Earlier on January 8, Royce Investment Partners co-chief investment officer Francis Gannon appeared on Yahoo Finance’s ‘Market Domination Overtime’ to suggest that it is time for investors to get on board with small-cap stocks. Gannon noted that the Russell 2000 had then gained over 3% so far in 2026. He believes that a leadership shift is occurring, with small caps outperforming the S&P 500 by about 400 basis points since April of the previous year. This shift was driven by the end of a two-year earnings recession for small-cap companies. Gannon described valuations as exciting and noted that they are at 25-year lows relative to large caps, which presents a significant long-term opportunity.
Regarding interest rates, Gannon explained that 40% of the debt in the Russell 2000 is variable, meaning previous Fed hikes have already been baked in. While he watches the 10-year Treasury yield, specifically the 4.5% level, he believes that the powerful earnings story for small caps will likely overshadow rate concerns this year. He also anticipates that the Trump administration’s focus on deregulation and reindustrialization will disproportionately benefit small-cap companies, particularly those in the emerging market of the American Midwest.
That being said, we’re here with a list of the 13 best penny stocks under $1 to buy right now.
Our Methodology
We used screeners to identify stocks that are trading below $1 per share, and limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among analysts and elite hedge funds.
Note: All data was sourced on February 24.
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).
13 Best Penny Stocks Under $1 to Buy Right Now
13. X3 Holdings Co. Ltd. (NASDAQ:XTKG)
X3 Holdings Co. Ltd. (NASDAQ:XTKG) is one of the best penny stocks under $1 to buy right now. On February 24, X3 Holdings officially entered the AI healthcare sector by securing a partnership to manage the global operations of an AI-powered healthcare smartwatch. This collaboration tasking X3 Holdings with the international commercialization and operational deployment of the device aims to transition healthcare from passive treatment to proactive management.
The smartwatch functions as a neuro-digital health tool designed to monitor and regulate emotional and neurological balance, supporting long-term physiological stability through continuous, adaptive intervention. The technology behind the wearable integrates a non-invasive brainwave sensing chip with digital frequency modulation to target 27 functional brain-related points. Using a health data platform built on 7 million user records and 25,000 physiological indicators, the device processes real-time signals through cloud-based AI analytics to create a closed-loop system of monitoring and adjustment.
Clinical validation has shown high effectiveness in neurological and behavioral applications, providing a pharmaceutical-free and non-invasive method for managing cognitive support, emotional health, and chronic discomfort. X3 Holdings Co. Ltd. (NASDAQ:XTKG) expects to generate revenue from its first service contract under this agreement starting in March 2026.
X3 Holdings Co. Ltd. (NASDAQ:XTKG), through its subsidiaries, provides software applications and technology services to corporate and government customers in the People’s Republic of China.
12. Wheels Up Experience Inc. (NYSE:UP)
Wheels Up Experience Inc. (NYSE:UP) is one of the best penny stocks under $1 to buy right now. On February 19, Wheels Up Experience reported earnings for Q4 2025, achieving its first-ever positive Adjusted EBITDAR of $37 million and a 67% year-over-year improvement in net loss. While total revenue remained flat sequentially at $184 million, the company benefited from a stronger mix of profitable membership flying and the early results of a $70 million cost-reduction initiative.
The quarter was further supported by a sale-leaseback transaction involving ten aircraft, which generated $30 million in net cash proceeds to support future fleet acquisitions. Operational performance reached record levels during the period, with a 99% completion rate and 91% on-time performance. The company is also accelerating its fleet transformation, with premium Phenom and Challenger jets now making up 40% of its controlled fleet.
To enhance the passenger experience, Wheels Up Experience Inc. (NYSE:UP) has begun installing high-speed satellite Wi-Fi across these aircraft, with nearly full fleet coverage expected by the end of 2026. Commercial momentum is being driven by the new Signature Membership program and a deepening partnership with Delta Air Lines, which contributed to a 35% year-over-year growth in corporate membership sales.
Wheels Up Experience Inc. (NYSE:UP) provides private aviation services in the US and internationally. The company offers the Wheels Up Membership program that consists of two primary membership categories, and UP for Business membership for small and medium enterprises.
