On January 14, Lale Akoner, global market analyst at eToro, appeared on CNBC to state that 2026 is driven by rotation into small caps and advised diversification. Recent data from BofA showed that customers had been selling equities over the six weeks leading up to that point, alongside observed outflows from ETFs that had previously seen consistent inflows. Akoner interpreted this not as a broad move away from risk assets, but rather as a significant rotation within the risk asset class. The shift is driven by a 2026 outlook shaped by a rate-cutting cycle, the conclusion of quantitative tightening, and the anticipation of financial deregulation. Consequently, Akoner suggested moving away from growth technology stocks in favor of more consumer-sensitive stocks and banks and noted that a steepening yield curve makes banks a particularly strong pick.

Addressing the challenge of outperforming the index while reducing exposure to the MAG7 and other big tech names (which remain powerful earnings generators), Akoner acknowledged the importance of maintaining exposure to these growth names but argued that 2026 will be the year of small caps and the average US stock. She explained that the current policy environment is rare, as rate cuts are occurring simultaneously with the end of quantitative tightening and increasing bank reserves. This combination is expected to ease financial conditions and support risk assets generally. The recommended strategy is to bring down exposure to growth names without going underweight, while capitalizing on the favorable macro backdrop.

That being said, we’re here with a list of the 7 best fast growing penny stocks to buy according to analysts.

Our Methodology

We sifted through the Finviz stock screener to compile a list of penny stocks that had a share price between $1 and $5, and also had high revenue growth (at least 100%). We then selected 7 stocks that had an upside potential of over 40%. The stocks are ranked in ascending order of their upside potential. We have also added the hedge fund sentiment for each stock, as of Q3 2025.

Note: All data was sourced on January 29. 

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).

7 Best Fast Growing Penny Stocks to Buy According to Analysts

7. Lexicon Pharmaceuticals Inc. (NASDAQ:LXRX)

Number of Hedge Fund Holders: 13

Average Upside Potential: 43.84%

Lexicon Pharmaceuticals Inc. (NASDAQ:LXRX) is one of the best fast growing penny stocks to buy according to analysts. On January 14, Citi analyst Yigal Nochomovitz increased the price target for Lexicon to $2.10 from $1.90 while maintaining a Buy rating. This upward revision resulted from an updated financial model that accounted for upcoming milestones under the LX9851 partnership with Novo Nordisk.

In Q3 2025, Lexicon Pharmaceuticals Inc. (NASDAQ:LXRX) reported revenue of $14.2 million, which was driven by $13.2 million in licensing revenue from its partnership with Novo Nordisk. The company’s net loss narrowed to $12.8 million, or $0.04 per share, compared to $64.8 million in the previous year.

The company achieved several key R&D milestones, including the completion of all IND-enabling studies for its obesity candidate, LX9851, which were submitted to Novo Nordisk for clinical development. Lexicon is also advancing its heart failure medication, INPEFA, into international markets via licensee Viatris and submitted additional data to the FDA to support the benefit-risk profile for Zynquista in type 1 diabetes

Lexicon Pharmaceuticals Inc. (NASDAQ:LXRX) is a biopharmaceutical company that discovers, develops, and commercializes pharmaceutical products for the treatment of human disease.

6. Strive Inc. (NASDAQ:ASST)

Number of Hedge Fund Holders: 13

Average Upside Potential: 90.02%

Strive Inc. (NASDAQ:ASST) is one of the best fast growing penny stocks to buy according to analysts. On January 21, Maxim Group reiterated a Buy rating for Strive. The firm also maintained a price target of $1.50 on the company’s shares.

In other news, on January 16, Strive announced the acquisition of Semler Scientific, which is a move that establishes Strive as the 11th largest public corporate holder of Bitcoin globally with a treasury of approximately 12,797.9 BTC. Alongside the acquisition, Strive expanded its leadership team by appointing former board member Avik Roy as Chief Strategy Officer, where he will oversee the monetization and expansion of Semler’s early disease detection business. This consolidation aligns Semler’s medical technology assets and Bitcoin-heavy treasury with Strive’s mission as a premier Bitcoin treasury asset management firm.

In Q3 2025, Strive Inc. (NASDAQ:ASST) established itself as the first publicly traded Bitcoin treasury asset management firm through a successful reverse acquisition of Asset Entities Inc. During this period, the company raised $762.6 million via PIPE financing and warrant exercises, while also initiating an agreement to acquire Semler Scientific.

Strive Inc. (NASDAQ:ASST) is a bitcoin treasury company. The company also has a wholly owned subsidiary, Strive Asset Management LLC, which is a privately owned investment manager that primarily provides its services to investment companies.