In this article, we will be taking a look at the 10 best multibagger penny stocks of 2025.
What Are Multibagger Stocks And How To Identify Them
The term “multibagger” was coined by Peter Lynch in his book titled “One Up On Wall Street” to describe those stocks whose share prices increase several times more than an investor’s original investment. Typically, a multibagger stock is one that can be expected to rise by 100% or more – a huge number that warrants the immense attention investors are giving to multibagger stocks today. Lynch himself is an American investor who managed the Magellan Fund at Fidelity Investments from 1977 to 1990. On multibagger stocks, Lynch noted in his book that these are typically fast-growing companies with the potential to yield significant returns over time. He thus considers investment portfolios that own a diverse variety of numerous stocks to be better placed to benefit from multibagger stocks and their growth, in stark contrast to those portfolios that are overly concentrated on investing in a few companies.
When aiming to invest in multibagger stocks, many investors may wonder about where they can begin to look for these miracle-growth companies. The first few things to consider when looking for such stocks include a company’s fundamentals, ability to act as a pioneer in its industry, and the size of the market it operates in. Generally, a multibagger stock is one that has solid financials, such as robust revenue growth and rising profits, and one that is driving innovation in its industry. Additionally, smaller innovative companies operating in a large addressable market also have the potential to be multibaggers in their fields. This is why many multibaggers are actually penny stocks that are just beginning to generate profits and returns for their investors.
Is The Market Favorable For Penny Stocks?
A lot of investors may feel skeptical when it comes to investing in penny stocks or any small or microcap company – for good reason. These stocks are incredibly volatile and make for very risky investments, seeing as their business is just starting out, and there’s really not much to go on with respect to past fundamentals. However, risky investments often end up being highly rewarding, which is why investors who have a greater tolerance for risk in their portfolios generally tend to take a leap with penny stocks.
The market at present also seems to be gearing up to prove beneficial for the overall growth of penny stocks and small-cap companies. According to Chris Retzler, Needham Small Cap Growth Fund’s portfolio manager, while smaller companies are known to be volatile, the long-term outlook for these companies is presently positive. He believes that in the second half of 2024, we may see a broadening of the market, which is generally good for the economy and particularly good for smaller companies that have been underperforming recently.
According to Retzler, one of the main reasons for the growth potential of smaller companies is that they’re incredibly liquid. This factor, coupled with the fact that we are set to see money starting to flow out of bigger companies only to be redirected to smaller companies, means that many small companies and penny stocks may begin to see their share prices rise exponentially. Additionally, the general market expectation to have lower interest rates over the next 12 months is also favorable for penny stocks that don’t really need a lot of money to flow into them before they begin to see higher stock prices and multiple expansion. Will all these developments, many investors are itching to get their hands on multibagger penny stocks, which is why we’ve compiled the following list.
Our Methodology
We used a stock screener to identify stocks trading under $5 with an upside potential of 100% and above to compile our list. The stocks are ranked based on their upside potential as of August 29, from the lowest to the highest. The price targets are analysts’ average estimates for where the stock could be in the next 12 months. We have also mentioned the share prices and number of hedge funds holding a stake in each stock by using Insider Monkey’s hedge fund data for the second quarter.
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 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
Best Multibagger Penny Stocks of 2025
10. Applied Digital Corporation (NASDAQ:APLD)
Share Price as of August 29: $4.41
Average Upside Potential as of August 29: 126.8%
Number of Hedge Fund Holders: 29
Applied Digital Corporation (NASDAQ:APLD) is an information technology company based in Dallas, Texas. It develops and operates data centers that provide digital infrastructure solutions to the high-performance computing industry.
This Texas-based company is on many investors’ radar because of its commitment to delivering strong long-term shareholder value and the plans it has set in motion to make this happen. Applied Digital Corporation (NASDAQ:APLD) has made substantial progress towards securing a lease agreement with a Fortune 500 company which will stretch over a decade for its Ellendale campus. Through this lease, the company will be able to solidify its position as a leader in the HPC data center market and secure asset-level financing to develop additional sites.
Applied Digital Corporation (NASDAQ:APLD) has a long-term vision of becoming a company operating multiple HPC data centers, starting with its Ellendale campus and continuing with three more campuses that the company is actively marketing today, totaling 1.4 gigawatts. Considering this, several analysts believe Applied Digital Corporation (NASDAQ:APLD) has immense upside potential. However, the company is facing some challenges. While its revenues for the fourth quarter were $43.7 million compared to $22 million for the same period in 2023, it did post an adjusted loss per share of 36 cents for the quarter.
The loss was primarily caused by increased expenses brought about by outages at the Ellendale facility in North Dakota, which necessitated the costly replacement of faulty transformers. However, as per company management in Applied Digital Corporation’s (NASDAQ:APLD) earning call, the worst is over now, and shareholders can now expect sequential improvements in the top line in the first quarter of 2025. While this stock may be a risky investment, analysts still believe it has great potential as a multibagger stock.
There were 29 hedge funds long Applied Digital Corporation (NASDAQ:APLD) in the second quarter, with a total stake value of $176.2 million.
9. indie Semiconductor Inc. (NASDAQ:INDI)
Share Price as of August 29: $3.89
Average Upside Potential as of August 29: 130.1%
Number of Hedge Fund Holders: 16
indie Semiconductor Inc. (NASDAQ:INDI) is a provider of automotive semiconductors and software solutions for advanced driver assistance systems, autonomous vehicles, and in-cabin, connected car, and electrification applications. It is based in Aliso Viejo, California.
Investors are interested in indie Semiconductor Inc. (NASDAQ:INDI) because of its ability to bring about immense revenue growth despite its small size. Over the five years, the company saw revenue growth of 50.7%, and over the past three years, revenue growth stood at 95.4%. While there are significant headwinds in the automotive sector, with the possibility of negatively impacting companies like indie Semiconductor Inc. (NASDAQ:INDI) that are dependent on this sector, the company is still optimistic that it can deliver growth in the third quarter of 2024.
In its earnings call for the second quarter, indie Semiconductor Inc.’s (NASDAQ:INDI) management noted that the company’s new product launches and current customer status will enable the company to continue delivering growth above the market and reach outsized growth levels. The main thing that sets indie Semiconductor Inc. (NASDAQ:INDI) apart from its competitors is that it is the only chip vendor offering all four of the key ADAS sensors – radar, vision, LiDAR, and ultrasound. Because of this, the company can offer any combination of these sensors to its partners.
The company’s new radar front-end application, which has recently been validated, has also made indie Semiconductor Inc. (NASDAQ:INDI) a clear leader in the market for next-generation radar solutions, which has resulted in the company being poised for high growth in 2025.
We saw 16 hedge funds long indie Semiconductor Inc. (NASDAQ:INDI) in the second quarter, with a total stake value of $60.8 million. Soros Fund Management was the most prominent shareholder, holding 2,680,336 shares.
Baron Funds mentioned indie Semiconductor Inc. (NASDAQ:INDI) in its first-quarter 2024 investor letter:
“Indie Semiconductor, Inc. (NASDAQ:INDI) is a fabless designer, developer, and marketer of automotive semiconductors for advanced driver assistance systems and connected car, user experience, and electrification applications. Shares fell during the quarter as the company guided revenue growth for 2024 below Street expectations as its customers digest excess inventory in the early parts of the year. While indie conservatively still expects to be growing at a healthy 25%-plus year-over-year growth rate, well above the industry and peers, investors are concerned the inventory digestion could last longer into 2024 than initially expected despite management confidence in a strong second half of 2024 driven by over 20 new projects layering in through the year across various automakers and applications. Despite the near-term softening, we believe indie remains well positioned for growth over the medium and long term supported by its $6.3 billion design win backlog (versus $220 million in 2023 revenue), and its large program ramps in 2025, including a marquee radar-related rollout, the biggest program in the company’s history. We believe indie can continue to significantly outpace the broader industry and approach $1 billion in revenue by 2028 with premium margins, all supported by its contracted visibility.”
8. Savara, Inc. (NASDAQ:SVRA)
Share Price as of August 29: $4.21
Average Upside Potential as of August 29: 137.5%
Number of Hedge Fund Holders: 20
Savara, Inc. (NASDAQ:SVRA) is a clinical-stage biotech company that focuses on rare respiratory diseases and their treatments. It is based in Langhorne, Pennsylvania.
The main reason why Savara, Inc. (NASDAQ:SVRA) is considered a stock with huge upside potential is because of its lead therapy, molgramostim. This is an inhaled granulocyte-macrophage colony-stimulating factor which is in the Phase 3 development stage for the treatment of autoimmune pulmonary alveolar proteinosis. The therapy fared quite well in Phase 2 trials and was granted the Orphan drug designation by the FDA and European Medicines Agency.
Investors consider the success of molgramostim to be pivotal for Savara, Inc. (NASDAQ:SVRA), which is set to benefit from a huge upside if the therapy proves successful. Considering the fact that the company’s success and growth potential are heavily dependent on the results of molgramostim trials, this is a risky investment, like any other penny stock, but one that offers high rewards to those who take a leap of faith with Savara, Inc. (NASDAQ:SVRA).
Savara, Inc. (NASDAQ:SVRA) was spotted in the 13F holdings of 20 hedge funds in the second quarter, with a total stake value of $132.8 million.
7. Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD)
Share Price as of August 29: $4.7
Average Upside Potential as of August 29: 152.6%
Number of Hedge Fund Holders: 27
Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD) is another biotech company on our list. It focuses on the development and commercialization of gastrointestinal products and is based in Boston, Massachusetts.
Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD) is making great progress in growing its business. In 2023, the company announced an agreement to acquire another clinical-stage biotech company, VectivBio Holding. The acquisition is one that bolsters Ironwood Pharmaceuticals, Inc.’s (NASDAQ:IRWD) position in the biotech area as a gastrointestinal specialist, as it adds the drug apraglutide to its portfolio, which only consisted of Linzess before.
Linzess has also been very beneficial for Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD). Prescription demand for this treatment increased by 11% in the second quarter, which marks the sixth consecutive quarter of double-digit growth. The company also generated $33 million in operating cash flow in the second quarter. In Ironwood Pharmaceuticals, Inc.’s (NASDAQ:IRWD) second-quarter earnings call, company management also noted that apraglitude has an exciting future with the company and represents a lucrative market opportunity, which is ensuring that Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD) is poised for sustainable and immense growth moving forward.
In total, 27 hedge funds were long Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD) in the second quarter, with a total stake value of $317.1 million. Sarissa Capital Management was the largest shareholder, holding 16,390,000 shares.
6. Archer Aviation Inc. (NYSE:ACHR)
Share Price as of August 29: $3.5
Average Upside Potential as of August 29: 152.8%
Number of Hedge Fund Holders: 21
Archer Aviation Inc. (NYSE:ACHR) is an aerospace and defense company based in San Jose, California. It designs, develops, and operates electric vertical takeoff and landing aircraft for use in urban air mobility.
This company is an exciting investment opportunity because it’s looking to bring flying taxis into the world of urban transportation. Archer Aviation Inc.’s (NYSE:ACHR) Midnight aircraft has also recently met key milestones as it is being prepared for commercial use. The company has also recently delivered its first aircraft to the US Air Force and is benefiting from a $50 million investment from Stellantis. The investment came after Archer Aviation Inc.’s (NYSE:ACHR) successful transition flight in June.
The transition flight also led to Future Flight Global agreeing to purchase 116 Midnight aircraft from Archer Aviation Inc. (NYSE:ACHR) for $580 million. Future Flight Global aims to launch air taxi services across Asia, Europe, and the Middle East, and in all this Archer Aviation Inc. (NYSE:ACHR) will be instrumental. Considering the exciting projects planned out for this aviation player, many investors are racing to buy the stock.
Archer Aviation Inc. (NYSE:ACHR) was found in the portfolios of 21 hedge funds in the second quarter, with a total stake value of $100.8 million.
5. Autolus Therapeutics plc (NASDAQ:AUTL)
Share Price as of August 29: $3.9
Average Upside Potential as of August 29: 180.6%
Number of Hedge Fund Holders: 24
Autolus Therapeutics plc (NASDAQ:AUTL) is a clinical-stage biopharmaceutical company that develops T-cell therapies to treat cancer and autoimmune diseases. It is based in London, United Kingdom.
The company has been working on growing partnerships with other healthcare players to drive up its capital. One such collaboration is with BioNTech, which, coupled with a capital markets transaction, allowed Autolus Therapeutics plc (NASDAQ:AUTL) to add $600 million to its balance sheet in the first quarter. The company is now poised to deliver on the launch of Obe-cel, one of its main products. Through its efforts, Autolus Therapeutics plc (NASDAQ:AUTL) has also secured significant opportunities for future growth and expansion since the company is now transitioning from a development-stage biotech to a commercial-stage one.
Another source of encouragement for Autolus Therapeutics plc (NASDAQ:AUTL) is the fact that Blackstone Life Sciences has a deal with the company to provide up to $250 million in financing for its drug development and commercialization. Blackstone is interested in the company because of its potential to deliver lifesaving treatments to cancer patients. All in all, Autolus Therapeutics plc (NASDAQ:AUTL) is well placed to continue development on a commercial level and thus has immense upside potential, according to analysts.
Autolus Therapeutics plc (NASDAQ:AUTL) had 24 hedge funds long its stock in the second quarter, with a total stake value of $207.4 million.
4. Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX)
Share Price as of August 29: $1.7
Average Upside Potential as of August 29: 190.7%
Number of Hedge Fund Holders: 12
Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) is another biotech company on our list, based in The Woodlands, Texas. It develops and commercializes pharmaceutical products for treating heart failure, diabetes, and other medical complications.
The biggest catalyst for Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) came in 2023, with the approval of its once-daily oral heart failure drug, Inpefa, by the FDA. Since the approval, the company has managed to rake in impressive sales. Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) saw net sales of $1.6 million and $2.7 million for the first half of 2024. The company also reaffirmed its goal to achieve formulary access favorable for patients and equitable in light of Inpefa’s value, in its second-quarter earnings call.
Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) is also expected to see further growth if its Phase 3 Sonata trial for HCM proves successful. Through this treatment, the company aims to release an effective treatment for hypertrophic cardiomyopathy, a disease that affects around a million patients in the US today, most of whom go undiagnosed. This represents an immense market for Lexicon Pharmaceuticals, Inc.’s (NASDAQ:LXRX) treatment and, thus, a huge opportunity for further growth and profitability.
A total of 12 hedge funds were long Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) in the second quarter, with a total stake value of $48.3 million.
3. Globalstar, Inc. (PINK:GSAT)
Share Price as of August 29: $1.2
Average Upside Potential as of August 29: 222.6%
Number of Hedge Fund Holders: 16
Globalstar, Inc. (PINK:GSAT) is a communication services company based in Covington, Louisiana. It provides mobile satellite services internationally.
This company is best known for providing satellite technology for recent model iPhones. Globalstar, Inc. (PINK:GSAT) has been working tirelessly to improve its financial situation, and some of its efforts bore fruit in 2023 when it entered into an agreement to sell $200 million worth of senior notes to Värde Partners. The proceeds of the sale were to be utilized to retire all debt Globalstar, Inc. (PINK:GSAT) was under because of its 2019 facility agreement.
Investors are also interested in Globalstar, Inc. (PINK:GSAT) because it has been on a steady path of revenue growth for years. The company saw revenue growth of 11.9% over the past five years and 22.6% over the past three years. As Globalstar, Inc. (PINK:GSAT) continues to improve its financial position, analysts are becoming more optimistic about its growth potential, with them expecting the stock to have an average upside potential of 222.6%.
We saw 16 hedge funds holding stakes in Globalstar, Inc. (PINK:GSAT) in the second quarter, with a total stake value of $105.5 million.
2. AbCellera Biologics Inc. (NASDAQ:ABCL)
Share Price as of August 29: $2.5
Average Upside Potential as of August 29: 329.7%
Number of Hedge Fund Holders: 16
AbCellera Biologics Inc. (NASDAQ:ABCL) is a healthcare company based in Vancouver, Canada. The company builds an engine for antibody drug discovery and development which discovers antibodies from natural immune responses.
The main reason to buy AbCellera Biologics Inc. (NASDAQ:ABCL) right now is that it has been developing its business rigorously enough to initiate 90 programs with downstream revenue potential by this March. Analysts covering the stock believe its revenue can rise significantly over the coming years. The company is also incredibly liquid. In its second-quarter earnings call, it was noted that AbCellera Biologics Inc. (NASDAQ:ABCL) still has about $700 million in cash and equivalents and approximately $220 million in available government funding to help it execute its programs and operations.
One thing to worry about, though, is AbCellera Biologics Inc.’s (NASDAQ:ABCL) cash burn. In the second quarter, the company’s revenue was $7 million, while its R&D expenses for the quarter were $41 million. Some investors may see this as a cause for concern, but seeing as the company overall ended the quarter with $698 million in cash, equivalents, and marketable security, there does seem to be room for AbCellera Biologics Inc. (NASDAQ:ABCL) to continue its current pace of cash burn for a few more years before it needs to raise more capital. All in all, this biotech penny stock is definitely a risky play, but judging by its upside potential, it may be worth the risk.
There were 16 hedge funds long AbCellera Biologics Inc. (NASDAQ:ABCL) in the second quarter, with a total stake value of $122.2 million.
1. Wheels Up Experience Inc. (NYSE:UP)
Share Price as of August 29: $1.8
Average Upside Potential as of August 29: 1620.4%
Number of Hedge Fund Holders: 7
Wheels Up Experience Inc. (NYSE:UP) is a provider of private aviation services internationally. It offers charter flight solutions for groups and membership programs, offering dynamic pricing on a per-trip basis, among more. It is based in Chamblee, Georgia.
Wheels Up Experience Inc. (NYSE:UP) is an exciting aviation player for many investors because it is the first and only major private aviation operator to be publicly sharing its operation performance – and this performance is actually positive. In the second quarter, Wheels Up Experience Inc. (NYSE:UP) saw strong commercial momentum among its members, with block sales rising by over 25% sequentially in the quarter and by over 50% over the past year. The company also brought in revenue of $196 million in the second quarter.
A major collaboration with Delta has also placed Wheels Up Experience Inc. (NYSE:UP) in a position where it can expect immense growth. The company is working with Delta on an expanding pipeline of leads from Delta’s corporate customers who believe that there is value in Wheels Up Experience Inc.’s (NYSE:UP) market-leading combined product offering. Because of all this, the company ended the second quarter with total liquidity and reserve deposits of $261 million.
Seven hedge funds were long Wheels Up Experience Inc. (NYSE:UP) in the second quarter, with a total stake value of $488.4 million.
While aviation stocks like UP hold great value, we believe that AI stocks hold promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than the ones mentioned in our list but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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