For the week ending December 5, the Russell 2000 index rose by 1.58%. This gain was higher than the 0.85% rise seen in the broad S&P 500 index during the same time. Small-cap stocks have also recently benefited from expectations of interest rate cuts.
Jill Carey Hall, equity and quant strategist at Bank of America Securities, said:
“We expect small caps to outperform in 2026, with earnings to drive returns.”
She also pointed out that potential Federal Reserve rate cuts and a strong capital expenditure cycle would be solid drivers.
Previously, on November 17, Morgan Stanley had shared its global economic and strategic outlook. The firm said that risk assets are set for a strong year in 2026. This strength will come from “micro fundamentals, accelerating AI capex, and a favorable policy backdrop.”
Morgan Stanley expects US stocks to outperform other markets in 2026. The research firm prefers global stocks over bonds and credit. This view is also supported by growing AI-related capital expenditures and a favorable policy environment.
According to Morgan Stanley, the S&P 500 could reach 7,800 by the end of 2026. As of December 5, the broad market index is sitting at 6,870. This growth is expected to come from earnings gains and improvements in efficiency that will come from AI technology. However, the firm believes US small caps will outperform large-cap stocks.
With this background in mind, let’s take a look at the 15 best technology penny stocks to buy.
Image: Depositphotos
Our Methodology
To compile our list of the 15 best technology penny stocks to buy, we used the Finviz stock screener to look for stocks in the technology sector with a share price of under $5 as of December 5, 2025. We sorted our results based on market capitalization and picked the top 40 penny stocks. Next, we focused on the top 15 tech stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q3 2025 database of 978 elite hedge funds. Finally, the 15 best technology penny stocks to buy were ranked in ascending order based on the number of hedge funds holding stakes in them as of Q3 2025.
Why do we care about what hedge funds do? 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).
15 Best Technology Penny Stocks to Buy
15. Blaize Holdings, Inc. (NASDAQ:BZAI)
Share Price: $2.41
Number of Hedge Fund Holders: 13
Blaize Holdings, Inc. (NASDAQ:BZAI) is one of the best technology penny stocks to buy. On November 14, TipRanks reported that Scott Searle from Roth MKM reiterated the firm’s Buy rating on Blaize Holdings, Inc. (NASDAQ:BZAI) with a price target of $8.50.
On the same day, DA Davison also reaffirmed its Buy rating on Blaize Holdings, Inc. (NASDAQ:BZAI) and kept the price target at $10. These updates came after the company released its Q3 2025 earnings report. Blaize Holdings, Inc. (NASDAQ:BZAI) delivered a strong performance and beat the top-line growth expectations, which led to an increase in the lower end of the company’s revenue guidance range.
Blaize Holdings, Inc. (NASDAQ:BZAI) reported $11.9 million in revenue for the quarter, surpassing the upper end of the previous guidance range of $11.0 to $11.5 million. The third quarter was important for the company and it showed a 499% increase in revenue compared to the previous quarter. Blaize Holdings, Inc. (NASDAQ:BZAI) is seeing an acceleration in the adoption of its Hybrid AI platform in key regions, thanks to major customer programs and growing partnerships.
The company also expanded its commercial deployments and advanced collaborations in the Middle East, South Asia, and in industrial and sovereign AI infrastructure.
DA Davison pointed out that Blaize Holdings, Inc. (NASDAQ:BZAI) is starting to ship initial capacity related to its Starshine contract. The company has started delivering on its $120 million multi-year contract with Starshine, which supports Hybrid AI technology for smart urban infrastructure, agriculture, and industrial uses in Asia. This contract allows energy-efficient intelligence for city operations and business. The company also plans to explore more opportunities in this region in 2026.
Blaize Holdings, Inc. (NASDAQ:BZAI) is a technology company that provides a full-stack programmable processor architecture suite and a low-code/no-code software platform designed to support AI processing solutions for high-performance computing in edge devices and data centers.
14. Ribbon Communications Inc. (NASDAQ:RBBN)
Share Price: $2.89
Number of Hedge Fund Holders: 14
Ribbon Communications Inc. (NASDAQ:RBBN) is one of the best technology penny stocks to buy. On November 17, Citizens reaffirmed its Market Outperform rating for Ribbon Communications Inc. (NASDAQ:RBBN). The research firm has a price target of $6 on the stock.
The firm’s analysts pointed out several strong reasons for this positive outlook. Citizens noted that Ribbon Communications Inc. (NASDAQ:RBBN) offers a suite of products that is in a good position to benefit from the global rollout of 5G technology. The growth of generative AI is also expected to increase network traffic, which should support the demand for the company’s services.
Additionally, the US government’s incentives to modernize networks are expected to support Ribbon Communications Inc.’s (NASDAQ:RBBN) future growth. Citizens highlighted the company’s profitable Cloud and Edge business, which serves as a strong foundation for the company to expand. Ribbon Communications Inc. (NASDAQ:RBBN) has a large market opportunity, with more than $10 billion in serviceable addressable market. This shows that the company has a lot of room for growth.
The research firm also mentioned that Ribbon Communications Inc. (NASDAQ:RBBN) has a strong presence in international markets, and this is seen as a positive factor for investors.
Citizens also identified the shift away from legacy copper networks and the ongoing adoption of cloud technologies as positive factors that support the investment thesis for Ribbon Communications Inc. (NASDAQ:RBBN).
Ribbon Communications Inc. (NASDAQ:RBBN) is a technology company that provides communications software, IP, and optical networking solutions to service providers, enterprises, and critical infrastructure sectors.
