Are penny stocks worth it? The answer to that question depends heavily on who you ask. Due to their enticing and explosive gains, new traders tend to assume it’s easy to capitalize on volatile moves in cheap stocks. Experienced traders understand otherwise and having a game plan is necessary. It’s true that on any given day, the market sees a few stocks under $5 jumping hundreds of percentage points. The key is knowing how to find the best penny stocks to buy without chasing the move and buying at the top.
So, are penny stocks worth it? In short, yes if you know how to use their unique action to your advantage. In the stock market today, there are plenty of headwinds and tailwinds to push and pull broader indexes in one direction or nothing. The exciting part about penny stocks is that even if the stock market is down, there are more than a few that aren’t. Some actually have traded their highest daily volumes of the year during period when the stock market is down.
Just look at one of the most active penny stocks today, Taysha Gene Therapies (NASDAQ: TSHA). The stock barely traded up until this week. On Monday, the company announced a $150 million funding round as well as reported clinical data on its Rett Syndrome candidate in a Phase 1/2 trial. TSHA stock was up today thanks to that news mixed with speculative excitement from retail traders. The penny stock exploded over 130% during early morning trading, and its price is still sitting below $2.
In this article, we look at a few of the most active names on the list of cheap stocks to watch. We identify recent catalysts that could be playing a part in the move. We’ll also try to find any upcoming events or potential milestones that may be looked at down the road by traders.
Penny Stocks To Watch
- Quantum Computing Inc. (NASDAQ: QUBT)
- Aeye Inc. (NASDAQ: LIDR)
- Rigetti Computing Inc. (NASDAQ: RGTI)
Quantum Computing Inc. (QUBT)
As its name suggests, Quantum Computing focuses on offering applications and solutions leveraging quantum computing technology. Not much has come from the company during August but Quantum is coming off of a busy July. There’s also plenty of speculation abuzz about AI and edge computing stocks.
Quantum received its third NASA subcontract award a few weeks ago, which opened up new opportunities to build and test for NASA Ames. The company will build an instrument for measuring atmospheric particles. “This is our third distinct task order from NASA in four months and it highlights our ability to leverage QCi’s core proprietary photonic capability across a range of products. In the case of NASA, we were contracted to deliver three capabilities to two different NASA research centers. Our first two engagements contracted earlier this year with NASA Langley Research Center located in Virginia afforded us the opportunity to showcase our powerful and highly secure photonic LiDAR as well as our reservoir computing capability,” explained Sean Gabeler, President of QI Solutions.
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Quantum followed this up with the launch of its first quantum photonic vibrometer to detect things like highly obscured objects at far distances. Uses for this product, according to management, include finding weaknesses find failure points in bridges, dams, pipelines, and other critical infrastructures.
AEye Inc. (LIDR)
Shares of AEye Inc. bounced back in the stock market today. The company develops adaptive, high-performance lidar solutions for its clients. Not many things have been released by the company in terms of recent news headlines other than its second quarter financials. AEye beat EPS estimates but missed sales expectations for the quarter.
“AEye has taken a significant step forward this quarter in our path to commercialization in the automotive market,” said Matt Fisch, AEye CEO.
“We’ve achieved major in-vehicle test milestones with three prestigious industry players, including NVIDIA and two global automotive OEMs; AEye has solidified a production-ready supply chain with Continental to deliver an ADAS product at a price well below $1,000; and we have been named a finalist for two automotive series production awards, with a strong pipeline of OEM RFQs representing a sizable revenue opportunity.”
Excitement stemming from the tech sector and autonomous driving has promoted interest in companies like AEye. Even though shares have slipped from recent highs, the penny stock sits much higher than where it was in May.
Rigetti Computing Inc. (RGTI)
Shares of Rigetti Computing stock continued climbing higher in the stock market today. The penny stock made a rebound after a sell-off earlier in the month. One of the catalysts in play is the latest round of earnings.
Rigetti reported a beat on sales and EPS for the quarter. Analysts at Benchmark and Needham also reevaluated their stance on RGTI stock. Each now has a Buy rating following Benchmark’s upgrade. The firms also have RGTI stock forecast price targets of $4 and $3, respectively.
“After having launched the Ankaa-1 system internally, we are excited to have our longtime partner, Riverlane, as the first external partner using the system to work on improving error correction techniques on our new architecture,” said Dr. Subodh Kulkarni, Rigetti Chief Executive Officer. “We also look forward to making Ankaa-2, our most innovative system to date, available to the general public in Q4 of this year.”
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The quantum computing company has gained interest as the sector grows in popularity. Rigetti is expecting to launch its Ankaa-1 quantum processor to customers in mid-2023. It was also awarded a US Patent titled “Parametrically activated quantum logic gates,” helping to add to the positive sentiment in the stock market. Right before the end of July, Rigetti also announced a collaboration deal with ADIA Lab to develop quantum machine learning solutions for resolving certain challenges in quantitative finance.
