In this article, we will take a look at some of the best penny stocks listed on the New York Stock Exchange that are currently being highly favored by hedge funds.
On July 3, Reuters reported that global stocks were on course for their strongest weekly performance in over two months after the release of a weaker-than-expected U.S. employment report.
As the week concluded on Friday, the STOXX 600 index in Europe touched yet another record high. With a 2.6% jump, it registered its strongest weekly performance since mid-May. Across the Asian side, Tokyo’s Nikkei was up by 1.5%, and South Korea’s volatile KOSPI index increased by roughly 6%.
U.S. employment growth slowed sharply in June, and the payroll reports for the prior two months were revised lower, signaling a weakening labor market. The data reduced expectations for a near-term interest rate increase by the Federal Reserve, with rates expected to be kept on hold until October.
Reuters cited comments from TD Securities’ Head of Global Economics, James Rossiter, who said the firm’s key expected risk for 2026 was global shipping and that this risk had been anticipated even before the U.S.-Iran conflict. He further stated that because of the closure of the Strait of Hormuz, ships have been redirected all over the world. This led to reduced shipping capacity worldwide, suggesting that its price impacts were continuing to affect the world economy.
With that background, let’s explore our 15 Best NYSE Penny Stocks to Buy According to Hedge Funds.
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Our Methodology
To identify relevant stocks for this article, we screened NYSE-listed companies with market capitalizations above $200 million and share prices below $5. Next, we identified the number of hedge funds holding positions in these stocks as of the end of the first quarter of 2026. Finally, we selected 15 stocks with the highest number of hedge funds holding stakes and ranked them in ascending order.
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 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
15. GCT Semiconductor Holding Inc. (NYSE:GCTS)
With an increased emphasis on AI infrastructure buildout, GCT Semiconductor Holding Inc. (NYSE:GCTS) makes it to our list of 15 best NYSE penny stocks to buy according to hedge funds.
On June 23, GCT Semiconductor Holding Inc. (NYSE:GCTS) announced a renewed strategic commitment to enabling the worldwide buildout. Such strategic focus will enable the company to tap into a rapidly growing AI infrastructure segment, beyond the conventional telecom space.
The company highlighted that AI is now becoming part of real-time environments across enterprise, industrial, and consumer segments. In this scenario, GCT is committed to establishing its Non-Terrestrial Network capabilities and 5G satellite communications as the key wireless foundation linking the physical world to cloud intelligence. Such commitment will position that company as a major stakeholder in AI-led advancements over the next 10 years, as per the CEO of GCT, John Schlaefer:
“AI is moving into every device and every industry.” He added, “Our mission is to enable the wireless pipeline necessary for real‑time AI everywhere. This commitment positions GCT at the center of the next decade of AI‑driven growth.”
The company also shed light on how its connectivity solutions can facilitate a rapid increase in edge computing, which involves processing data close to the source, such as smartphones, sensors, IoT devices, and industrial machines. By managing data locally instead of routing all data back to remote cloud servers, edge computing conserves bandwidth, minimizes delays, and allows immediate decision-making for AI systems operating across the field.
With the aim of enabling edge AI solutions, the company has its core focus on AI Wireless Last Mile, NTN & Satellite Integration, Spatial & Wearables Computing, and Enterprise & Hyperscaler Alignment.
GCT Semiconductor Holding Inc. (NYSE:GCTS) is a fabless semiconductor company that creates wireless communication semiconductors for industrial as well as retail applications. The company’s wireless communication offerings include modems, RF transceivers, IoT chipsets, and system-on-chip services.
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