In this article, we will take a detailed look at 10 Most Volatile Stocks Under $3 For Day Trading.
Day trading involves buying and selling stocks within a single trading day to capitalize on short-term price movements. Volatile stocks are often preferred for their frequent price swings, creating opportunities for quick profits. Equity beta, which measures the sensitivity of a stock’s return to market changes, is a key metric often used by investors for gauging volatility. Day traders close their positions by the end of the trading day to avoid the risks associated with holding overnight, such as unexpected market events, earnings announcements, or global developments that can drastically impact stock prices before the next trading session begins. While penny stocks, particularly those priced under $3.00 per share, are appealing due to their low entry cost and potential for rapid gains, they also carry heightened risks like low liquidity and susceptibility to manipulation. The key takeaway for readers is that these trades shall be approached with cautiousness and a clear strategy with risk management in place.
READ ALSO: 10 Best Stocks For Day Trading
Stocks under $3.00 offer a distinct advantage in that they typically operate below the radar of hedge funds, which prioritize larger, more liquid investments to accommodate their substantial capital and complex strategies. Hedge funds, the most informed and skilled investors, leverage extensive resources, market expertise, and advanced analytics to gain a competitive edge. Their absence in the penny stock space leaves more room for retail investors to seize opportunities without competing against institutional investors’ sophisticated tactics. This lack of institutional interest can create less efficient pricing, offering well-researched retail traders the potential to identify undervalued stocks and profit from short-term volatility via day trading.
Short-term trading strategies become more attractive during times of macroeconomic uncertainty, which can further fuel volatility and create opportunities for swing trading. The main volatility index in the US market still remains elevated vs. its moving average as investors have a hard time digesting the tariffs situation and the abrupt cuts in federal workforce and spending. Bond yields are reluctant to price in lower rates in the future – despite odds of an economic recession rising substantially if compared to the beginning of the year, the potentially accelerating inflation, as fueled by tariffs, will likely keep rates high. Regardless of what happens, it is clear that Trump 2.0 gives investors plenty of anxiety – many have been actively seeking cheaper investments abroad, particularly in Europe, which has caused the US stock market to relatively underperform the rest of the world.
Small-cap stocks are usually the most affected during periods of heightened volatility. The good news is that the Bull-Bear Ratio compiled by Investors Intelligence fell to 1.3 during the past week, which, from a contrarian perspective, is a bullish signal. This means that pockets of opportunity might soon return to the penny stocks category, both for long-term investors and day traders. Despite short-term fears and uncertainty, the fundamentals of the US stock market remain solid, with future earnings estimates staying strong and potentially seeing an uplift from tax cuts later this year or next. We suggest considering stocks with a high equity beta, above 2.0, as this category will likely outperform in a rising market.
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Our Methodology
We used Finviz to filter companies with a share price under $3.00 and that have an equity beta above 2.0. Then we compared the list with Insider Monkey’s proprietary database of hedge funds’ holdings as of Q4 2024 and included in the article the top 10 stocks with the highest hedge fund ownership.
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).
10. MicroVision, Inc. (NASDAQ:MVIS)
Number of Hedge Fund Holders: 11
MicroVision, Inc. (NASDAQ:MVIS) is a technology company specializing in lidar sensors and augmented reality (AR) display solutions. It develops solid-state lidar systems for automotive applications, including advanced driver-assistance systems (ADAS) and autonomous vehicles. The company also designs MEMS-based laser scanning technology used in projection, 3D sensing, and AR applications. MVIS’s lidar products aim to enhance object detection, mapping, and safety in mobility and industrial automation. It primarily serves automotive OEMs, Tier 1 suppliers, and other technology firms integrating lidar into their systems, and generates revenue through product sales, licensing, and technology development agreements. The US-based company ranked seventh on our recent list of 12 Best AI Penny Stocks to Buy According to Hedge Funds.
MicroVision, Inc. (NASDAQ:MVIS) is tactically carving out a strong presence in both the industrial and automotive LiDAR sectors. Within these markets, industrial sales present the most promising avenue for securing consistent annual revenue streams. The company’s flagship offerings are distinguished by the seamless integration of LiDAR hardware and perception software, operating at minimal power levels – a distinct competitive edge. Notably, MVIS is engaged in seven RFQs with automotive manufacturers, targeting safety applications for L2+ and L3 passenger vehicles.
On the financial front, MicroVision, Inc. (NASDAQ:MVIS) has reinforced its balance sheet through a convertible note facility, ensuring financial stability through 2026. Operational costs have been streamlined, achieving an annual operating expenditure range of $48 million to $50 million for 2025. This positions MVIS among the industry leaders with remarkably low cash burn rates. The anticipated revenue for 2024 ranges between $8 million and $10 million, with significant contributions expected in Q4 from LiDAR sensor sales and non-recurring engineering development fees. Additionally, the company’s scalable production capabilities – reaching an output of approximately 45,000 units annually on a single shift – underscore its potential for delivering cost-competitive solutions, bolstered by proprietary low-cost sequential flash LiDAR and MEMS scanning technologies. With an equity beta of 2.62, MVIS is one of the most volatile stocks under $3 for day trading.
9. Microvast Holdings, Inc. (NASDAQ:MVST)
Number of Hedge Fund Holders: 12
Microvast Holdings, Inc. (NASDAQ:MVST) is a technology-driven company specializing in the development and manufacturing of lithium-ion battery solutions for commercial and specialty electric vehicles. Its products include high-energy-density battery cells, modules, and packs designed for fast charging, long cycle life, and safety. The company serves markets such as electric buses, trucks, trains, and energy storage systems, working with OEMs and fleet operators. MVST focuses on vertical integration, controlling key aspects of battery technology, including cell chemistry, design, and manufacturing. Revenue comes from product sales, research collaborations, and partnerships in the EV and energy storage sectors.
Microvast Holdings, Inc. (NASDAQ:MVST) achieved a significant milestone in Q3 2024 by reaching profitability, reporting a net profit of $13.2 million and adjusted EBITDA of $29 million. The company delivered record third-quarter revenue of $101.4 million, representing a 27% YoY growth. This growth was primarily driven by strong sales in the EMEA region, which saw a remarkable 212% increase YoY and accounted for 59% of quarterly revenue. MVST’s gross margin improved to 33.2%, up from 22.3% in Q3 2023, due to better economies of scale, a more favorable product mix, and lower raw material prices. The company has been focusing on improving efficiency and profitability, implementing strategic cost-cutting measures in the US while executing solid business strategies in EMEA and APAC.
Microvast Holdings, Inc. (NASDAQ:MVST) continues to innovate, unveiling new silicon-based cell technology and introducing the ME6 LFP ESS container, an overhaulable high-performance energy storage solution. The company is expanding its commercial vehicle reach, particularly in EMEA, and has secured new partnerships with companies like Propel, XCMG, and LGMG in the mining, construction, and auxiliary equipment industries. Looking ahead, management expects Q4 2024 revenue to be in the range of $90 million to $95 million, with full-year revenue growth anticipated between 15% to 18%. The company aims to maintain a target gross margin of at least 25% and is focusing on sustained positive adjusted EBITDA contributions from its established business in EMEA and APAC. With an equity beta of 2.44, MVST is one of the most volatile stocks under $3 for day trading.
8. Navitas Semiconductor Corporation (NASDAQ:NVTS)
Number of Hedge Fund Holders: 13
Navitas Semiconductor Corporation (NASDAQ:NVTS) is a semiconductor company specializing in gallium nitride (GaN) and silicon carbide (SiC) power technologies. Its products enable higher efficiency, faster charging, and smaller designs for applications in consumer electronics, data centers, renewable energy, and electric vehicles. The company’s GaNFast and GeneSiC technologies replace traditional silicon-based power semiconductors, reducing energy loss and improving performance. NVTS serves industries requiring high-power conversion efficiency, including mobile charging, industrial power, and automotive electrification. Revenue is generated through the sale of power ICs, modules, and licensing agreements with global electronics manufacturers.
Navitas Semiconductor Corporation (NASDAQ:NVTS) stands out as the industry’s sole pure-play innovator in next-generation power semiconductors, focusing exclusively on GaN and SiC technologies without the distraction of conventional silicon devices. The company has experienced notable success in the mobile charger segment, with its GaN technology adopted by all major players in smartphones, tablets, and laptops. However, with current adoption at just 10%, there remains substantial room for growth. NVTS is concentrating its efforts on three key markets: AI data centers, onboard chargers for electric vehicles, and mobile charging solutions.
Financially, Navitas Semiconductor Corporation (NASDAQ:NVTS) is in a robust position, boasting a strong balance sheet with $87 million in cash and no debt, while aiming for EBITDA profitability by 2026. Despite challenges such as market headwinds and inventory corrections affecting the early months of 2024, the company predicts a recovery in the latter half of the year, driven by the stabilization of key markets and the realization of design wins. Last year, NVTS secured $450 million in lifetime design wins, which are expected to fuel revenue growth between 2025 and 2027. Additionally, the company’s technological edge is evident in its proprietary GaN power IC integration – protected by 200 patents – and its innovative trench-assisted planar silicon carbide technology, which combines superior performance with ease of manufacturing. With an equity beta of 2.14, NVTS is one of the most volatile stocks under $3 for day trading.
7. Olaplex Holdings, Inc. (NASDAQ:OLPX)
Number of Hedge Fund Holders: 15
Olaplex Holdings, Inc. (NASDAQ:OLPX) is a science-driven beauty company specializing in hair care products designed to repair and strengthen damaged hair. Its patented Bond Building Technology targets broken hair bonds caused by chemical, thermal, and mechanical damage. The company offers a range of shampoos, conditioners, treatments, and styling products used by both professionals and consumers. OLPX distributes its products through salons, retailers, e-commerce platforms, and direct-to-consumer channels. It serves global markets, leveraging brand loyalty and a strong presence in the premium hair care segment. Revenue is generated through product sales across professional, specialty retail, and digital channels.
For Q4 2024, Olaplex Holdings, Inc. (NASDAQ:OLPX) reported net sales of $100.7 million and adjusted EBITDA of $17.5 million, while full-year net sales were $422.7 million, representing a 7.8% decline from 2023. The company demonstrated progress in its transformation strategy through three key priorities: maximizing sales and marketing impact, strengthening capabilities and culture, and developing a long-term vision. The company’s end-of-year performance showed improvement with better-than-expected holiday season results, maintaining strong positions in key accounts across distribution channels. Notably, OLAPLEX regained the #1 position in earned media value among US hair care brands in December and had the #1 set in US prestige hair care during the 2024 holiday season.
Looking ahead to 2025, Olaplex Holdings, Inc. (NASDAQ:OLPX) introduced its “Bonds and Beyond” strategic vision, focusing on expanding beyond damage repair to position the OLAPLEX brand as a solution for everyday foundational hair health. The financial outlook for 2025 projects net sales growth between -3% to +2% versus 2024, with adjusted EBITDA margin expected between 20% to 22% as the company invests in marketing and talent. The company plans to continue its international business transformation by focusing on fewer, stronger distributor partnerships and implementing localized strategies across markets. With an equity beta of 2.31, OLPX is one of the most volatile stocks under $3 for day trading.
6. Rackspace Technology, Inc. (NASDAQ:RXT)
Number of Hedge Fund Holders: 15
Rackspace Technology, Inc. (NASDAQ:RXT) is a multi-cloud solutions provider offering managed services, consulting, and cloud infrastructure optimization. It helps businesses design, migrate, manage, and secure workloads across public, private, and hybrid cloud environments, partnering with major cloud providers like AWS, Microsoft Azure, and Google Cloud. The company serves enterprises across various industries, focusing on cost efficiency, security, and scalability. Its revenue comes from cloud management, professional services, and recurring subscription-based solutions. RXT also provides AI, data analytics, and cybersecurity services to enhance digital transformation for its clients.
Rackspace Technology, Inc. (NASDAQ:RXT) delivered strong Q4 2024 results, exceeding guidance for revenue, profit, and EPS, marking the tenth consecutive quarter of meeting or beating expectations. The company achieved record-breaking quarterly sales bookings, reaching the highest level since early 2023. Full-year sales bookings grew by 14%, driven by strong performance in the Americas and increasing adoption of hybrid cloud solutions across multiple industries. In the Private Cloud segment, Q4 2024 was a record sales bookings quarter, with bookings more than doubling sequentially and showing high double-digit YoY growth. The Public Cloud segment demonstrated robust performance with GAAP revenue of $417 million, surpassing the guided range due to increased cloud consumption.
Rackspace Technology, Inc. (NASDAQ:RXT) made significant progress in AI initiatives, with more than 50 customers and close to 200 opportunities in the pipeline at various stages. Looking ahead to 2025, management expects positive operating cash flow and free cash flow, supported by operating profit growth in low double digits, mainly driven by margin improvements and ongoing efficiency enhancements. The company’s strategic focus remains on three key priorities: operational turnaround progress, positioning as an innovative hybrid cloud and AI solutions company, and improving capital structure to support sustainable profitable growth. With an equity beta of 2.03, RXT is one of the most volatile stocks under $3 for day trading.
5. Pacific Biosciences of California, Inc. (NASDAQ:PACB)
Number of Hedge Fund Holders: 17
Pacific Biosciences of California, Inc. (NASDAQ:PACB) is a biotechnology company specializing in advanced DNA sequencing technologies. It develops and sells long-read and high-throughput sequencing systems used for genomics research, clinical applications, and agricultural biology. Its proprietary HiFi sequencing technology enables high accuracy in detecting genetic variations, structural variants, and epigenetic modifications. The company serves academic institutions, government agencies, pharmaceutical companies, and clinical researchers. Revenue is generated through instrument sales, consumables, and service contracts. PACB’s sequencing solutions are used in applications such as rare disease research, cancer genomics, and microbial and plant genome analysis. The California-based company ranked ninth on our recent list of Top 11 CRISPR Stocks to Invest In.
In Q4 2024, Pacific Biosciences of California, Inc. (NASDAQ:PACB) achieved $39.2 million in revenue, primarily driven by shipments of 23 Revio systems and 7 Vega platforms. Over the course of the year, the company reported $154 million in total revenue, supported by the delivery of 97 Revio systems, of which approximately 45% went to new customers of PacBio instruments. The company also recorded impressive growth in its HiFi sequencing technology, with genomic data output increasing by 81% in 2024. Additionally, consumable revenue rose by 11% YoY to $70.4 million.
As Pacific Biosciences of California, Inc. (NASDAQ:PACB) looks ahead to 2025, revenue is anticipated to range between $155 million and $170 million, reflecting a 6% increase at the midpoint despite challenges from ongoing macroeconomic pressures and uncertainty regarding NIH funding. The company has significantly improved operational efficiency, reducing annual non-GAAP operating expenses by over $75 million and cutting the COGS for Revio systems and consumables by 16% and 22%, respectively. With nearly 15% of 2024 revenues derived from LDT labs or children’s hospitals, the clinical strategy appears promising. Furthermore, management aims to turn the company’s cash flow positive by the end of 2027, supported by $390 million in cash and investments, comfortably surpassing its first debt maturity in August 2029. With an equity beta of 2.01, PACB is one of the most volatile stocks under $3 for day trading.
4. Opendoor Technologies Inc. (NASDAQ:OPEN)
Number of Hedge Fund Holders: 20
Opendoor Technologies Inc. (NASDAQ:OPEN) is a real estate technology company that operates an online platform for buying and selling residential properties. It uses data analytics and automation to provide instant home offers, streamline transactions, and reduce the complexities of traditional real estate processes. Sellers can receive cash offers and close quickly, while buyers access a marketplace of listed homes with digital touring and financing options. OPEN primarily generates revenue by purchasing homes, reselling them at a margin, and offering ancillary services such as financing and title insurance. The company operates in multiple US markets, targeting homeowners seeking speed and convenience in real estate transactions.
Opendoor Technologies Inc. (NASDAQ:OPEN) reported mixed results for Q4 2024 and the full year, with some improvements in financial performance despite ongoing challenges in the real estate market. The company exceeded its outlook for acquisitions, revenue, contribution margin, and adjusted EBITDA in Q4. Revenue for Q4 was $1.1 billion, up 25% YoY, while full-year revenue decreased to $5.2 billion from $6.9 billion in 2023. Contribution profit improved significantly, reaching $242 million for the full year compared to a loss of $258 million in 2023, with a contribution margin of 4.7%. Adjusted EBITDA loss narrowed to $142 million for the full year, a substantial improvement from the $627 million loss in 2023. The company ended the year with a strong balance sheet, including $1.1 billion in total capital and $6.9 billion in non-recourse asset-backed borrowing capacity.
Opendoor Technologies Inc. (NASDAQ:OPEN) is focusing on optimizing contribution profit dollars, exploring new revenue opportunities, and ensuring long-term value creation. The company is implementing strategies to enhance customer experience, improve pricing models, and align marketing efforts with seasonal patterns. Despite ongoing macro challenges in the real estate market, OPEN is expanding its offerings, including List with Opendoor and Marketplace, to serve more sellers and unlock new revenue opportunities. Management is committed to driving towards sustainable, profitable growth and expects to significantly reduce the adjusted net losses of the company in 2025. With an equity beta of 2.77, OPEN is one of the most volatile stocks under $3 for day trading.
3. Butterfly Network, Inc. (NYSE:BFLY)
Number of Hedge Fund Holders: 26
Butterfly Network, Inc. (NYSE:BFLY) is a digital health company that focuses on revolutionizing medical imaging through its handheld ultrasound technology. It develops the Butterfly iQ, a portable, pocket-sized ultrasound device that connects to smartphones and provides real-time imaging for a variety of medical applications. The company’s technology uses a single, advanced semiconductor chip for imaging, which reduces cost and complexity compared to traditional ultrasound systems. BFLY offers its products to healthcare providers, including hospitals, clinics, and individual practitioners, with a focus on improving diagnostic accessibility and efficiency. Revenue is generated through device sales, subscriptions, and cloud-based services. The US-based company ranked first on our recent list of 10 Hot Penny Stocks to Buy Now.
Butterfly Network, Inc. (NYSE:BFLY) delivered strong financial performance in 2024 with revenue of $82.1 million, representing 25% top-line growth, while improving adjusted EBITDA by 42% to a loss of $38.9 million. The launch of iQ3 was notably successful, representing 50% of overall 2024 sales and units and 58% of Pro revenue, delivering higher ASPs than their second-generation device. The company has expanded its market presence with doctors who previously hesitated to choose Butterfly now adopting iQ3, existing users upgrading, and new users trading in competitive devices. The company strengthened its financial position through a follow-on offering in late January 2025, raising $81.7 million to provide a bridge to cash flow independence.
Looking forward, Butterfly Network, Inc. (NYSE:BFLY) has provided 2025 revenue guidance of $96 million to $100 million, representing approximately 20% growth, with an adjusted EBITDA loss of $37 million to $42 million. The company is advancing strategic initiatives including Octiv partnerships, with five partners now signed including Sonic Incytes, and the HomeCare business which is showing promising early results in pilot programs. The company is focusing on scaling in 2025 with planned software improvements to enhance data management workflows, expand EMR integrations, and make data management more valuable for smaller customers. With an equity beta of 2.55, BFLY is one of the most volatile stocks under $3 for day trading.
2. Clear Channel Outdoor Holdings, Inc. (NYSE:CCO)
Number of Hedge Fund Holders: 33
Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) is a global outdoor advertising company that specializes in billboard, transit, and digital media advertising. It operates a diverse portfolio of advertising assets, including static and digital billboards, transit displays, and street furniture, in major markets across the Americas and international locations. CCO provides advertisers with the ability to target audiences at scale through high-visibility outdoor placements. The company serves a wide range of industries, including retail, automotive, entertainment, and technology, and generates revenue through the sale of advertising space, digital media solutions, and data-driven advertising services.
Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) has made significant progress in its strategic realignment, with the successful sale of Europe-North set to close by the end of March 2025. The company has already completed sales of Switzerland, Italy, France, Chile, Peru, and Mexico, with only Brazil and Spain remaining in the divestiture pipeline. The Europe-North sale will generate proceeds of $625 million, with $375 million allocated to pay down the BV term loan. The company’s focus is shifting to the US market, which offers higher growth and higher-margin businesses with more stable revenue growth. Corporate expenses are expected to decrease by approximately $35 million following the divestitures, bringing the total down to roughly $100 million. In the core US business, digital revenue now accounts for 36% of full-year revenue, with potential for further growth as some markets have achieved digital penetration rates in the low 50s.
Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) aims to be cash flow positive in 2025 and is focused on delivering the business, with a long-term leverage target between 4x to 6x, compared to the current level of approximately 9.5x. Management is exploring creative solutions for growth, including potential joint ventures with sponsors and strategic use of inventory through barter deals. With an equity beta of 2.71, CCO is one of the most volatile stocks under $3 for day trading.
1. EVgo, Inc. (NASDAQ:EVGO)
Number of Hedge Fund Holders: 37
EVgo, Inc. (NASDAQ:EVGO) is a leading electric vehicle (EV) charging infrastructure company in the United States. It operates a network of fast-charging stations for electric vehicles, providing both public and fleet charging solutions. EVGO’s network supports various EV models and aims to accelerate the adoption of electric vehicles by providing convenient, accessible, and reliable charging options. The company generates revenue through charging fees, network access subscriptions, and partnerships with automakers and businesses. It is focused on expanding its charging infrastructure to support the growing demand for EVs as part of the transition to cleaner transportation.
EVgo, Inc. (NASDAQ:EVGO) delivered strong financial results in Q4 and the full year 2024, with total revenue growing 60% YoY to $257 million. The company’s core charging network revenues more than doubled, increasing 110% to $155.7 million. EVGO achieved record operational stall additions, ending 2024 with 4,080 stalls, a 37% increase over 2023. Network utilization improved significantly, reaching 24% in Q4 2024, up from 19% a year ago. The company made substantial progress on profitability, with the charging network gross margin expanding to 37.6% in 2024, up from 26% in 2023.
EVgo, Inc. (NASDAQ:EVGO) secured a $1.25 billion loan guarantee from the Department of Energy, ensuring funding to more than triple its installed base over the next 5 years. The company is making strides in improving customer experience, with 50% of EVGO stalls now served by higher power 350-kilowatt chargers. The company is also focusing on operating efficiencies, achieving a 9% reduction in gross CapEx per stall for current-generation chargers in 2024. Looking ahead, management expects 2025 revenues in the range of $340 million to $380 million and anticipates reaching adjusted EBITDA breakeven. The company is well-positioned to benefit from the growing electric vehicle market, with a resilient business model that can adapt to various market scenarios.
Overall EVgo, Inc. (NASDAQ:EVGO) ranks first on our list of the 10 most volatile stocks under $3 for day trading. While we acknowledge the potential of EVGO as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than EVGO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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