Penny stocks are great for building a small account—as long as you know how to plan for their many risks. With Robinhood’s commission-free trading and simple interface, it remains a popular platform for trading these volatile stocks.
Without a plan, traders risk getting caught chasing hype rather than making strategic trades. That’s OK for us—we’re going to build trading plans and get ready to capitalize on their opportunities. Here’s what I’m watching this month…
3 Robinhood Penny Stocks to Watch in February 2025
My top 3 Robinhood penny stocks to watch in February 2025 are:
- NASDAQ: ACB — Aurora Cannabis Inc — The Cannabis Penny Stock That Nailed Earnings
- NASDAQ: PLTR — Palantir Technologies Inc — The Hottest Stock in the Market
- NASDAQ: RCAT — Red Cat Holdings Inc — The Palantir Sympathy Play Drone Stock
Check out my complete Robinhood penny stock watchlist here!
| Stock Ticker | Company | Performance (YTD) |
| NASDAQ: ACB | Aurora Cannabis Inc | + 34.00% |
| NASDAQ: PLTR | Palantir Technologies Inc | + 43.94% |
| NASDAQ: RCAT | Red Cat Holdings Inc | – 9.56% |
Before you send in your orders, take note: 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 here. Pay attention to the work that goes in, not the picks that come out.
Let’s get to the picks…
Aurora Cannabis Inc. (NASDAQ: ACB) — The Cannabis Penny Stock That Nailed Earnings
Aurora Cannabis saw a major breakout after reporting a strong earnings beat, pushing its stock up more than 50% in a single session.
Key Catalysts:
- Third-quarter revenue surged 37% year-over-year to $88.1 million.
- Adjusted EBITDA jumped 316%, significantly exceeding expectations.
- Secured a $27 million supply agreement with SNDL Inc (NASDAQ: SNDL), a Robinhood favorite with a history of meme-driven spikes.
Aurora has had its ups and downs, with massive spikes during past cannabis booms followed by long periods of decline. With this earnings beat and renewed momentum, traders are watching to see if the stock has more upside.
Trading outlook: If volume remains strong and the stock consolidates above key support levels, it could present dip-buying opportunities. However, given the sector’s history of sharp pullbacks, risk management is essential.
Palantir Technologies Inc. (NASDAQ: PLTR) — The Hottest Stock in the Market
Palantir has been one of the strongest tech stocks in recent months, and after a blowout earnings report, it continues to push higher.
Key Catalysts:
- Q4 2024 revenue grew 36% year-over-year, easily beating estimates.
- The company remains a leader in AI and defense contracts despite concerns about China’s DeepSeek AI and potential U.S. tariffs.
- After joining the S&P 500 in September, the stock has gained increased institutional attention.
While Palantir isn’t a penny stock, it plays a key role in market sentiment. Its movement often impacts smaller AI and defense-related stocks.
Trading outlook: Palantir’s strength could drive sympathy plays in the AI and defense sectors. If it continues to push higher, traders may look at lower-priced stocks in the same space.
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Red Cat Holdings Inc. (NASDAQ: RCAT) — The Palantir Sympathy Play Drone Stock
Red Cat Holdings is a defense-focused drone company that has been on traders’ radar due to its volatility and recent partnership with Palantir.
Key Catalysts:
- In November 2024, the stock surged 380%* before pulling back.
- Announced a partnership with Palantir in December 2024, giving it exposure to the growing AI-driven defense sector. The stock spiked again.
- Strong technical support at $8, which traders are watching for a potential bounce.
RCAT has a history of major spikes when momentum kicks in. With Palantir’s continued strength, traders are watching for a potential sympathy move.
Trading outlook: If volume picks up and the stock holds key support levels, it could provide short-term trading opportunities. However, traders should be cautious of low-volume pullbacks.
* Past performance does not indicate future results
Key Considerations for Trading Penny Stocks on Robinhood
Robinhood makes it easy to trade penny stocks, but it also has limitations. The platform does not offer access to OTC stocks, which means traders are limited to Nasdaq and NYSE-listed penny stocks.
Penny stocks are highly volatile, so it’s important to have a well-defined strategy. Here are a few things to keep in mind:
- Avoid chasing stocks that have already spiked—wait for a proper setup.
- Pay attention to trading volume, as low-volume moves are often unsustainable.
- Have a clear exit strategy with defined stop-loss levels.
How to Find Penny Stocks on Robinhood
Robinhood doesn’t have a built-in penny stock scanner, but you can use these steps to locate stocks under $5:
- Go to Robinhood’s search bar and look for “Trending Lists.”
- Filter by industry or sector and sort by price (low to high).
- Set a maximum share price of $5 to filter for penny stocks.
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Final Thoughts on Robinhood Penny Stocks
These stocks have strong momentum, but that doesn’t mean they are guaranteed winners. Successful trading requires patience, discipline, and a clear strategy.
If you want to improve your trading, join my free daily live trading sessions. I break down real-time trade plans and help traders navigate the market with confidence every day!
What penny stocks are on your watchlist? Leave a comment below!