In this article, we will look at the 7 High-Growth Penny Stocks That Are Profitable in 2025.
On July 15, Riverwater Partners’ Founder and CEO released his quarterly letter and small-cap strategy, highlighting a surprising paradox. He noted that despite global trade disruptions and geopolitical tensions, the markets are showing resilience. The quarter was marked by some unusual trade disruptions as the US took military action against Iran, causing oil prices to drop dramatically. Moreover, the tariff shock on the Liberation Day also caused a sudden market shock, but it was postponed due to higher volatility.
In such turmoil, common sense suggests that markets should drop; however, the global equity and bond markets mostly rallied to near or record highs. An exception was the US small-cap stocks, which lagged. Riverwater believes this underperformance isn’t supported by fundamentals and remains confident in the small-caps future. The CEO noted that AI tools are expected to democratize automation and coding, benefiting small companies more over time. Although big names currently lead the AI infrastructure, the next wave of AI is expected to favour the small-caps as they would gain access to powerful tools once limited to giants.
Riverwater Partners finds small caps to be attractively valued and noted that the segment has outpaced large-cap revenue growth over the past decade. The main hurdle is investor sentiment and preference for large-caps with high price multiples. The firm expects this trend to reverse, unlocking strong returns for quality small-cap investments.
With that, let’s take a look at the 7 high-growth penny stocks that are profitable in 2025.
A portfolio manager studying various stocks and other securities on a tablet.
Our Methodology
To curate the list of 7 high-growth penny stocks that are profitable in 2025, we used the Finviz stock screener, Yahoo Finance, Seeking Alpha, and CNN. Using the screener, we aggregated a list of penny stocks (trading below $5) with year-over-year sales growth of more than 20% and positive TTM net income. Next, we cross-checked the sales growth from Seeking Alpha and the TTM net income from Yahoo Finance. Lastly, we ranked the stocks in ascending order of the analyst upside potential sourced from CNN. For instances where analyst upside potential was not available, we used the number of hedge fund holders as of Q1 2025 as our ranking metric. Please note that the data was recorded on July 24, 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
7 High-Growth Penny Stocks That Are Profitable in 2025
7. TOYO Co., Ltd. (NASDAQ:TOYO)
Price: $3.59
Year-Over-Year Sales Growth: 183.69%
TTM Net Income: $33.41M
Number of Hedge Fund Holders: 1
Analyst Upside Potential: N/A
TOYO Co., Ltd. (NASDAQ:TOYO) is one of the High Growth Penny Stocks That Are Profitable in 2025. On May 15, TOYO Co., Ltd. (NASDAQ:TOYO) provided updates to its financial report for 2024.
Management noted that it had filed its full annual report with the SEC on May 12, 2025. The company reported its operating expenses growing sharply from $4.7 million in 2023 to $13.0 million in 2024. Moreover, the selling and marketing expenses also rose from $0.02 million a year ago to $1.6 million in 2024. This was due to the higher freight, handling, and sales commissions.
On the bright side, TOYO Co., Ltd. (NASDAQ:TOYO) significantly grew its net income from $9.9 million in 2023 to $40.5 million. As a result, the EPS also went up to $1.09 from $0.24 a year ago. The company had cash and restricted cash of around $17.1 million at the end of 2024, which is slightly less than the $19.0 million at the end of 2023.
TOYO Co., Ltd. (NASDAQ:TOYO) is a solar solutions company that designs, manufactures, and sells solar cells and photovoltaic modules.
6. Tuya Inc. (NYSE:TUYA)
Price: $2.58
Year-Over-Year Sales Growth: 27.63%
TTM Net Income: $19.56M
Number of Hedge Fund Holders: 16
Analyst Upside Potential: 26.23%
Tuya Inc. (NYSE:TUYA) is one of the High Growth Penny Stocks That Are Profitable in 2025. On May 23, Tuya Inc. (NYSE:TUYA) co-hosted The Global Telecom AIoT Summit 2025 along with T3 Technology and Skyworth in Bangkok.
The event’s theme was “New Era of Intelligence for All Industries,” and its goal was to promote smart solutions across industries and speed up digital transformation in Southeast Asia. The company’s Co-Chairman and President, Leo Chen, spoke about his decade-long dedication to AIoT. He noted that Thailand’s “Digital Thailand” plan closely matches Tuya Inc. (NYSE:TUYA)’s vision to advance global intelligence. Moreover, the company also unveiled the Southeast Asia Digital and AI Transformation Joint Initiative at the summit. This initiative promotes cooperation among governments, businesses, and research institutions to expand AI use and build a prosperous digital future.
Tuya Inc. (NYSE:TUYA) is a global IoT cloud platform service provider that enables businesses and developers to create smart IoT devices and applications.
