10 Most Promising Penny Stocks According to Hedge Funds

5. Marqeta Inc. (NASDAQ:MQ)

Share Price as of October 11: $4.98

Number of Hedge Fund Holders: 35

Marqeta Inc. (NASDAQ:MQ) is a card-issuing platform that provides infrastructure and tools to help companies build and manage payment programs. It provides the technology and infrastructure for businesses to issue their own branded cards, such as debit, credit, and prepaid cards. Its platform offers flexibility, scalability, and a range of features, making it a popular choice for companies in various industries, including fintech, ride-sharing, and e-commerce.

It recently partnered with Varo Bank, which selected it to process its card transactions, with migration scheduled to take place in 2025 under a 5-year contract. Zoho chose it for its expertise in launching card solutions for expense management. Despite such expansions, the company’s revenue fell by 45.80% year-over-year due to a change in how the company reports revenue from Cash App. Its suite of risk solutions, including 3DS and risk control, were up 61%.

In August, Payhawk partnered with the company to implement advanced card controls for fraud prevention and compliance. In late September, Marqeta Inc. (NASDAQ:MQ) and Found came together to offer streamlined expense management solutions for small businesses. Around the same time, Rippling and this company launched corporate credit cards in Canada to address the growing demand for better financial services for small businesses.

The popularity of digital banking among younger demographics presents a significant opportunity for Marqeta Inc. (NASDAQ:MQ). According to a survey, one-third of consumers now exclusively use digital banks, and 63% of 18-to-34-year-olds are open to non-traditional financial services, increasing the market share of modern banks. Its platform has demonstrated strong growth in financial services transactions. With a proven track record of serving large businesses, the company is well-positioned to capitalize on the expanding digital banking market and achieve future growth.