In this article, we discuss 10 Penny Stocks With Huge Upside Potential According To Analysts.
Penny stocks trade below $5 and attract investors looking for high returns with a small initial investment. These stocks are often associated with small-cap and mid-cap companies, which have traditionally outperformed large-cap stocks due to their growth potential and higher risk. However, in recent years, these smaller firms have struggled to keep pace, as large-cap stocks—particularly major tech companies—have led market gains. A key factor behind this trend is the changing makeup of major stock indices. The broader market, heavily influenced by a handful of mega-cap stocks, has skewed overall market performance. If the so-called Magnificent Seven stocks were excluded, the wider market’s advantage over the small-cap Russell index would be significantly reduced. Historically, small-cap stocks have tended to outperform large caps following periods of market volatility.
At the end of December 2024, Fundstrat’s Tom Lee told CNBC that with the Fed cutting rates and a pro-business administration taking over, companies would likely see 2025 as a prime time for expansion, including mergers and acquisitions. He believes this will create a strong market for small and mid-cap stocks, with financials, cyclicals, and industrials benefiting the most. Lee also pointed out that Trump’s tariff policies and potential labor market disruptions from mass deportations could impact the stock market. Another risk is if the Fed focuses too much on inflation and weakens the labor market. On a different yet interesting note, he predicted Bitcoin could hit $250,000 in 2025, with Ethereum reaching $5,000-$6,000. He was also optimistic about Solana and other altcoins.
Similarly, Jill Carey Hall, who is BofA’s Head of US Small/Mid Cap Strategy, recently commented that financials and healthcare tend to see more mergers and acquisitions under Republican administrations, which could mean a strong market in 2025 if macro conditions stay favorable. She expects banks to benefit from a more relaxed regulatory environment, improving their margins and efficiency. While there is optimism around deregulation for small-cap stocks, she cautioned that in the recent past, they did not perform as well despite deregulation because their success was tied to tariffs, trade policies, and the manufacturing recession.
Further insights came from Chris Retzler, portfolio manager for Needham’s Small Cap Growth Fund, who shared his outlook for small-caps on CNBC’s Squawk Box on January 17, 2025. He noted that small-cap companies are looking for policy certainty, and once the new administration’s direction becomes clearer, we could see growth accelerate. Globally, the EV sector is thriving, even as it faces some hurdles in the United States.
Meanwhile, innovation in semiconductors, new materials, and infrastructure, especially data centers, is driving investment, creating opportunities for small caps as well. Retzler emphasized that if the government prioritizes American manufacturing, more infrastructure will be needed, benefiting small-cap stocks. He also highlighted the potential upside of moderate, well-implemented tariff policies and deregulation, which could boost M&A activity. When small caps are acquired and integrated into larger platforms, it helps recycle assets and reduce costs. IPOs may soon pick up, and Retzler sees a strong and optimistic market for small caps in the long run. With this outlook in mind, let’s take a look at some penny stocks with huge upside potential as per Wall Street analysts.
Photo by Mohamed Hadji on Unsplash
Our Methodology
We checked multiple reliable sources to find penny stocks with big catalysts and strong growth potential. To see what retail investors are buzzing about, we also looked through Reddit discussions. Then, we checked Wall Street analysts’ average upside predictions for these stocks. We have also included the number of hedge funds holding each stock as of Q4 2024. The list below ranks them in ascending order based on upside potential as of March 20.
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. Arbe Robotics Ltd. (NASDAQ:ARBE)
Average Upside Potential as of March 20: 136.22%
Number of Hedge Fund Holders: 7
Arbe Robotics Ltd. (NASDAQ:ARBE) was founded in 2015 and is headquartered in Tel Aviv-Yafo, Israel. It is a semiconductor company that develops 4D imaging radar solutions for top automotive suppliers and manufacturers worldwide, including in China, the United States, Germany, and Israel. The company disclosed on January 7 that it plans to sell nearly 9 million shares at $3.20 each, expecting to raise around $29 million before fees. The company is also giving underwriters a 30-day option to buy over 1.3 million additional shares. The sale was meant to close by January 8, 2025. It aims to use the money for general business expenses.
On January 6, Arbe Robotics Ltd. (NASDAQ:ARBE) announced that it is collaborating with NVIDIA to push AI-driven free space mapping to the next level. At CES 2025, the company will showcase its ultra-high-definition radar, built to improve vehicle safety and autonomy by detecting small obstacles, handling complex environments, and working seamlessly with other sensors. With a high-resolution MIMO array, Arbe’s radar delivers accurate long-range detection in any conditions. Its integration with NVIDIA DRIVE AGX enhances hands-free driving and real-time safety. By combining advanced mapping and perception tech, Arbe is shaping the future of autonomous driving.
The company’s Q4 2024 earnings dropped to $0.1 million from $0.35 million the previous year, while full-year revenue fell from $1.5 million in 2023 to $0.8 million in 2024. As of December 31, 2024, Arbe Robotics Ltd. (NASDAQ:ARBE) had $24.6 million in cash, later adding another $54.5 million in January 2025 to strengthen its balance sheet. Looking ahead, Arbe expects to bring in between $2 million and $5 million in 2025, with most of that revenue coming in the second half of the year. It is one of the stocks with the biggest upside to look out for.
According to Insider Monkey’s fourth quarter database, 7 hedge funds reported owning stakes in Arbe Robotics Ltd. (NASDAQ:ARBE), compared to 3 funds in the last quarter. Anand Parekh’s Alyeska Investment Group was the largest stakeholder of the company, with 4.10 million shares worth $7.6 million.
9. Compugen Ltd. (NASDAQ:CGEN)
Average Upside Potential as of March 20: 148.35%
Number of Hedge Fund Holders: 10
Compugen Ltd. (NASDAQ:CGEN) is a biotech company developing new cancer therapies, with operations in Israel, the United States, and Europe. The company’s Unigen platform uses AI and advanced data analysis to discover and develop new cancer immunotherapies. By integrating multi-omics, single-cell RNA sequencing, and spatial omics data, it helps identify promising drug targets and refine treatments based on real-world trial results.
Unigen has already produced several promising drug candidates and secured partnerships with leading pharmaceutical companies. A notable collaboration is with AstraZeneca, which licensed Compugen Ltd. (NASDAQ:CGEN)’s TIGIT-binding antibodies in 2018, including COM902. So far, the company has received $40.5 million and stands to earn up to $200 million in milestone payments, plus royalties on future sales.
Compugen is in a strong financial position, with enough cash to keep operations running until 2027. This gives the company the flexibility to push forward with its clinical and early-stage research, including the Phase 1 trial of GS-0321, an anti-IL18BP therapy licensed to Gilead. In 2024, it secured a $30 million milestone payment from Gilead for IND clearance and continues to use its AI-powered Unigen platform to speed up drug discovery.
At the end of 2024, Compugen Ltd. (NASDAQ:CGEN) had about $103.3 million in cash, boosted by a $60 million upfront payment and the aforementioned $30 million milestone payment from Gilead, along with $15 million from AstraZeneca for Phase 3 trials of rilvegostomig. In early 2025, the company raised another $8.87 million through stock sales. With no debt, Compugen expects its cash reserves to cover operations into 2027.
8. Bit Digital, Inc. (NASDAQ:BTBT)
Average Upside Potential as of March 20: 242.32%
Number of Hedge Fund Holders: 14
Bit Digital, Inc. (NASDAQ:BTBT) is a bitcoin mining company that also operates high-performance computing data centers, providing hosting, colocation, and cloud-based GPU services for AI and machine learning. The company is involved in digital asset mining, Ethereum staking, and investment management. It is one of the top stocks with the biggest upside to monitor.
On February 10, Bit Digital, Inc. (NASDAQ:BTBT) signed a five-year colocation contract with a leading AI hardware company through its newly rebranded HPC business, WhiteFiber. The deal, managed under Enovum Data Centers, will provide 5 MW of custom-built data center infrastructure, set to go live in mid-2025.
Bit Digital, Inc. (NASDAQ:BTBT)’s revenue soared to $108.1 million in 2024, more than doubling from the previous year, driven by its high-performance computing business. Bitcoin mining brought in $58.6 million, cloud services added $45.7 million, and ETH staking revenue rose 169% to $1.8 million. The company ended the year with $98.9 million in cash and $260.7 million in total liquidity. By year-end, BTBT held 741.9 BTC and 27,623.2 ETH, valued at $69.3 million and $92.1 million, respectively.
Among the hedge funds tracked by Insider Monkey, 14 funds reported owning stakes in Bit Digital, Inc. (NASDAQ:BTBT) at the end of Q4 2024, compared to 6 funds in the last quarter. Ken Griffin’s Citadel Investment Group was the leading stakeholder of the company, with 2.21 million shares worth $6.5 million.
7. Rapid Micro Biosystems, Inc. (NASDAQ:RPID)
Average Upside Potential as of March 20: 244.83%
Number of Hedge Fund Holders: 3
Rapid Micro Biosystems, Inc. (NASDAQ:RPID) develops technology that detects microbial contamination in pharmaceutical, medical device, and personal care manufacturing. Its flagship product, The Growth Direct platform, is made to automate microbial quality control testing for biologics, vaccines, cell and gene therapies, and sterile injectables.
Rapid Micro Biosystems, Inc. (NASDAQ:RPID) is one of the top stocks with the biggest upside to keep an eye out for. The company granted stock incentives to new employees in March 2025, including RSUs and stock options at $2.27 per share. These awards vest over time, encouraging long-term commitment and attracting talent per Nasdaq rules.
On February 28, Rapid Micro Biosystems, Inc. (NASDAQ:RPID) reported financial results for Q4 2024. The company brought in $8.2 million in revenue for the quarter, up 30% from the same period last year. Product sales amounted to $5.2 million, a 27% jump, while service revenue grew 35% to $3 million. Recurring revenue also saw a 27% gain, reaching $4.2 million in Q4. The company narrowed its net loss to $9.7 million from $11.2 million the year before, with a loss per share of $0.22. By the end of 2024, RPID held $50.7 million in cash and no debt.
According to Insider Monkey’s Q4 data, Rapid Micro Biosystems, Inc. (NASDAQ:RPID) was part of 3 hedge fund portfolios, the same as the prior quarter. Israel Englander’s Millennium Management, Ken Griffin’s Citadel Investment Group, and Jim Simons’ Renaissance Technologies held stakes in RPID.
6. Beyond Air, Inc. (NASDAQ:XAIR)
Average Upside Potential as of March 20: 340.98%
Number of Hedge Fund Holders: 10
Beyond Air, Inc. (NASDAQ:XAIR) is a medical device and biopharma company developing innovative nitric oxide treatments. Its LungFit platform targets newborn pulmonary hypertension, viral lung infections, and nontuberculous mycobacteria. The company also explores nitric oxide-based therapies for autism and neurological disorders. XAIR ranks 6th on our list of stocks with the biggest upside.
On March 11, Beyond Air, Inc. (NASDAQ:XAIR) announced plans to expand the reach of its LungFit PH system with new distribution deals in France, Romania, Turkey, and Morocco. Just 15 weeks after receiving CE Mark approval, the system is now available in 18 countries, with more agreements on the way. The company expects international adoption to move faster than in the United States, due to experience gained from US hospitals and strong distribution partnerships.
Beyond Air finished the quarter ending December 31, 2024, with $1.1 million in revenue, a notable increase from $0.4 million in 2023. However, costs ran higher due to LungFit device depreciation and upgrade expenses. The company reported a $2.4 million loss, largely from writing off debt. As of December 31, XAIR had $10.9 million in cash and securities, with $11.8 million in debt, though repayments do not start until October 2026. With its current cash strategy and expected revenue growth, Beyond Air believes it has enough funds to operate well into 2026.
Among the hedge funds tracked by Insider Monkey in Q4 2024, 10 funds reported owning stakes in Beyond Air, Inc. (NASDAQ:XAIR), compared to 9 funds in the last quarter.
5. Lifeward Ltd. (NASDAQ:LFWD)
Average Upside Potential as of March 20: 466.04%
Number of Hedge Fund Holders: 2
Lifeward Ltd. (NASDAQ:LFWD) develops innovative medical devices that help people with mobility challenges regain independence. Its product portfolio includes exoskeletons, rehab suits, and anti-gravity systems. On February 5, the company partnered with BARMER, Germany’s second-largest health insurer, to expand access to ReWalk Exoskeletons. With 8.5 million members, BARMER is streamlining reimbursement for eligible users, supporting Lifeward’s global reach of exoskeleton coverage.
On January 7, the company announced that it was raising about $5 million by selling 1.82 million shares at $2.75 each in a direct offering. Investors will also get short-term warrants to buy the same number of shares at the same price. H.C. Wainwright & Co. handled the deal, which was set to close on January 8, 2025. The funds will be utilized for business growth, operations, and general expenses.
Lifeward finished the fourth quarter of 2024 with $7.5 million in revenue, up 10% from last year. Sales of ReWalk exoskeletons and related products dipped slightly due to training delays, but AlterG sales increased 17%, driven by strong international demand. Gross margin took a hit, dropping to 24.4% from 35.5%, mainly due to restructuring costs. The company ended the year with $6.7 million in cash and no debt. Looking ahead, Lifeward Ltd. (NASDAQ:LFWD) expects 2025 revenue to be between $28 million and $30 million, with improved gross margins of 47%-49% and a reduced operating loss of $7 million to $9 million.
According to Insider Monkey’s fourth-quarter database, Squarepoint Ops and Renaissance Technologies held long positions in Lifeward Ltd. (NASDAQ:LFWD).
4. Gossamer Bio, Inc. (NASDAQ:GOSS)
Average Upside Potential as of March 20: 529.50%
Number of Hedge Fund Holders: 35
Gossamer Bio, Inc. (NASDAQ:GOSS) is a California-based biopharmaceutical company focused on developing seralutinib, a potential treatment for pulmonary arterial hypertension. The company’s lead drug, GB002, is an inhaled therapy currently in Phase 3 clinical trials. It is one of the stocks with the biggest upside, ranking 4th on our list.
On March 18, H.C. Wainwright reaffirmed its Buy rating on Gossamer Bio, Inc. (NASDAQ:GOSS) with a $10 target, despite the stock trading at $1.39 after a 52.56% gain in six months. Analysts are optimistic about Gossamer’s drug seralutinib, an inhaled treatment being developed for lung diseases that cause high blood pressure (PAH and PH-ILD). Unlike other treatments that simply relax blood vessels, seralutinib works to repair them, which could make it a top-choice therapy and boost the company’s future success.
By the end of 2024, Gossamer Bio, Inc. (NASDAQ:GOSS) had $294.5 million in cash, enough to fund operations through mid-2027. R&D expenses rose to $36.1 million in Q4, up from $30 million in 2023, with annual costs reaching $138.5 million. G&A expenses saw a slight Q4 increase to $9.4 million but dropped annually to $36.1 million. Net loss improved significantly, falling to $33 million in Q4 from $48.1 million the previous year, with full-year losses dropping to $56.5 million from $179.8 million in 2023.
According to Insider Monkey’s fourth quarter database, 35 hedge funds reported owning stakes in Gossamer Bio, Inc. (NASDAQ:GOSS), compared to 28 funds in the last quarter. Octagon Capital Advisors was the largest stakeholder of the company, with 18.35 million shares valued at $16.6 million.
3. Adicet Bio, Inc. (NASDAQ:ACET)
Average Upside Potential as of March 20: 671.80%
Number of Hedge Fund Holders: 18
Boston-based Adicet Bio, Inc. (NASDAQ:ACET) develops allogeneic gamma delta T cell therapies for cancer and autoimmune diseases. Its lead candidate, ADI-001, is in a Phase I trial for B cell non-Hodgkin’s lymphoma and autoimmune conditions, while ADI-270 targets renal cell carcinoma and other CD70+ tumors. Wall Street analysts are bullish on the ACET, making it one of the penny stocks with the biggest upside.
On February 27, Adicet Bio, Inc. (NASDAQ:ACET) announced that the FDA granted Fast Track Designation to ADI-001 for systemic sclerosis (SSc), expediting its development. ADI-001, a CAR T cell therapy targeting CD20, is also approved for lupus nephritis (LN) and systemic lupus erythematosus (SLE). The company is advancing it across six autoimmune diseases, with LN trials underway and enrollment for SLE, SSc, myositis, and stiff person syndrome starting in Q2 2025.
In Q4 2024, Adicet Bio, Inc. (NASDAQ:ACET)’s R&D expenses came in at $23.3 million, compared to $24.8 million in Q3 2024, mainly due to lower manufacturing costs. Meanwhile, G&A expenses increased to $7.5 million from $6.8 million, because of higher professional fees. The company reported a net loss of $28.7 million for the fourth quarter, slightly better than the $29.5 million loss in the same quarter last year, including non-cash stock-based compensation. As of December 31, 2024, cash and short-term investments rose to $176.3 million from $159.7 million, and the company expects to sustain operations through late 2026.
According to Insider Monkey’s fourth quarter database, 18 hedge funds were bullish on Adicet Bio, Inc. (NASDAQ:ACET), compared to the last quarter, when 17 funds had invested in the company.
2. OS Therapies Incorporated (NYSEAMERICAN:OSTX)
Average Upside Potential as of March 20: 820.25%
Number of Hedge Fund Holders: 1
Founded in 2018, OS Therapies Incorporated (NYSEAMERICAN:OSTX) is a biopharmaceutical company based in Rockville, Maryland, working on treatments for osteosarcoma and other solid tumors. The company’s pipeline includes OST-HER2, an off-the-shelf immunotherapy for osteosarcoma, and OST-tADC, a flexible antibody-drug conjugate platform. OSTX ranks second on our list of the penny stocks with the biggest upside.
On February 20, OS Therapies Incorporated (NYSEAMERICAN:OSTX) secured a USPTO patent for OST-HER2’s manufacturing, ensuring market exclusivity until 2040. Following a successful Phase 2b trial, it plans to seek FDA approval in 2025. OST-HER2 has received important regulatory designations, and the company aims to launch it for osteosarcoma, sell its Priority Review Voucher, and expand into breast cancer. The market potential is estimated at over $500 million for osteosarcoma and more than $1 billion for breast cancer. After raising $7.1 million in early 2025, OSTX has enough funding to operate through mid-2026.
OS Therapies Incorporated (NYSEAMERICAN:OSTX) had a significant third quarter, completing its IPO and finishing a major clinical trial for its cancer treatment, OST-HER2. The company said it will share trial results in December 2024 and work with the FDA to bring this potential treatment to patients as soon as possible. OS Therapies hopes to make money by selling a special FDA voucher and licensing its treatments. The company reported a $2.875 million loss in Q3 2024, mainly due to IPO costs, compared to a $2.006 million loss in Q3 2023.
1. PDS Biotechnology Corporation (NASDAQ:PDSB)
Average Upside Potential as of March 20: 1467.16%
Number of Hedge Fund Holders: 5
PDS Biotechnology Corporation (NASDAQ:PDSB) is a clinical-stage biopharma company that specializes in the development of cancer immunotherapies. The company’s main drug, PDS0101, is in Phase II trials and aims to be a first-line treatment for head and neck cancer caused by HPV16. PDSB is also developing experimental therapies for prostate, breast, ovarian, lung, and colorectal cancers, along with a potential melanoma treatment. It ranks 1st on our list of penny stocks with the biggest upside.
On March 13, PDS Biotechnology Corporation (NASDAQ:PDSB) received FDA approval to test a new cancer treatment that combines Versamune MUC1 and PDS01ADC for advanced colorectal cancer patients who have not responded to other treatments. MUC1 is a protein linked to drug resistance in several cancers, including colon, breast, and ovarian, so finding better treatments is crucial. The National Cancer Institute will run the Phase 1/2 trial as part of its partnership with PDS Biotech.
H.C. Wainwright reaffirmed a Buy rating for PDS Biotechnology Corporation (NASDAQ:PDSB) with a $21 price target on March 10, far above its $1.23 value. The company’s Phase 3 VERSATILE-003 trial is underway, building on promising Phase 2 results for its Versamune HPV treatment. If successful, it could become the first targeted immunotherapy for head and neck cancer.
According to Insider Monkey’s fourth quarter database, 5 hedge funds were long PDS Biotechnology Corporation (NASDAQ:PDSB), the same as the prior quarter. Ken Griffin’s Citadel Investment Group was the largest stakeholder of the company, with 220,215 shares valued at $358,950.
Overall, PDS Biotechnology Corporation (NASDAQ:PDSB) ranks first on our list of penny stocks with huge upside potential. While we acknowledge the potential of PDSB to grow, our conviction lies in the belief that certain 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 PDSB but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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