Before we dive into the wild world of tech penny stocks, we’ve got to acknowledge some housekeeping notes. First, we’re dealing with one of the most speculative arenas in the equities space. Yes, these securities may be “cheap” but that doesn’t mean they can’t get any cheaper. Second, high-risk ideas usually come with “administrative” realities, such as wide spreads and low trading volume.
If you’re not aware of the pitfalls, you’ll want to brush up on the things that could go wrong because here’s the deal – they usually do. At the same time, the allure of speculative ideas is that they could also (though rarely) go right. And tech penny stocks in particular command attention because of the underlying innovation. We all love innovation and now we can get it for cheap.
Now, to better ensure that we’re at least jumping out of a perfectly good airplane with a parachute, I’ve filtered out ideas that have at least one Wall Street analyst supporting the bullish thesis. Cynically, if you go splat, you have someone other than me to blame.
On that encouraging note, below are tech penny stocks to buy (but only if your significant other gives the green light).
Aeva Technologies (AEVA)
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A developer of high-performance lidar sensors, Aeva Technologies (NYSE:AEVA) plies its trade in a relevant market – autonomous driving. Indeed, if the company is successful, it could help usher in a radical paradigm shift in mobility and transportation. Of course, that’s a big “if.” In the trailing 52 weeks, AEVA lost a hefty amount of equity value. So, why consider it one of the intriguing tech penny stocks?
For one thing, AEVA has demonstrated significant mobility of its own in the trailing month. With shares priced below a buck, any little catalyst could propel the security skyward. On a more important note, the autonomous vehicle market offers plenty of potential. According to Mordor Intelligence, the ecosystem may be worth $41.1 billion by year’s end.
Even better, by the end of 2029, the segment could hit $114.54 billion. Considering Aeva’s small-capitalization profile, it just needs to grab an appropriate size of the market to jump higher. Just as well, analysts rate shares a unanimous strong buy with an average price target of $2.67.
Beam Global (BEEM)
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Focusing on sustainable solutions, Beam Global (NASDAQ:BEEM) specializes in electric vehicle charging infrastructure. As well, it offers energy storage and outdoor media-related services. Yes, EVs have encountered troubles over the past year or so. With a price war erupting and winter weather causing havoc on drivers, the ecosystem is facing turbulence. Still, BEEM could be one of the tech penny stocks for the long haul.
Generally, the consensus remains that EVs are the future. However, for that future to materialize sometime within our lifetimes, we need robust public infrastructure. Beam could offer a key solution, making it a viable (albeit speculative) prospect. Further, the company represents an infrastructure play. It doesn’t have to deal with the whims of consumer preferences, giving BEEM a clear advantage.
Finally, despite the hefty loss in the market over the past 52 weeks, BEEM gets the nod from analysts: we’re talking a strong buy consensus with five buy ratings and only one hold. Also, the average price target lands at $23, which is closing in on a 4X return potential.
Smith Micro Software (SMSI)
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A developer and marketer of both enterprise and consumer-level software and services, Smith Micro Software (NASDAQ:SMSI) might seem like a relevant prospect. After all, the global software market size reached a valuation of $583.47 billion in 2022. By 2030, the sector could be worth nearly $1.4 trillion. So, it’s good to be in the space but the underlying program must resonate with consumers.
Here’s the problem: so far, SMSI has failed to attract (positive) attention. Just a quick glance at its 52-week chart gives you all the information you need to know. So, without question, it’s one of the most speculative tech penny stocks to consider. At the same time, the price action has been relatively muted since around mid-November last year. With Smith Micro offering innovative wireless security solutions, demand may recover eventually.
That appears to be the thought process behind Wall Street analysts, who rate shares a unanimous strong buy. Additionally, their average price target comes in at $3.50, offering a 4X-plus return potential. Again, it’s super-risky but perhaps worth a shot for the gambler.
Usio (USIO)
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A payment processing and financial solutions provider, Usio (NASDAQ:USIO) helps businesses, nonprofits, and government agencies create and manage prepaid cards for practically any need. Per its website, the company utilizes robust and integrated payment technology for electronic bill presentation and payment, printing, and mailing. In particular, organizations with high-volume needs may find Usio useful.
Interestingly, in the past 52 weeks, USIO hasn’t moved much, which is distinct for tech penny stocks. That said, it collapsed heavily from its prior high of $8 on an average weekly basis, per Google Finance. So, for the daring, there could be an opportunity here. Enticingly, the prepaid card market could see tremendous growth. In 2022, the sector was worth $2.5 trillion. By 2032, Allied Market Research predicts that the ecosystem could hit $14.4 trillion.
Clearly, analysts see the glass half full. At the moment, market experts view USIO as a consensus strong buy with a $7.33 average price target. Not only that, the high-side target lands at a whopping $12.50.
Emcore (EMKR)
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A designer and manufacturer of optical components, Emcore (NASDAQ:EMKR) represents one of the hottest tech penny stocks in my opinion. Primarily, I’m excited because the company could easily move into different directions. For instance, its initiatives in the navigation and control ecosystems could have significant implications in the aerospace and automotive markets.
However, what I’m really excited about is the underlying relevancies for the defense industry. Yes, the space is controversial, no doubt about it. Nevertheless, when we have political leaders willing to upset the established international order, a viable defense network represents the likely only solution. Unfortunately, bullies will bully until they’re hit in the mouth. With Emcore’s specialties in autonomous navigation, EMKR could potentially fly higher.
Still, let’s not get carried away – EMKR represents a gargantuan risk as its 52-week chart shows. However, analysts rate shares a unanimous strong buy with a $2.70 price target. Not only that, the max target clocks in at $5.10. So, if you want to roll the dice, EMRK could get very interesting as one of the tech penny stocks.
Arqit Quantum (ARQQ)
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If we’re reading the tea leaves correctly, then quantum computing will soon become a reality. However, this paradigm shift in technology could also yield significant vulnerability risks. Put another way, we would need next-generation digital security solutions and that’s where Arqit Quantum (NASDAQ:ARQQ) comes in. Per its website, the company has created quantum-secure data links and supports quantum-secure deployments.
What I like here is that Arqit is thinking ahead. Given the earth-shattering capabilities of quantum computers, it’s practically an inevitability that this technology will be used for nefarious purposes. Therefore, we need the good guys to stay ahead of the curve. Notably, MarketsandMarkets points out that the quantum cryptography market – which reached a valuation of $500 million last year – could expand at a compound annual growth rate (CAGR) of 41.2%.
So yes, the trailing-year performance of ARQQ is extremely problematic. However, analysts see explosive growth, with one expert anticipating a share price of $3. If you don’t mind betting on an entity that flirts with nano-cap designations, then Arqit should be on your radar.
Pixelworks (PXLW)
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Based in San Jose, California, Pixelworks (NASDAQ:PXLW) provides video and pixel processing semiconductors and software. As well, it offers digital display, projecting devices and digital signage solutions. As you might imagine, it’s wildly risky. It suffered a steep loss of market value in the trailing year. Also, over the past five years, PXLW appears to be printing a series of lower lows. Obviously, that’s not a great look.
Still, the beautiful aspect of Pixelworks is that it plies its trade in a surprisingly relevant field. According to Grand View Research, the global digital image processing market reached a value of $5.16 billion in 2022. By 2030, the sector could see annual revenue of $21.73 billion, a CAGR of 19.7%. With the diminutive value of the enterprise, Pixelworks may not need to do much to see robust upside.
Despite the clear risks, analysts have historically been bullish on the company. Per TipRanks, Aaron Spychalla from Craig-Hallum reiterated a “buy” rating on PXLW stock with a massive price target of $25. If you’re looking for a nearly 17-bagger opportunity, this could be it.
Penny Stocks
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.
