7 Best Stocks Under $1 With Huge Potential

Stocks priced under $1 offer the potential for high returns, making them attractive to traders looking for quick gains. These low-priced stocks are highly volatile, which can lead to significant opportunities but also substantial risks. 

Here’s what traders should look for in a penny stock to watch:

• Market Trends: Stocks aligning with emerging trends and hot sectors have higher growth potential.
• Financial Health: Companies with strong financials and sales metrics are better positioned for long-term success or at least won’t fold overnight.
• Innovation in Technology: Hot technology products and services generate news, and news is good.
• Stock Catalysts: News, product launches, earnings reports, and 52-week highs are key.
• Volatility: Stocks with high volatility offer more trading opportunities, especially when their trading volume is decent.
• Market Potential: Evaluate the company’s potential to capture market share.

Upcoming market events, such as product launches or industry advancements, can significantly impact these stocks. Keeping an eye on these catalysts can help you capitalize on their growth potential.

Stocks priced under 50 cents can be even better at running — but they’ll test your discipline even more than $1 stocks! These affordable stocks don’t belong in your portfolio — but they can give you exposure to some of the best opportunities in the market. My watchlist of the best penny stocks under 50 cents has some of the penny stocks I’m watching the closest right now.

Best Stocks Under $1 to Buy in 2025

To find the best stocks to buy under $1 in 2025 requires a top-level stock screener. I use the one in StocksToTrade — it has all the tools and customizations that traders like me look for to create hot penny stock watchlists.

Try StocksToTrade for 14 days and see how it helps your watchlist skills — only $7!

To find watch-worthy penny stocks under $1, I input the following criteria:

• Last Price ≤ $1
• Last Price ≥ $0.25
• Volume ≥ 100,000
• Number of Trades ≥ 100

When I run this screen and sort by today’s biggest gainers, it gives me the following top results:

You can see how the plan with micro-cap stocks is rarely buy-and-hold…

Trading these speculative stocks should be approached with a clear strategy and an understanding of the risks involved. I have NO plans to trade these stocks unless they fit my preferred setups. This is only a watchlist.

The best traders watch more than they trade. That’s what I’m trying to model in this article. Pay attention to the work that goes in, not the picks that come out.

Sign up for my NO-COST weekly watchlist to get my latest picks!

Here’s what I’m watching now:

PLUS THERAPEUTICS Inc. [NASDAQ: PSTV]

Plus Therapeutics Inc is a clinical-stage pharmaceutical company. The company focused on the discovery, development, and delivery of complex and innovative treatments for patients battling cancer and rare diseases.

AEON Biopharma Inc. Class A [AMEX: AEON]

AEON Biopharma, Inc. is a bio-pharmaceutical company. The Company is focused on developing ABP-450 (prabotulinumtoxinA) injection for the treatment of debilitating medical conditions with an initial focus on the neurology and gastroenterology markets.

ABP-450 contains a 900 kDa botulinum toxin type-A complex produced by the bacterium clostridium botulinum. The active part of the botulinum toxin is the 150 kDa component, and the remaining 750 kDa of the complex is made up of accessory proteins. When injected at therapeutic levels, ABP-450 blocks peripheral acetylcholine release at presynaptic cholinergic nerve terminals by cleaving SNAP-25, a protein integral to the docking and release of acetylcholine from vesicles situated within the nerve endings leading to denervation and relaxation of the muscle. It is also engaged in the Phase Il clinical study of ABP-450 for the treatment of cervical dystonia. Cervical dystonia, also known as spasmodic torticollis, is a neurological condition.

Gold Resource Corporation [AMEX: GORO]

Gold Resource Corp is a gold and silver producer, developer and explorer with operations in Oaxaca, Mexico and Nevada, USA. It targets low capital expenditure projects with potential for generating high returns on capital. The Company offers its shareholders the option to convert their cash dividends into physical gold and silver and take delivery.

Bit Origin Limited [NASDAQ: BTOG]

Bit Origin Ltd, through its subsidiaries, engages in the cryptocurrency mining business in the United States. It is also involved in deploying blockchain technologies. The company was formerly known as China Xiangtai Food Co., Ltd. and changed its name to Bit Origin Ltd in April 2022. Bit Origin Ltd was incorporated in 2018 and is based in New York, New York.

Phoenix Motor Inc. [NASDAQ: PEV]

Phoenix Motor Inc designs, assembles, and integrates electric drive systems and light and medium-duty electric vehicles (EVs) and markets and sells electric vehicle chargers for the commercial and residential markets. The Company operates two primary brands, Phoenix Motorcars focused on commercial products including medium-duty electric vehicles, chargers, and electric forklifts, and EdisonFuture which intends to offer light-duty electric vehicles.

ChargePoint Holdings Inc. [NYSE: CHPT]

ChargePoint designs, develops, and markets networked electric vehicle charging system infrastructure and cloud-based services that enable consumers to locate, reserve, and authenticate EV charging. The company’s hardware product lineup includes solutions across home, commercial, and fast-charging applications. ChargePoint derives the majority of its revenue from the United States.

Tilray Brands Inc. [NASDAQ: TLRY]

Tilray is a Canadian producer that cultivates and sells medical and recreational cannabis. In 2021, legacy Aphria acquired legacy Tilray in a reverse merger and renamed itself Tilray. The bulk of its sales are in Canada and in the international medical cannabis export market. U.S. exposure consists of CBD products through Manitoba Harvest and beer through SweetWater.

Step-by-Step Guide on How to Invest in Stocks Under $1

Selecting and purchasing penny stocks requires a strategic approach. Here’s a step-by-step guide:

1. Find a Broker: Set up your trading account, ensuring you understand the broker’s tools and fees. Make sure that your broker lets you trade ALL penny stocks — Robinhood, Webull, and many other brokers limit OTC stock market participation.

OTC stock exchanges are where you’ll find the cheapest penny stocks on the market, like those under 10 cents. These ultra-low-priced stocks can be highly volatile and offer substantial upside potential for traders who can navigate the risks effectively. Monitoring these stocks requires a hell of a lot of discipline — these small-cap stocks are not a bargain if they blow up your account! My 10 cent penny stock watchlist has the stocks that I’m watching the closest.

1. Fund Your Account: Deposit funds into your account, keeping in mind the amount you’re willing to risk.
2. Choose a Trading Platform: Select a reliable platform for trading penny stocks — my choice is StocksToTrade.
3. Screen for Stocks: Use stock screeners to filter stocks under $1 based on your criteria.
4. Research Stocks: Analyze the stock’s financial health, market trends, and news.
5. Place a Trade: Execute your trade, setting stop-loss orders to manage risk.

Due diligence is crucial when trading penny stocks. Here’s how to perform it:

• Financial Statements: Review balance sheets, income statements, and cash flow reports.
• Company News: Stay updated with the latest news and press releases.
• Analyst Ratings: Check ratings and recommendations from trusted analysts.
• Trading Volume: Ensure the stock has sufficient volume for liquidity.

Risks and Considerations Investing in Penny Stocks

Investing in penny stocks comes with significant risks — that’s why I tell my students never to invest in them, only trade them. The high volatility of these stocks can lead to quick gains, but it also means prices can plummet rapidly. Many penny stocks are from companies with uncertain futures, making thorough research essential.

Legit stock exchanges like the NYSE and Nasdaq will delist stocks trading under a dollar, and Wall Street tends to stay away — the guys with the best insights and most trading profits think these stocks are just too unpredictable! That doesn’t mean that you should stay away, but you should be content with small share price increases and trade safely!

That means limiting your risks — here’s how:

• Set a Budget: Only invest money you can afford to lose.
• Cut Losses Quickly: Protect your account by setting limits on losses.
• Double Down on Analysis: Regularly monitor news and developments related to your stocks.

Volatility and Market Risks

Penny stocks are notorious for their high volatility. This volatility can create trading opportunities but also poses significant risks. Share prices can swing dramatically within short periods, influenced by factors such as market trends, company news, and investor sentiment.

You can manage volatility at the shallow end of the market cap by doing the following:

• Set Stop-Loss Orders: Automatically sell a stock when it reaches a certain price to limit losses.
• Monitor Trading Volume: High trading volume indicates liquidity, making it easier to enter and exit positions.
• Stay Informed: Keep track of news and market trends affecting your stocks.

Potential for Fraud and Scams

Penny stocks are often targets for fraud and scams, particularly pump-and-dump schemes. In these scams, promoters say that a stock is undervalued to attract investors and then sell off their shares at the peak, leaving other investors with significant losses.

To avoid scams, follow these guidelines:

• Research the Company: Ensure the company has legitimate business operations.
• Verify News Sources: Only trust information from reputable sources.
• Beware of Hype: Be cautious of overly optimistic promotions and unsolicited stock tips.
• Check Regulatory Filings: Look for filings with the SEC to ensure transparency.

Liquidity Issues

Liquidity refers to how easily you can buy or sell a stock without affecting its price. Penny stocks often have low liquidity, making it challenging to enter or exit positions quickly. Low liquidity can lead to significant price changes with relatively small trades.

Assessing liquidity before investing is crucial:

• Check Trading Volume: Higher trading volume indicates better liquidity.
• Use Stock Screeners: Filter stocks based on average trading volume.
• Monitor Bid-Ask Spread: A narrow spread indicates better liquidity.

Regulatory Risks

The regulatory landscape for penny stocks can be complex. The SEC imposes specific rules to protect investors, but enforcement can be inconsistent. Recent changes in regulations can impact the trading and profitability of penny stocks.

Here are some key points on regulatory risks:

• SEC Rules: Familiarize yourself with SEC regulations on penny stocks.
• Recent Changes: Stay updated on new rules and changes affecting penny stocks.
• Compliance: Ensure the companies you invest in comply with all regulatory requirements.

Criteria for Selecting the Best Stocks Under $1

Selecting the best penny stocks requires careful evaluation and risk management. Look for stocks with strong potential for growth and manageable risks. Key criteria include financial health, market trends, and company fundamentals.

Here are specific factors to consider:

• Revenue Growth: Look for consistent revenue increases.
• Debt Levels: High debt can be a red flag.
• Profitability: Positive earnings and profit margins are good indicators.
• Market Position: Companies with a competitive edge in their industry.

Company Fundamentals

Analyzing a company’s fundamentals is essential for evaluating its long-term potential. Strong fundamentals can indicate a company’s ability to grow and withstand market challenges. This includes financial metrics and business strategies.

Key financial metrics to review:

• Revenue Growth: Consistent increases in revenue.
• Debt Levels: Manageable debt ratios.
• Profitability: Positive net income and profit margins.
• Cash Flow: Strong cash flow indicates financial stability.
• Market Capitalization: Micro-cap stocks move differently than stocks with higher market caps — know which you’re dealing with!

Market Trends and Industry Outlook

Market trends significantly influence penny stock prices. Stocks in trending sectors often have higher growth potential — penny stocks in AI, energy, precious metals, gold, crypto, and new technologies are always hot! Understanding industry-specific factors helps identify opportunities and risks.

Here’s your hot sector checklist:

• Industry Growth: Sectors with rapid growth offer more opportunities.
• Technological Advancements: Innovations can drive stock prices.
• Regulatory Changes: New regulations can impact industry dynamics.

Trading Volume and Liquidity

Trading volume is the biggest factor in penny stock trading. It indicates the stock’s liquidity, affecting how easily you can buy or sell shares. High trading volume usually means better liquidity and less price manipulation.

Interpreting trading volume data:

• Average Volume: Compare the stock’s volume to its average daily volume.
• Volume Spikes: Sudden increases in volume can signal significant news.
• Liquidity Indicators: Stocks with consistent high volume are generally more liquid.

Recent News and Developments

Staying updated with recent news and developments is vital for penny stock traders. News can significantly impact stock prices, providing opportunities for informed trading decisions. Keeping track of company announcements and industry trends helps anticipate market movements.

Tips for leveraging news:

• Follow Reputable Sources: Use reliable news outlets and financial websites.
• Set Alerts: Use tools to get notifications about news related to your stocks.
• Analyze Impact: Consider how news affects the company’s fundamentals and market perception.

Financial Health and Stability

Financial health indicators are crucial for assessing a company’s stability and growth potential. Strong financials suggest that a company can weather market fluctuations and continue to grow. Key indicators include financial ratios and cash reserves.

Of course, no penny stock is going to have financials that are actually strong — but you want to know the difference between a stock that is truly worthless and one you can hold overnight!

Here are the basics:

• Current Ratio: Measures liquidity and short-term financial health.
• Debt-to-Equity Ratio: Indicates financial leverage and risk.
• Return on Equity (ROE): Shows how effectively a company uses its equity to generate profit.
• Earnings Per Share (EPS): Reflects the company’s profitability on a per-share basis.

Frequently Asked Questions

Are Stocks Under $1 Safe Investments?

Stocks under $1 are generally high-risk investments. They often belong to companies with uncertain financial health and high volatility in their share price. These stocks can offer significant returns but also come with the risk of BIG losses. You need to trade these stocks with a clear strategy and thorough research.

Can You Make Money With Penny Stocks?

Yes, it’s possible to make money with penny stocks, but it requires careful planning and risk management. High returns are possible due to the significant price movements of these stocks. However, success stories are less common, and most traders lose. Always approach penny stock trading with caution and a well-defined strategy.

Should Beginners Invest in Penny Stocks?

Beginners should be cautious when considering penny stocks. Investing is the first mistake that beginners make. Never invest, only trade these stocks under the guidance of a good trading plan!