Insider Monkey spotlights 12 best penny stocks set to skyrocket

Small-cap stocks could benefit from several structural trends in 2026. The segment is expected to be supported by investments in AI infrastructure, as well as localization and upgrades of production facilities, American Century Investments said in a January report. Analysts expect small-cap companies to outpace large-cap peers in earnings per share (EPS) growth in 2026: small-cap EPS is projected to rise 21.8% versus 16.0% for large caps. In 2025, the situation was the opposite, with small-cap EPS up 12.2% versus 13.9% for large caps.

Insider Monkey has identified 12 undervalued penny stocks (trading below $5 per share) with high growth potential.

VinFast Auto (VFS)

The Vietnamese EV manufacturer develops and produces electric cars, scooters, and buses while expanding internationally. In February, the company signed an agreement to supply EVs for a green taxi service in the capital of Congo (DRC), Kinshasa. The stock is held by seven hedge funds, Insider Monkey estimates, according to third-quarter 2025 data (the same is true for all data presented below). Three Wall Street analysts rate the stock “buy” versus a single “hold.” The average target price is $6.38 per share, implying roughly 95% upside versus the closing price on Friday.

Peloton Interactive (PTON)

The fitness company produces premium equipment and operates an online and offline workout platform. In the second quarter of its fiscal 2026, revenue fell 2.58% to $656.5 million as paid subscriptions declined 7% year over year. The management expects subscriber numbers to continue falling amid intensifying competition. Following the earnings report, Argus Research downgraded the stock to “hold” from “buy,” without disclosing a target price. The stock is held by 62 hedge funds. According to MarketWatch data, 11 analysts rate the shares “hold,” eight rate them “buy,” and one “sell.” The average target price is $7.07 per share, implying about 60% upside.

FuboTV (FUBO)

The streaming service, focused on sports, news, and entertainment, positions itself as a cable alternative, offering access to more than 400 channels without long-term contracts. Revenue in the first quarter of its fiscal 2026 (ended December 31) rose 40% year over year to $1.5 billion, supported by subscriber growth and integration with the U.S. streaming service Hulu. The net loss narrowed to $19.1 million versus $38.6 million a year earlier. In early February, Needham cut its target price to $3 from $4.25 per share due to the loss of NBCUniversal sports content but maintained a “buy” rating, citing a positive effect from Disney’s equity stake. The stock is held by 11 hedge funds. According to MarketWatch data, analyst views are split: three “buy,” three “hold,” and one “sell.” The average target price is $3.17 per share, implying 155% upside.

Snap (SNAP)

The technology company operates the Snapchat platform. Fourth-quarter 2025 revenue rose 10% to $1.72 billion, while net income totaled $45 million versus $9 million a year earlier. Monthly active users increased 6%. Investment bank Stifel upgraded the stock to “hold” from “sell” with a $5.50 target price. The 36% decline year to date has reflected slowing audience growth, weakness in the advertising business, and uncertainty around a potential AI partnership, Stifel said. The stock is held by 50 hedge funds. According to MarketWatch data, Wall Street assigns 33 “hold” ratings, 11 “buy,” and three “sell.” The average target price is $8.10 per share, implying about 57% upside.

Grab Holdings (GRAB)

The Southeast Asian superapp offers ride-hailing, food and grocery delivery, and digital financial services. Fourth-quarter revenue rose 19% to $906 million, after which Bernstein reiterated its “buy” rating with a $5.80 target price. The stock is held by 59 hedge funds. According to MarketWatch data, all 27 analysts are upbeat about the outlook for the stock, with 21 “buys” and six “overweights.” The average target price is $6.56 per share, implying nearly 50% upside.

Alvotech (ALVO)

The biotechnology company focuses on developing, manufacturing, and commercializing biosimilars. On February 5, the company reported strong initial results from a clinical trial of AVT80, a biosimilar to Takeda’s Entyvio, used to treat adults with moderate-to-severe ulcerative colitis and Crohn’s disease, which is nearing the end of its patent. Entyvio generated more than $6 billion in cumulative global revenue through fiscal 2025, rising 14% year over year. Alvotech shares are held by 12 hedge funds. According to MarketWatch data, five analysts rate the stock “buy,” one “hold,” and one “sell.” The average target price is $9.02 per share, implying more than 100% upside.

Vizsla Silver (VZLA)

The Canadian company focuses on mineral exploration and development, with its flagship Panuco silver and gold project in Mexico’s Sinaloa state. In late January, a serious security incident occurred at the site involving the kidnapping of 10 workers. On February 10, National Bank downgraded the stock to “sector perform” from “outperform” and cut its target price to CAD6.50 from CAD10.50 per share, citing potential delays to the project timeline stemming from the incident. The stock is held by 15 hedge funds. According to MarketWatch data, analysts assign five “buy” ratings versus one “hold.” The average target price is $6.64 per share, implying roughly 70% upside.

Eve Holding (EVEX)

The company, operating as Eve Air Mobility, develops electric vertical takeoff and landing (eVTOL) aircraft, trains operators, and provides software for urban air traffic management. It has signed a deal with Tokyo-based AirX for up to 50 aircraft. Following this, H.C. Wainwright reiterated its “buy” rating with an $8 target price. The stock is held by 20 hedge funds. According to MarketWatch data, six analysts rate the shares “buy,” while three rate them “hold.” The average target price is $7.25 per share, implying more than 100% upside.

AtaiBeckley (ATAI)

The clinical-stage biopharmaceutical company develops treatments for psychiatric disorders. It has completed its merger with Beckley Psytech and secured rights to BPL-003, a therapy for treatment-resistant depression. The drug received Breakthrough Therapy designation from U.S. regulators, with phase III trials expected in the second quarter of this year. In January, Guggenheim initiated coverage with a “buy” rating and an $11 target price, noting the company’s position among leaders in next-generation psychiatry. The stock is held by 21 hedge funds. According to MarketWatch data, all 13 analysts rate the shares “buy.” The average target price is $12.45 per share, implying roughly 220% upide.

Bitfarms (BITF)

The Canadian company focuses on bitcoin mining and operates server farms. On February 6, the board approved a plan to move operations to the U.S. and create a new legal entity. Earlier in February, KBW downgraded the stock to “hold” as it raised its target price to $3 from $2 per share. The stock is held by 25 hedge funds. Eight analysts rate the shares “buy” versus a single “hold.” The average target price is $5.46 per share, implying roughly 170% upside.

Playtika Holding (PLTK)

The developer and publisher of mobile games such as Slotomania, Bingo Blitz, and June’s Journey generates most of its revenue from in-app purchases of virtual products and digital currency. The company is cutting costs as the industry shifts toward AI and plans to reduce headcount by about 15%. In late January, Citi reiterated its “buy” rating on Playtika with a $7 target price. The stock is held by 27 hedge funds. Analyst sentiment remains cautious, with eight “hold” ratings versus five “buy.” The average target price is $5.79 per share, implying roughly 169% upside.

Aurora Innovation (AUR)

The developer of an autonomous driving platform for trucks and passenger vehicles announced major software updates on February 11, tripling its driverless network of routes. Oppenheimer has reiterated its “outperform” rating on the shares with a $15 per share target price and expects next-generation hardware to be available by the third quarter of fiscal 2026. The stock is held by 39 hedge funds. Five analysts rate the shares “buy” versus four “hold” recommendations. The average target price is $10.46 per share, implying more than 120% upside.