In this article, we will discuss the 12 Best Multibagger Penny Stocks to Buy Now.
Investors in the United States and abroad are girding themselves for a turbulent week amid a looming tariff war. President Trump imposed tariffs on imports from Mexico, China, and Canada on February 1—these are the country’s largest trading partners. Goods crossing the border from Mexico and Canada will attract a 25% duty and 10% for those from China. Washington’s justification for this policy action is that it will address trade imbalances, illegal immigration, and drug trafficking.
The problem is that such policy direction doesn’t often sit well with investors. Soon after the tariff announcement, major stock indexes saw significant drops. The S&P 500 is down 0.5% after registering an impressive run since Trump’s inauguration. The Nasdaq has shaved off 0.28%, while the Dow is down 0.75% from the previous close.
In other words, the tariffs are bad news for the US stock market. Experts, such as Jeremy Siegel, believe that we are likely to see more uncertainty and heightened volatility as a result. “Tariffs are the only negative aspect of Trump’s economic agenda. They can lead to higher prices for consumers and potential disruptions in the supply chain. This creates uncertainty and volatility in the stock market,” he told CNBC’s Closing Bell.
Periods of uncertainty often do not favor small caps, according to BlackRock’s Christopher DiPrimio and Travis Cooke. They write, “As a result of some of this more cyclical sector exposure, the Russell 2000 has lagged the S&P 500, especially during periods of market volatility and increased uncertainty.” This is also evident in the latest drops. The Russell 2000 dropped more than major stock indices in the past few hours after the activation of Trump’s tariffs.
Small-cap companies typically derive a larger portion of their revenue domestically. And when uncertainties arise from events like a tariff war, these companies are insulated from external shocks. As such, the potential for higher earnings will make small-cap stocks increasingly attractive to investors.
That aside, small-cap valuations are now attractive. Small-cap stocks are currently trading at attractive valuations, with price/earnings (P/E) ratios slightly above their long-run average of 16.7 times (excluding companies with negative earnings) but still more than 30% below large-cap indices.
Geoff Dailey and colleagues at BNP Paribas Asset Management offer an apt summary of the multibagger potential of US small caps. They write that “The outlook for US small-capitalization stocks is better now than it has been for several years. The main reasons include the US interest rate cutting cycle (small caps tend to benefit), currently attractive valuations, the reshoring trend, and (expected) merger & acquisition activity.”
Beyond these factors, the current market environment offers unique opportunities for penny stock investors. Corporate earnings are showing resilience despite economic headwinds, with companies in the Russell 2000 reporting better-than-expected results. Recent data shows that approximately 58.6% of the companies in the Russell 2000 have reported earnings above analyst expectations for Q4 2024. Besides that, the outlook for 2025 suggests that M&A activity in the small-cap space will pick up momentum. This combination creates a compelling setup for small cap stock investments in 2025.
An investor confidently checking stock market fluctuations on a laptop computer.
Our Methodology
For this article, we used a stock screener to first identify stocks priced under $5 that have posted huge gains over the past year (at least 100%). From the obtained dataset, we selected penny stocks with the highest percentage gains in stock performance over the past year (as of February 5). The list is ranked based on stock performance, from lowest to highest.
At Insider Monkey, we are obsessed with 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).
12 Best Multibagger Penny Stocks to Buy Now
12. Porch Group, Inc. (NASDAQ:PRCH)
Stock Performance Over Last Year: 102.91%
Number of Hedge Fund Holders: 7
Share Price as of February 5: $4.52
Porch Group, Inc. (NASDAQ:PRCH) provides homeowners insurance with vertical software solutions, creating a unique platform in the property services sector. The company’s innovative approach to home services sets it apart in a fragmented market.
A game-changing milestone arrived with the formation of the Porch Insurance Reciprocal Exchange (PIRE), which transformed its insurance business model. The $105 million transaction streamlines operations and promises higher margins and more predictable financial performance.
The financial picture brightened considerably in Q3 2024. Porch Group, Inc. (NASDAQ:PRCH) swung to a $14.4 million profit from a $5.7 million loss year-over-year. Despite revenue dipping 14% to $111.2 million due to one-time factors, core metrics tell a different story – the insurance segment’s attritional loss ratio improved dramatically to 21% from 32%, while premium per policy jumped 25%. The company also repurchased $43 million of notes for just $20 million, strengthening its balance sheet for future growth.
11. Innovid Corp. (NYSE:CTV)
Stock Performance Over Last Year: 107.95%
Number of Hedge Fund Holders: 11
Share Price as of February 5: $3.14
Innovid Corp. (NYSE:CTV) develops software solutions for creating, delivering, measuring, and optimizing digital advertising across connected TV, linear TV, and digital platforms. The company stands out for its independent status in the competitive CTV advertising space.
The company’s recent strategic moves are a testament to its market leadership. For instance, Innovid Corp. (NYSE:CTV) was selected as one of two partners for impression verification within Netflix’s ad-supported platform. The launch of Harmony Reach & Frequency with Roku marks another significant milestone.
Financial performance has been impressive. Innovid Corp.’s (NYSE:CTV) Q3 2024 revenue increased 6% year-over-year to $38.3 million, and net income improved to $4.7 million from a $2.7 million loss in the prior year. The company’s focus on profitability is evident in its ninth consecutive quarter of Adjusted EBITDA margin expansion, reaching 22%. Recent partnerships with industry giants like LG Ad Solutions and a 13% year-over-year jump in CTV impression volume suggest Innovid’s momentum in shaping the next generation of TV advertising is just beginning.
10. Hyliion Holdings Corp. (NYSE:HYLN)
Stock Performance Over Last Year: 120.39%
Number of Hedge Fund Holders: 8
Share Price as of February 5: $2.27
Hyliion Holdings Corp. (NYSE:HYLN) develops sustainable electricity-producing technology through its innovative KARNO generator system. The company provides distributed power generators that can operate on over 20 different fuel sources.
Hyliion Holdings Corp. (NYSE:HYLN) has secured significant milestones, including a $16 million contract from the US Navy’s Office of Naval Research and customer commitments exceeding its 2025 KARNO generator production capacity. Its advanced M Line manufacturing system from Colibrium Additive represents a major production capability upgrade, enabling 2-4 times more parts per machine than current printers.
Hyliion Holdings Corp. (NYSE:HYLN) has made substantial progress in commercialization, with initial KARNO deliveries expected by year-end and revenue guidance in the low double-digit millions for 2025. The company has $237.5 million in cash and investments, a strong order pipeline, and break-even gross margins targeted by late 2025. In this light, Hyliion looks ready to capitalize on the growing demand for sustainable power generation solutions.
9. Gevo Inc. (NASDAQ:GEVO)
Stock Performance Over Last Year: 132.28%
Number of Hedge Fund Holders: 7
Share Price as of February 5: $1.84
Gevo Inc. (NASDAQ:GEVO) creates renewable fuels and chemicals. They developed technology that allows them to produce eco-friendly alternatives to traditional fuels, such as renewable diesel, renewable gasoline, and sustainable aviation fuel (SAF).
Gevo, Inc. (NASDAQ:GEVO) is poised for growth through strategic acquisitions and technological advancements. In Q3, it completed a $210 million acquisition of Red Trail Energy’s ethanol plant and carbon capture assets, adding a 65 million gallons per year low-carbon ethanol plant and a CCS site capturing 160,000 metric tons of carbon annually. The newly renamed “Net-Zero North” facility is expected to contribute $30-60 million in annual adjusted EBITDA. This deal, funded through a combination of equity capital and a $105 million loan from Orion Infrastructure Capital, along with patents for its ethanol-to-olefin (ETO) process, has led analysts at H.C. Wainwright to maintain a Buy rating on the company’s shares with a $14 price target.
8. Dingdong (Cayman) Limited (NYSE:DDL)
Stock Performance Over Last Year: 139.13%
Number of Hedge Fund Holders: 9
Share Price as of February 5: $3.30
Dingdong (Cayman) Limited (NYSE:DDL) operates a leading fresh grocery e-commerce platform in China. The company provides fresh groceries and daily necessities through its mobile app and extensive self-operated frontline fulfillment network.
Dingdong (Cayman) Limited (NYSE:DDL) has demonstrated strong growth momentum, with Q3 2024 GMV increasing 28.3% year-over-year to RMB7.27 billion ($1.04 billion). Its advanced supply chain capabilities and data algorithms have enabled Dingdong to achieve significant operational efficiency, with fulfillment expenses as a percentage of revenue decreasing to 21.4% from 23.2%. In short, the company appears well-positioned to maintain the current growth trajectory in China’s fresh grocery e-commerce market.
7. New Gold, Inc. (NYSE:NGD)
Stock Performance Over Last Year: 144.48%
Number of Hedge Fund Holders: 23
Share Price as of February 3: $3.11
New Gold, Inc. (NYSE:NGD) is a Canadian-focused intermediate mining company that operates two core-producing assets: the Rainy River gold mine and the New Afton copper-gold mine. The company aims to build a leading diversified intermediate gold company based in Canada.
New Gold, Inc. (NYSE:NGD) is on strong operational footing. The latest quarter saw it deliver the highest production, with 80,438 ounces of gold and 14.5 million pounds of copper. New Afton’s performance was particularly impressive, beating its gold production guidance while achieving midpoint copper production targets. The successful commissioning of New Afton’s C-Zone and the first ore from Rainy River underground, both ahead of schedule, demonstrates the company’s execution capabilities.
Despite some operational challenges at Rainy River, New Gold, Inc. (NYSE:NGD) produced 298,303 ounces of gold for the full year 2024 and expects all-in sustaining costs to be at the low end of guidance ($1,240-$1,340 per gold ounce). With upcoming technical reports and operational outlook expected to showcase increased production and cost reduction initiatives, the company appears well-positioned to maximize free cash flow generation.
6. Bridgeline Digital, Inc. (NASDAQ:BLIN)
Stock Performance Over Last Year: 153.43%
Number of Hedge Fund Holders: 3
Share Price as of February 5: $1.95
Bridgeline Digital, Inc. (NASDAQ:BLIN) develops AI-powered marketing technology solutions. Its main product is the HawkSearch platform, which offers site search and personalization features for developers, merchandisers, and, most importantly, marketers.
The HawkSearch platform is a market favorite because two major clients recently implemented it. Bridgeline Digital, Inc. (NASDAQ:BLIN) announced that a prominent global manufacturer of life safety equipment and training for first responders and law enforcement successfully implemented HawkSearch. A day later, a leading provider in the JanSan (Janitorial and Sanitation) industry adopted the platform to, according to the statement, “optimize product discovery on its Optimizely-powered eCommerce site.”
HawkSearch utilizes Salesforce Commerce Cloud to enhance the search experience across the product catalog. Users can also use it to promote specific products, manage out-of-stock items, and refine search result rankings. With a lot of activity and daily interactions worldwide moving online, this tells you that Bridgeline Digital’s stock is likely to see more gains than what it has accomplished so far.
5. Vuzix Corporation (NASDAQ:VUZI)
Stock Performance Over Last Year: 163.86%
Number of Hedge Fund Holders: 5
Share Price as of February 5: $4.38
Vuzix Corporation (NASDAQ:VUZI) leads the AI-driven smart glasses revolution. The company has over 425 patents in optics and augmented reality, making it one of the industry leaders.
Just recently, Vuzix Corporation (NASDAQ:VUZI) launched AugmentOS in partnership with Mentra. This is the first universal operating system for smart glasses. The OS is trailblazing, combining real-time captions, instant translation, and proactive AI assistance with a developer-friendly environment that allows applications to run across multiple smart glasses models.
Vuzix Corporation (NASDAQ:VUZI) also signed a distribution agreement with Evantek. The partnership allows Vuzix to ship its products, particularly the Vuzix M400 smart glasses, to markets across Asia Pacific. These moves are just as timely as they are strategic—they place the company’s stock in a position of strength to continue adding more value into the future.
4. ATRenew Inc (NYSE:RERE)
Stock Performance Over Last Year: 179.61%
Number of Hedge Fund Holders: 12
Share Price as of February 5: $2.88
ATRenew Inc (NYSE:RERE) operates China’s leading platform for pre-owned consumer electronics transactions and services. Some may know the company by its former name, AiHuiShou International Co Ltd. The company’s main business involves selling laptops, mobile phones, drones, digital cameras, and other electronic products online and in some offline stores. It also offers services to third-party merchants to sell products through its platforms.
During the latest quarter, the company’s revenues surged 24.4% to $0.56 billion (RMB4.05 billion). This is also the first time it reported positive GAAP income from operations. Another highlight is that ATRenew Inc (NYSE:RERE) sold 9.1 million items during the quarter, up from 8.2 million a year ago.
ATRenew Inc (NYSE:RERE) also subscribes to the sustainable development philosophy. The company wants to play a meaningful role in creating a better environment in the future, which explains why the United Nations Global Compact (UNGC) recently recognized them in the “Forward Faster” campaign. UNGC placed them among 20 exemplary Chinese companies chosen from 75 candidates.
3. Butterfly Network, Inc. (NYSE:BFLY)
Stock Performance Over Last Year: 330.68%
Number of Hedge Fund Holders: 15
Share Price as of February 5: $4.50
Butterfly Network, Inc. (NYSE:BFLY) is a digital health company revolutionizing medical imaging. Its flagship product is the Butterfly iQ3, a portable, semiconductor-based ultrasound technology. This represents the third generation of the company’s innovative handheld ultrasound system.
The company’s preliminary Q4 2024 revenue grew approximately 35% year over year. This momentum is likely to be sustained, especially after Butterfly Network and its associates recently revealed that point-of-care ultrasound (POCUS) reduces hospital stays for patients. The efficiency gains translate to substantial cost savings, with some patients experiencing up to 50% reduction in healthcare costs. As healthcare systems increasingly adopt POCUS to improve patient outcomes and reduce costs, Butterfly Network is poised to benefit from this growing market demand.
Furthermore, the company has moved to strengthen its financial position. It recently secured $75.6 million through a public offering of 24 million shares at $3.15 per share. This capital injection will accelerate product development and commercialization efforts. The timing is particularly strategic as Butterfly’s iQ3 device just earned Best Medical Technology at the 2024 Prix Galien USA Awards, further validating its innovative approach to healthcare technology.
2. Curiositystream Inc. (NASDAQ:CURI)
Stock Performance Over Last Year: 412.26%
Number of Hedge Fund Holders: 5
Share Price as of February 5: $2.72
Curiositystream Inc. (NASDAQ:CURI) operates a global factual entertainment platform. It offers documentary series and features across science, technology, history, and nature categories. Viewers consume the company’s content through direct subscriptions and multiple distribution partnerships.
Curiositystream Inc.’s (NASDAQ:CURI) financial situation is solid. The latest financial report indicates that direct subscription revenue grew 13% year-over-year to $9.8 million. At the same time, total revenue reached $12.6 million. The company also achieved its highest-ever quarterly adjusted free cash flow of $2.6 million, marking its eighth consecutive quarter of growth. Reducing operating costs and content amortization saw the gross margin improve to 54% from 46% a year ago.
Curiositystream Inc. (NASDAQ:CURI) is working on leveraging AI to grow revenues. The company announced that it would license content and data for AI training purposes, a move that should generate a substantial sum of income. According to its President and CEO, Clint Stinchcomb, CuriosityStream’s pivot into the AI space should generate revenue that may exceed half of its direct subscription revenue.
“AI is fundamentally transforming the technology landscape, and CuriosityStream is uniquely positioned to deliver content at scale to meet the evolving needs of AI model training. These opportunities are part of our broader strategy to unlock new and significant revenue streams that complement our subscription business. In light of our work with various hyper-scalers and other tech companies for AI video training, we believe our overall licensing revenue will be more than half of our direct subscription revenue this year. And we believe this will be the case for some time going forward.”
This pivot comes alongside expanding distribution—they’ve launched PayTV channels in Europe and Latin America, rolled out new AVOD packages with Pluto, Tubi, and Roku, and launched four FAST channels with Samsung TV+. The company’s confidence in this strategy is reflected in its recent 20% dividend increase to $0.03 per share. With $39.8 million in cash, no debt, and projected Q4 revenue of $12-14 million, Curiositystream Inc. (NASDAQ:CURI) is on the right track in terms of capitalizing on both traditional content distribution and emerging AI opportunities.
1. KULR Technology Group, Inc. (NYSE:KULR)
Stock Performance Over Last Year: 1,165.63%
Number of Hedge Fund Holders: 1
Share Price as of February 5: $2.02
KULR Technology Group, Inc. (NYSE:KULR) is a leading provider of next-generation energy management technologies for aerospace, defense, and consumer electronics applications. The company specializes in cutting-edge energy storage solutions and thermal management systems.
KULR Technology Group, Inc. (NYSE:KULR) has recently made significant strategic moves to capitalize on the growing AI infrastructure market. It recently announced a key partnership with EDOM Technology, a premier NVIDIA Channel Partner. The partnership will deliver its innovative KULR Xero Vibe™ and KULR ONE product lines to Taiwan’s AI supply chain ecosystem. The company has also secured important licensing partnerships for data center cooling and advanced semiconductor solutions.
KULR Technology Group, Inc.’s (NYSE:KULR) aggressive expansion into AI infrastructure cooling solutions, combined with its strong balance sheet management strategy – including allocating up to 90% of surplus cash to bitcoin as a treasury asset – has attracted significant investor interest. The company’s focus on thermal management solutions for high-performance computing and AI applications positions it well to benefit from the ongoing AI infrastructure buildout, particularly as power consumption and cooling become critical challenges in data centers.
While we acknowledge the potential of KULR Technology Group, Inc. (NYSE:KULR) 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 timeframe. If you are looking for an AI stock that is more promising than KULR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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