In this article, we will look at the 12 Best Penny Stocks to Invest in According to the Media.
Small-Cap Stocks Outlook for 2025
On December 24, Global Advisors’ managing partner, Tom Lee, shared his thoughts on the potential of small and mid-cap stocks in 2025. Lee pointed out that 2025 is going to be a good year for small and mid-cap stocks. Backed by interest rate cuts and the incoming administration, companies are going to be expansionary and feel confident about mergers, added Lee. Moreover, Lee has already reiterated that small-cap stocks are trading at a discount with a medium P/E multiple of 10. In an interview with CNBC, Lee said:
“I think small caps could in the next couple of years outperform by more than 100%.”
New Street Advisors CEO Delano Saporu has similar thoughts and believes that small-cap stocks are well-positioned to outperform in 2025. The economy has shown resilience in 2024, especially the recovery in the last quarter has signaled a promising outlook for businesses. Donald Trump’s win has already driven significant gains in small-cap stocks amid the growing enthusiasm around the potential easing of regulations on businesses. Small-cap stocks are conventionally focused on the domestic market, with less exposure to international trade compared to large-cap counterparts. Therefore, Trump’s tariff policies will not have a major impact on small-cap stocks compared to large-cap stocks.
If you are interested in exploring the best penny stocks to buy in 2025, you can visit the 10 Best Penny Stocks to Buy for 2025.
Heading into 2025, the US stock market will deliver a second consecutive year of impressive gains. The S&P 500 index surged more than 25% in 2024. Whereas, the tech-heavy Nasdaq 100 jumped up to 28%. The Russell 2000 index, which covers small-cap companies, soared more than 15% over the last year, while the Dow Jones U.S. Small-Cap Index has risen by 18%.
Torsten Slok, economist at Apollo Global Management (APO), released his 2025 economic outlook for the U.S. According to Slok, the U.S. economy will deliver strong results with no signs of major slowing in 2025. Slok added that interest rates will likely stay ‘higher for longer’ despite the Fed’s current interest rate-cutting cycle. The US economy is expected to register GDP growth of 2.2% in 2025, signaling a modest growth, driven by less restrictive monetary policy, resilient consumer spending, and a steadying labor market.
With that, let’s take a look at the 12 Best Penny Stocks to Invest in According to the Media.
Our Methodology
To compile our list of the best penny stocks to invest in according to the media, we gathered over 50 penny stocks from financial media websites on the internet. We then selected the top 12 penny stocks that were the most widely held by hedge funds, as of Q3 2024. The list is ranked in ascending order based on the number of hedge fund holders in each stock.
Why do we care about what hedge funds do? 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 Penny Stocks to Invest in According to the Media
12. Expensify, Inc. (NASDAQ:EXFY)
Share Price (As of January 3): $3.60
Number of Hedge Fund Holders: 14
Founded in 2008, Expensify, Inc. (NASDAQ:EXFY) offers a cloud-based expense management software platform that offers services to all kinds of businesses. The company’s expense management software services simplify managing money for individuals and corporations.
Expensify, Inc. (NASDAQ:EXFY) has been expanding its operations globally. On top of that, the company has repaid its debt, as of Q3 2024. The company has cleared the debt from its balance sheet and repurchased 645,938 shares of its Class A common stock from its founder, reflecting its growing confidence in its business.
Expensify, Inc. (NASDAQ:EXFY) has huge potential for growth due to a large global addressable expense management market. During the third quarter of 2024, revenue and earnings exceeded analyst estimates by 2.3% and 12%, respectively. In Q3, the average paid members were around 684,000 while the interchange from the Expensify Card increased by 48% year-over-year. The increase in interchange rate, driven by the new card program, and the company’s core focus on its cost efficiency has helped EXFY improve its operating cash flow. Therefore, the company now expects FY 2024 to end with a higher FCF and has an FCF guidance for the year between $19 million and $20 million.
11. Elevation Oncology, Inc. (NASDAQ:ELEV)
Share Price (As of January 3): $0.66
Number of Hedge Fund Holders: 16
Elevation Oncology, Inc. (NASDAQ:ELEV) is a US-based oncology company that is engaged in the development of targeted therapeutics for cancer treatment. The company’s specialty lies in selective cancer therapies to treat patients across a range of solid tumors.
Elevation Oncology, Inc. (NASDAQ:ELEV) is currently developing its lead product known as EO-3021, which is an antibody-drug conjugate being developed to fight against specific kinds of cancer such as gastric cancer or gastroesophageal junction cancer. Furthermore, the company is advancing its pipeline with the nomination of poziotinib for FDA approval. If poziotinib advances to the FDA’s final approval, it could become a unique treatment for a specific type of bladder cancer, presenting a massive growth opportunity for the company.
Elevation Oncology’s main products have cleared initial FDA approvals and are showing promising results in their initial research phases, and the company’s next move relies on the final development of these treatments.
10. Invivyd, Inc. (NASDAQ:IVVD)
Share Price (As of January 3): $0.56
Number of Hedge Fund Holders: 16
Headquartered in Waltham, Massachusetts, Invivyd, Inc. (NASDAQ:IVVD) is a commercial-stage biopharmaceutical company. The company is engaged in the discovery, development, and commercialization of antibody-based solutions for infectious diseases in the US. The company is currently focused on COVID-19 and influenza treatments.
Invivyd, Inc.’s (NASDAQ:IVVD) most successful find has been its pemivibart injection, developed for the viral infection COVID-19. Also known as PEMGRADA, the injection has demonstrated 80% to 90% efficacy in reducing the symptomatic risk of COVID-19 in clinical trials. PEMGRADA has already obtained FDA approval and the company is working on another COVID-19 candidate known as VYD2311. Moreover, the company is advancing in the discovery stage of candidates for the prevention of seasonal influenza. The company has enough inventory of PEMGARDA, which positions it to meet the demand for future sales without immediate manufacturing expenses.
During the third quarter of 2024, the company generated a net product revenue of $9.3 million, driven by the sale of pemivibart. Invivyd expects to turn profitable by mid-2025, driven by existing cash reserves and operational efficiency improvements. By the end of Q3, the company had $107 million in cash and cash equivalents.
To further strengthen its business, Invivyd, Inc. (NASDAQ:IVVD) is expanding its commercial endeavors through collaborations with infusion centers. In addition to that, the company is also developing a digital presence to enhance its service for the immunocompromised community.
9. BARK, Inc. (NYSE:BARK)
Share Price (As of January 3): $1.97
Number of Hedge Fund Holders: 17
BARK, Inc. (NYSE:BARK) is a dog-centric company that has developed itself as a leading global omnichannel dog brand. The company serves across two major categories: toys & accessories and consumables. The Company’s segments include direct-to-consumer and commerce, and the majority of its sales rely on the direct-to-consumer segment.
BARK, Inc. (NYSE:BARK) also offers subscription-based products, BarkBox and Super Chewer, that feature monthly themed boxes of BARK toys and treats – delivered directly to a dog’s home. The company offers various products including kibble, treats, toppers, and dental, among others. Whereas, the toys category provides products such as beds, leashes, apparel, and other miscellaneous products, adding further to the company’s revenue.
BARK, Inc. is making strategic moves to overcome unprofitability and improve its market position. On December 5, the company announced the expansion of BARK Air, the world’s first air travel service for dogs and dog parents. The service is available through direct air carrier Air Wisconsin to explore trial flights on larger planes between New York City and Miami/Fort Lauderdale. BARK has recently launched its BarkBox in retail via Target, targeting to expand its consumer reach and increase sales.
During the second quarter of FY25, the company managed to contract its net loss by 49.1% year-over-year to $5.3 million, while the revenue increased by 2.5% year-over-year to $126.1 million. Furthermore, the company experienced the ninth consecutive quarter of year-over-year Adjusted EBITDA growth during Q2, driven mainly by a 26% increase in its commerce segment revenue.
8. Karyopharm Therapeutics Inc. (NASDAQ:KPTI)
Share Price (As of January 3): $0.78
Number of Hedge Fund Holders: 19
Karyopharm Therapeutics Inc. (NASDAQ:KPTI) is a commercial-stage pharmaceutical company, focused on the discovery, development, and commercialization of drugs for the treatment of cancer and other diseases. The company is developing and commercializing small molecule Selective Inhibitors of Nuclear Export (SINE) compounds that help block cancer cells and stop them from growing.
XPOVIO or selinexor is the lead product of Karyopharm Therapeutics Inc. (NASDAQ:KPTI), which helps in the treatment of adult patients with plasma cells that cause cancer. Similar to selinexor, the company is working on an oral SINE compound, eltanexor, which will potentially add to the company’s sales.
Karyopharm Therapeutics Inc. (NASDAQ:KPTI) achieved its third consecutive quarter of net product revenue growth during the third quarter of 2024. The net US XPOVIO revenue sustained its growth from a year ago and posted $29.5 million for Q3. Whereas, the net revenue reached $38.8 million in Q3, up from $36 million from a year ago. The strong commercial performance of XPOVIO has been a key contributor for Karyopharm. Moreover, the company has expanded its reimbursement and regulatory approvals for its lead assets in Italy and France. With further developments of its candidates in ongoing phase three studies, Karyopharm Therapeutics Inc. (NASDAQ:KPTI) looks like a solid penny stock to invest in.
7. NIO Inc. (NYSE:NIO)
Share Price (As of January 3): $4.63
Number of Hedge Fund Holders: 20
NIO Inc. (NYSE:NIO) is one of the leading Chinese EV makers. The company specializes in premium smart EVs and is known for its battery-swapping technology and Battery-as-a-service (BaaS) model. The company’s well-known EV models sold in the market include ES8, ES6, EC6, and ET7.
The company’s financial performance is improving. During Q3 2024, NIO Inc.’s (NYSE:NIO) vehicle margin rose to 13.1%, up from 11% in Q3 2023, which reflects better component costs and operational efficiencies. During the third quarter, NIO achieved a quarterly record with 61,855 vehicle deliveries, marking an 11.6% growth year-over-year. The NIO brand alone accounted for 61,023 deliveries, maintaining its battery electric vehicle market share of 48%. NIO recently launched its mass-market brand ONVO, which has begun selling vehicles and targets the mainstream family market.
NIO Inc. (NYSE:NIO) plans to begin the production of its flagship model, the ET9, in March 2025. This vehicle is expected to reinforce NIO’s premium image and attract more customers. NIO Inc.’s improved financial outcomes and focus on profitability make it a promising EV stock. To learn more about small-cap EV stocks, you can visit 11 Small-Cap EV Stocks to Invest In.
6. Nektar Therapeutics (NASDAQ:NKTR)
Share Price (As of January 3): $1.10
Number of Hedge Fund Holders: 20
Nektar Therapeutics (NASDAQ:NKTR) is a clinical-stage biotechnology firm. The company’s major focus is on the development of treatments that fight against immunological dysfunction in autoimmune and chronic inflammatory diseases. The company’s oncology segment is developing medicines based on targeting biological pathways to treat cancer patients.
Nektar Therapeutics’ (NASDAQ:NKTR) lead product candidate focused on immunology and inflammation, rezpegaldesleukin, is making significant progress in its clinical trials. The Phase 2 study of rezpegaldesleukin is underway with its top-line data results expected in the first half of 2025. The company’s lead oncology candidate, Nektar 255, has also shown promising results in treating radiation-induced lymphopenia patients.
In a strategic move, Nektar Therapeutics has liquidated its manufacturing facility to streamline operations and improve its financial position. The divestiture of its manufacturing facility will allow the company’s cash runway into Q4 of 2026. By the end of Q3 2024, the company had $249 million in cash and investments with zero debt.
5. Tetra Technologies, Inc. (NYSE:TTI)
Share Price (As of January 3): $3.83
Number of Hedge Fund Holders: 24
Tetra Technologies, Inc. (NYSE:TTI) is an energy services and solutions company with a focus on bromine-based completion fluids, calcium chloride, water management solutions, frac flowback, and production well-testing services. The company operates through two segments including the Completion Fluids & Products Division and the Water & Flowback Services Division. Both of the segments equally add to the company’s revenue.
The Completion Fluids & Products Division manufactures clear brine fluids, and other associated products and sells them to oil and gas companies in the US, the Middle East, Africa, and certain countries in Latin America. Recently, Tetra Technologies achieved a major Deepwater Completion Fluid Award in Brazil, solidifying its position as a leader in the region’s deepwater heavy fluids market.
Tetra Technologies, Inc.’s (NYSE:TTI) revenue is down from last year as it posted $142 million in Q3, a decline of 6% year-over-year. Amidst the challenging period, the company’s completion fluids and products and water and flowback services achieved adjusted EBITDA margins of 31.7% and 14.6%, respectively. The improvements in EBITDA margins reflect strong operational efficiency. During Q3, the company set a record for produced water recycling for frac reuse, indicating the company’s ability in the industry and its commitment to sustainable practices.
The company is advancing its strategic initiatives by introducing Tetra X and TETRA Oasis TDS. Textra X is a new corrosion inhibitor for high-temperature downhole well environments, while Oasis TDS serves the oil and gas industry by helping mineral extraction. Tetra Technologies, Inc. (NYSE:TTI) continues to boost its portfolio backed by total cash of $48.26 million.
4. Applied Therapeutics, Inc. (NASDAQ:APLT)
Share Price (As of January 3): $0.94
Number of Hedge Fund Holders: 24
Applied Therapeutics, Inc. (NASDAQ:APLT) is a clinical-stage biopharmaceutical firm that is focused on developing a pipeline of novel drug candidates to fight validated molecular targets in indications of high unmet medical need.
Applied Therapeutics, Inc.’s (NASDAQ:APLT) lead drug candidate, govorestat, recently received a rejection from the FDA, as the regulator spotted issues with the New Drug Application (NDA). Govorestat is being developed to cure patients suffering from central nervous system rare metabolic diseases such as Galactosemia, Sorbitol Dehydrogenase Deficiency, and PMM2-CDG.
The company is set to review the potential causes of the FDA decline and submit the NDA by next year. Applied Therapeutics is also working on AT-001 for the treatment of fatal fibrosis of the heart and has completed the third phase trials. Applied Therapeutics, Inc. (NASDAQ:APLT) is yet to make a major development to inspire long-term confidence among investors. A notable number of hedge funds hold a stake in APLT as one key development can make a big move for the company.
3. Gossamer Bio, Inc. (NASDAQ:GOSS)
Share Price (As of January 3): $1.02
Number of Hedge Fund Holders: 28
Gossamer Bio, Inc. (NASDAQ:GOSS) is a clinical-stage biopharmaceutical company. The company is engaged in the development and commercialization of seralutinib for the treatment of pulmonary arterial hypertension (PAH), a type of high blood pressure in the lungs. The company is focused on treatments in the disease areas of immunology, inflammation, and oncology.
Gossamer Bio, Inc.’s (NASDAQ:GOSS) product candidate Seralutinib, GB002, is an investigational treatment for pulmonary arterial hypertension. GB002 is currently under phase three clinical trials and the company expects to commence a global registrational phase three clinical trial of seralutinib. The company also anticipates phase 3 PROSERA Study results in PAH in 2025.
Gossamer Bio, Inc. (NASDAQ:GOSS) has a solid financial position to carry its R&D through 2027, backed by cash and cash equivalents of $327 million, as of Q3 2024. The plus point for Gossamer is its revenue generation from the sale of licenses and contracts with collaborators. In Q3, the company generated $9.5 million in revenue, driven by its R&D contract with an Italian pharmaceutical firm, Chiesi.
2. Marqeta, Inc. (NASDAQ:MQ)
Share Price (As of January 3): $3.86
Number of Hedge Fund Holders: 33
Marqeta, Inc. (NASDAQ:MQ) is an innovative card issuer that empowers businesses to issue and process virtual, physical, and tokenized credit and debit cards. The company offers a modern cloud-based open application programming interface platform for card issuing and transaction processing. The company operates two business segments: Managed By Marqeta and Powered By Marqeta. The company’s major clients include platforms such as Square, DoorDash, and Instacart. Marqeta also offers Buy Now Pay Later (BNPL), neobanking, on-demand delivery, expense management as well as crypto payment solutions.
Marqeta, Inc. (NASDAQ:MQ) is making solid progress with increasing revenue and expanding its product offerings. In Q3, the company posted an 18% year-over-year revenue increase, while gross profit margin reached 70%. Marqeta’s expanding product pipeline includes solutions such as Portfolio Migration, Marqeta Flex, and UX Toolkit. These new offerings and products will enhance the company’s competitive position and drive growth in the embedded finance market.
Marqeta, Inc. (NASDAQ:MQ) is focused on reducing complexity and minimizing disruption to attract more clients. During the third quarter, the company completed the migration of millions of Klarna cards across Sweden, Germany, and the U.K., marking significant progress in the global market. The Block contract renewal was another major development in the past quarter.
The company’s latest product Marqeta Flex is set to launch in mid-2025 and the company is currently working on gaining interest from customers and partners to scale this new service. Marqeta Flex will integrate BNPL payment options directly into payment apps and wallets. To support its BNPL payment network, Marqeta is working in collaboration with well-known BNPL providers including Klarna, Affirm, and Branch.
1. Grab Holdings Limited (NASDAQ:GRAB)
Share Price (As of January 3): $4.81
Number of Hedge Fund Holders: 39
Grab Holdings Limited (NASDAQ:GRAB) operates a leading Southeast Asian super app that offers a wide range of on-demand services, including ride-hailing, food delivery, and financial services. In 2018, the company acquired Uber’s Southeast Asian operations, confirming its position as the market leader in the region. Grab has operations in multiple countries including Singapore, Malaysia, Thailand, Vietnam, and Indonesia.
Grab Holdings Limited (NASDAQ:GRAB) is using AI and machine learning to enhance its route optimization and demand prediction. This has helped in improving user experience, optimizing logistics, and reducing operational costs. As a result, service efficiency and customer satisfaction have significantly improved, driving higher user retention and more frequent app usage.
In addition to that, Grab Holdings Limited is exploring one of the prominent growth areas in the region through its Digital Financial Services division. Southeast Asia presents a vast market opportunity for the company to cover financial services as the region is home to a notable unbanked population. Moreover, the financial services could be used for its other offerings such as ride-hailing and food delivery services. During the third quarter, the company posted revenue of $716 million, up by 16% year-over-year, while the net income was $26 million compared to a loss of $91 million in Q3 2023.
While we acknowledge the potential of Grab Holdings Limited (NASDAQ:GRAB) to grow, 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 GRAB but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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