People looking to enter the stock market with limited capital can consider investing in penny stocks. These stocks trade for less than $5 per share and offer high returns. That said, the risk is high, so it’s important to research well and add the right options to the portfolio. Those who have never invested in penny stocks can consult stock market analysts. The experts can help one pick stocks with a strong growth potential.
Taboola.com (TBLA)
Market Cap: $1.23B
Sector: Communication services
YTD performance: −14.88%
Taboola is a popular online content and advertising company that connects advertisers with digital property owners. It focuses on the open web market (digital properties beyond closed-off platforms like Google). As per Taboola, the open web market is worth more than $80 billion.
Taboola’s recommendation engine uses deep learning and artificial intelligence technology. The company works with a broad network of advertisers to meet its target of reaching millions of users daily. It is known to have partnered with Yahoo, which is a major source of its revenue.
Taboola is a great penny stock because it has seen steady revenue growth in the last few quarters. It also uses an AI bidding tech suite to generate substantial revenue and has partnered with reputed and recognized brands. The company’s innovative solutions, combined with its strong industry relationships, contribute toward its high-growth potential.
iQIYI Inc. (IQ)
Market Cap: $2.32B
Sector: Communication services
YTD performance: −49.16%
Owned by Baidu, iQIYI is a streaming service that allows users to stream content from different countries in Asia. Customers can buy a subscription or stream content for free when using the platform. The free option provides lower-resolution content. But by paying for the subscription, users get high-quality video, plus benefits like Ad skips and access to multiple devices simultaneously.
iQIYI is a popular penny stock because it has earned consistent profits. The platform ranked at the top in China’s drama viewership for three years in a row. It even had seven of the most-watched dramas of 2023. The company is now venturing into many upcoming technologies like artificial intelligence and has shifted its strategy towards long-term membership revenue, which experts say is a positive development.
Navitas Semiconductor Corp. (NVTS)
Market Cap: $469.65M
Sector: Technology
YTD performance: −67.68%
This company develops gallium nitride ultra-efficient semiconductors. Its aim is to encourage industries to give up silicon chips and transition to gallium nitride for power applications in data centers, fast mobile chargers, and consumer electronics.
In recent quarters, Navitas has shown impressive growth. The company claims customers have responded positively to its new technologies, like the GaNSlim products. That said, it has not been profitable consistently and demands periodic capital infusions. Even then, it is a great penny stock because the semiconductor market has growth potential. Also, the company has acquired new contracts with AI-focused data center customers.
Archer Aviation Inc. (ACHR)
Market Cap: $1.29B
Sector: Industrials
YTD performance: −47.01%
ACHR produces and develops eVTOLs (electric vertical takeoff and landing aircraft). Its Midnight aircraft is a four-passenger, piloted eVTOL that performs many back-to-back, short flights with low charge times in between. Archer believes this aircraft could eventually help people reduce urban commute time from 60-90 minutes to 10-20 minutes. Earlier this year, the company announced that it received a certification from the Federal Aviation Administration, enabling it to run a commercial airline. Archer also announced it struck a deal with the Abu Dhabi Investment Office, which will help improve the UAE’s commercial air taxi operations.
There are several reasons to consider investing in Archer Aviation. Firstly, the FAA’s approval to operate commercial airlines will help the company earn more money. Its partnerships with Stellantis, United Airlines, and others will also be profitable for investors. Further, a dual strategy for selling aircraft directly and offering air taxi services will bring a surge in returns. That said, investors must remember that while Archer has maintained excellent cash liquidity, it has yet to be profitable.
Those looking to invest in penny stocks will find several options in the stock market. But not all of them will provide the same return. To make the investment more financially rewarding, one must research well and speak to others who have already put their money in penny stocks. Speaking to other investors and researching market trends can help one make a more informed decision. One should also consider diversifying their portfolio by purchasing penny stocks of different companies across industries to lower the risk of a loss.