options. At the same time, the company’s second program, OPGx-BEST1, which targets BEST1-related inherited retinal diseases, also boasts encouraging preclinical data, boosting the investment firm’s confidence.
Earlier, on November 12, Opus Genetics, Inc. (NASDAQ:IRD) reported Q3 2025 results. The quarter saw its net loss widen to $17.5 million from $7.5 million in the prior-year quarter. This was driven by changes in the fair value of warrants. Furthermore, the company noted significant progress in its gene therapy pipeline, including positive Phase 1/2 data for OPGx-LCA5, which showed significant improvements in vision for pediatric patients.
During the quarter, the company also reported the successful completion of a Type B Regenerative Medicine Advanced Therapy (RMAT) meeting with the U.S. Food and Drug Administration (FDA). The management believes this completion will enhance the potential for an accelerated regulatory pathway to OPGx-LCA5 approval. Opus Genetics, Inc. (NASDAQ:IRD) also completed a $23 million equity offering, expected to provide financial support for advancing the company’s clinical trials, including the ongoing Phase ½ trial for OPGx-BEST1.
Opus Genetics, Inc. (NASDAQ:IRD) is focused on the development of gene therapies to restore vision in patients with inherited retinal diseases.
2. Zura Bio Limited (NASDAQ:ZURA)
3-Month Performance as of November 25: 82.93%
Average Upside Potential as of November 24: 317.11%
Number of Hedge Fund Holders: 14
With strong three-month performance and significant upside potential, Zura Bio Limited (NASDAQ:ZURA) secures a spot on our list of the 12 hot penny stocks to invest in right now.
On November 13, 2025, Guggenheim reiterated its “Buy” rating on Zura Bio Limited (NASDAQ:ZURA) with a $15 price target.
The reaffirmed outlook came as Zura Bio Limited (NASDAQ:ZURA) reported its results for Q3 2025 on the same day. The company closed the quarter with $139 million in cash, which management assumes is sufficient to fund operations into 2027. The quarter saw increased R&D expenses of $11.9 million due to the progression of the tibulizumab Phase 2 clinical trial. Meanwhile, G&A expenses declined to $7.6 million, driven by lower share-based compensation. The quarter marked a net loss of $20 million, or $0.21 per share, compared with the prior year’s loss of $22.9 million, or $0.26 per share.
Zura Bio Limited (NASDAQ:ZURA)’s management emphasized the ongoing execution across its two Phase 2 tibulizumab studies, TibuSHIELD in hidradenitis suppurativa and TibuSURE in systemic sclerosis. TibuSHIELD remains on track for topline data in Q3 2026, and TibuSURE’s data is expected in Q4 2026. Looking ahead, management remains focused on patient enrollment and on navigating competitive trial recruitment dynamics.
Zura Bio Limited (NASDAQ:ZURA) is a clinical-stage immunology company that develops dual-pathway antibodies for autoimmune and inflammatory diseases.
1. Acrivon Therapeutics, Inc. (NASDAQ:ACRV)
3-Month Performance as of November 25: 74.44%
Average Upside Potential as of November 24: 373.31%
Number of Hedge Fund Holders: 9
With strong three-month performance and significant upside potential, Acrivon Therapeutics, Inc. (NASDAQ:ACRV) secures a spot on our list of the 12 hot penny stocks to invest in right now.
On November 25, 2025, Acrivon Therapeutics, Inc. (NASDAQ:ACRV) saw H.C. Wainwright’s Emily Bodnar initiate coverage with a “Buy” rating and a $19 price target. The analyst’s bullish rating reflected the company’s strong outlook driven by robust developments in its pipeline, especially the ACR-368 Phase 2b trial. With the inclusion of a third cohort, enrollment and overall response rate are expected to increase, particularly among patients who are less heavily pretreated. Furthermore, this cohort, which does not require a pretreatment biopsy, along with the use of ultra-low-dose gemcitabine, is expected to broaden access to treatment, thereby improving the company’s market positioning.
Meanwhile, on November 13, Acrivon Therapeutics, Inc. (NASDAQ:ACRV) announced its Q3 2025 results, where it reported a net loss of $18.2 million, an improvement compared to $22.4 million a year earlier. The company’s strategic focus on endometrial cancer was evident from its R&D expenses, which fell from $18.9 million a year ago to $13.6 million. Moreover, the company closed the quarter with $134.4 million in cash reserves, which will likely fund operations into Q2 2027. The quarter also marked the continued advancement of the ACR-368 trial for endometrial cancer, while progressing the ACR-2316 Phase 1 trial, which showed early signs of clinical activity and tumor shrinkage.
Acrivon Therapeutics, Inc. (NASDAQ:ACRV), a clinical-stage biopharmaceutical company, develops precision medicines using its Generative Phosphoproteomics AP3 platform to design targeted treatments.
While we acknowledge the potential of ACRV to grow, 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 ACRV and that has 100x upside potential, check out our report about this cheapest AI stock.
READ NEXT: Bill Gates’s Stock Portfolio: Top 15 Stock Picks and 10 Best Non-Tech Stocks to Buy According to Reddit.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email below.
