We recently compiled a list of the 7 Best Rising Penny Stocks To Invest In Now. In this article, we are going to take a look at where TeraWulf Inc. (NASDAQ:WULF) stands against the other rising penny stocks.
Fed’s Rate Cut Sets the Stage for a Strong Q4
In an episode of Market Storylines on the Inside the Icehouse Podcast feed by Intercontinental Exchange, Jay Woods, Chief Global Strategist at Freedom Capital Markets, discussed Fed rate cuts and the Q4 outlook. Woods discussed the latest Fed rate cut and said that the market absorbed the rate cuts quite positively, with the S&P 500 reaching new all-time highs.
Woods mentioned that, historically, when markets hit new highs in September, the fourth quarter tends to perform well, especially in election years. As the fourth quarter approaches, he highlighted that sectors such as real estate, utilities, and industrials have led the market in the third quarter, while technology has lagged. However, it may rebound in Q4.
Woods also emphasized the importance of upcoming economic data, including the ISM manufacturing report, jobless claims, and the U.S. unemployment report, which will give insight into the labor market and the potential impact of the rate cuts.
Small and Mid-Cap Stocks Set for Major Gains
Ryan Dietrich, Chief Market Strategist at Carson Group, joined Yahoo Finance for an interview on September 29, where he expressed optimism about the stock market’s future. He believes the rate cut was necessary and should have been smaller earlier.
He mentioned that the labor market is showing signs of slowing, with initial jobless claims at a four-month low, and forward earnings for the S&P 500 improving. However, he does not foresee a recession.
Dietrich highlighted that historically, rate cuts near market highs have been followed by strong market performance, with an average annual return of around 14%. He thinks the broader market could see 12-15% gains in the next year, while small and mid-cap stocks might outperform with over 20% returns. His firm is especially focused on mid-cap stocks, which tend to perform well after rate cuts.
While the upcoming election may cause some volatility, especially in October, Dietrich remains confident that markets will stabilize afterward, as they usually react better once uncertainty passes. He expects a strong end-of-year rally and advises investors to remain diversified and take advantage of any market weakness.
Our Methodology
For this article, we used stock screeners to identify over 60 stocks under $5 with a 1-month share price gain of over 10%, as of September 30. The best rising penny stocks are listed in ascending order of their hedge fund sentiment, which was taken from Insider Monkey’s database of over 900 elite hedge funds.
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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
20 Most Competitive Economies In The World
TeraWulf Inc. (NASDAQ:WULF)
1-Month Stock Price Performance: 29.32%
Number of Hedge Fund Holders: 37
Topping our list of best rising penny stocks is TeraWulf Inc. (NASDAQ:WULF), a digital asset technology company. It is focused on the operation of Bitcoin mining facilities in the United States.
The company has facilities in New York and Pennsylvania. It runs its own mining operations and offers hosting services to third-party clients. The infrastructure it has developed is significant as it features 600 megawatts of owned and scalable resources that support both current Bitcoin mining and the possibility of future expansion into alternative computing hosting.
37 hedge funds tracked by Insider Monkey held positions in the stock valued at $227.158 million in the second quarter.
On September 4, Needham analyst John Todaro initiated coverage of the stock with a Buy rating and a $6 price target. According to Todaro, the company is positioned to be an early entrant in bringing online high-performance computing (HPC) facilities exceeding 100 megawatts.
It could be a game changer, as HPC is expected to grow rapidly, providing an attractive and stable margin business for miners who have excess power capacity. The forecasted revenue for the company in 2026 is striking, with projections of $610 million, of which $350 million could stem from HPC.
In a recent update for August, TeraWulf (NASDAQ:WULF) reported mining 184 Bitcoins, averaging about 5.9 Bitcoins daily. The output reflects a 100% year-over-year increase in self-mining capacity, which now stands at around 10.0 exahashes per second (EH/s).
The company operates two key facilities, the Lake Mariner site with 195 megawatts, and the Nautilus Cryptomine Facility, which has 50 megawatts. Its operational hash rate averaged 8.2 EH/s in August, which shows effective demand response strategies and performance optimizations designed to enhance profitability.
Overall WULF ranks 1st on our list of the rising penny stocks to invest in now. While we acknowledge the potential of WULF 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 WULF but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.