8 Best Software Penny Stocks to Buy Now

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6. Telos Corp. (NASDAQ:TLS)

Telos Corp. (NASDAQ:TLS) is one of the 8 best software penny stocks to buy now.

On March 17, Wedbush reduced the price target on Telos Corp. (NASDAQ:TLS) from $10 to $8 while reiterating an Outperform rating on the stock. This downward revision comes on the back of the recent decline in the software sector. However, moving into the fiscal year 2026, the firm remains confident about the overall growth trajectory of the company.

That is because of the high demand for federal offerings. This conviction is maintained in the light of the fourth quarter financial report’s performance, which surpassed all primary indicators along with initial annual guidance that was in line with consensus expectations.

On March 17, Keith Bachman from BMO Capital reduced the price target on Telos Corp. (NASDAQ:TLS) from $8 to $5 while maintaining a Market Perform rating on the stock.

Telos produced an impressive quarter, posting revenue ahead of expectations due to strong growth in Security Solutions, particularly in Telos ID. The guidance for fiscal year 2026 met expectations, with awards serving as positive catalysts despite certain timing risks with the government.

Telos Corp. (NASDAQ:TLS) offers cyber, cloud-based, and corporate security services worldwide. It provides automated cyber risk management and compliance, AI services, as well as consulting, operations, and engineering solutions. Its services portfolio also includes identity verification, touchless fingerprint biometric technology, secure mobility solutions, and more.

While we acknowledge the potential of TLS to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than TLS and that has 100x upside potential, check out our report about the cheapest AI stock.

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