Finding Promising Tech Penny Stocks: High Risk, High Reward
Tech stocks tend to garner significant investor attention. Massive companies like Apple and Microsoft are constantly in the headlines. However, lesser-known technology penny stocks may also offer intriguing, albeit riskier, opportunities.
Technology penny stocks, defined as tech companies trading under $5 per share, provide small-scale investors a chance to observe emerging ideas, innovations, and industries. While transparent public information on these speculative penny stocks to watch can be scarce, investors do their due diligence to identify companies potentially poised for growth and could be penny stocks to buy now.
Trading action and volatility can rapidly escalate, at times delivering huge returns. Put simply, these stocks introduce both immense upside and downside potential. They epitomize high-risk, high-reward.
Risks and Pitfalls Of Trading Penny Stocks
Trading technology penny stocks also comes with substantial risk. Irrational trading behavior surrounding penny stocks produces intense volatility, especially in thinly traded names. Reactionary trading tendencies prompt knee-jerk share price swings that elude common sense.
Illiquidity also dampers the trading ability of penny stock investors, preventing smooth entering or exiting positions. Stocks see wild swings on minor volume due to lower market depth.
Additionally, tech penny stocks frequently stem from new companies with limited operating history and muddy track records. Lack of historical context raises uncertainty when evaluating business models and growth outlook.
Overall the opaque and frenetic nature of penny stocks confound analytics. Separating future stars from potential duds proves exceedingly difficult, even for seasoned investors focused on technology stocks under $5. Carefully vetting opportunities and diversifying across multiple penny stocks hedge against individual collapses.
Benefits and Promise of Tech Penny Stocks
Trading penny stocks allows investing in cutting-edge startups before mass popularity focuses. For tech companies with disruptive ideas, penny stock status frequently precedes enormous growth with the right companies.
Of course, realizing gains depends on discovering the most promising tech penny stocks positioned for growth. Carefully researching company workings, financials, catalysts and industry trends allows investors to best determine technology penny stocks warranting investment based on future outlook.
In this article, we look at four hot penny stocks to watch in the tech space. Will they be on your list of penny stocks before 2024?
Tech Penny Stocks To Watch
- BlackBerry Limited (NYSE: BB)
- Iris Energy Limited (NASDAQ: IREN)
- Globalstar, Inc. (NYSEAMERICAN: GSAT)
- SmartRent, Inc. (NYSE: SMRT)
BlackBerry Limited (BB)
BlackBerry has become a key player in cybersecurity solutions and software services. Other than cell phones, it focus on enhancing cybersecurity postures for governments and enterprises worldwide. While cybersecurity stocks are likely going to be a focus this week thanks to earnings, BB stock has gained attention for recent cybersecutiry-related headlines.
Earlier this month the company announced a significant long-term software and services agreement with the Malaysian Government. This deal will provide Malaysia with BlackBerry’s comprehensive cybersecurity solutions, including AI-powered Cylance® to predict and prevent cyberattacks, NATO-certified SecuSUITE® for secure communications, Unified Endpoint Management (UEM), and AtHoc® for critical event management. BlackBerry also plans to establish a Cybersecurity Center of Excellence (CCoE) in Kuala Lumpur in 2024.
Best Penny Stocks To Buy Today? 3 To Watch This Week
The CCoE will advance Malaysian cybersecurity capacity and readiness, aiming to reduce the country’s shortfall of 12,000 cyber professionals. Malaysian Prime Minister Datuk Seri Anwar Ibrahim and Canadian Prime Minister Justin Trudeau both welcomed this collaboration. John Giamatteo, President of BlackBerry Cybersecurity, emphasized the partnership’s significance in enhancing Malaysia’s cybersecurity posture.
This deal has brought plenty of attention to BB stock. However, it could be important to weigh industry headlines; specifically cybersecurity stocks. This week, zscaler, Snowflake, Splunk, Crowdstrike, and other tech stocks will likely be a driving force for sympathy sentiment.
Iris Energy Limited (IREN)
Iris Energy is a sustainable Bitcoin mining company. They focus on utilizing renewable energy and supporting the global Bitcoin network. While Bitcoin prices slumped over the last 24 hours, IREN stock has bucked this trend. This month the company announced its October 2023 monthly investor update.
The update included a partnership with WEKA to optimize generative AI workloads and an expansion to 9.4 EH/s. Iris Energy acquired 1.4 EH/s of Bitmain S21 miners and continued construction at their Childress site. The update highlighted improved revenue and operating hashrate. However, there was a decrease in Bitcoin mined due to increased network difficulty.
Given the state of the cryptocurrency arena, IREN stock could be more influenced by sentiment within the sector. Bitcoin prices have dipped in the stock market today. However, the prices for other currencies, including Ethereum, are a stark opposite of that trend. In fact, ETH has bounced back toward its 2023 highs on Monday.
Globalstar, Inc. (GSAT)
Globalstar, Inc. provides satellite communications services. They focus on delivering reliable connectivity solutions globally. Thanks to earnings, GSAT stock has gained plenty of momentum in the stock market this month.
The company reported significant growth in its third-quarter 2023 results. Total revenue increased by $20.1 million, a 53% rise to $57.7 million compared to the same quarter in 2022. This increase was primarily driven by higher service revenue, particularly in wholesale services. The company’s operational income showed a remarkable turnaround, with an income of $2.0 million in Q3 2023 compared to a loss of $186.6 million in Q3 2022.
4 Penny Stocks To Watch Under $5; Are They A Buy Now?
The loss in the previous year was largely due to a non-cash impairment charge of $174.5 million related to the abandonment of second-generation Duplex assets. Excluding this charge, the increase in operational income was attributed to the higher service revenue, offset by increased operating expenses.
As shares approach 2023 highs once again, GSAT stock has turned some heads recently. Black Friday trading saw a larger 1-day jump in shares compared to the previous two weeks.
SmartRent, Inc. (SMRT)
SmartRent provides smart home and property operations solutions. They cater to the rental housing industry with innovative technology. Like other companies this month, SmartRent reported earnings and banner results helped boost sentiment for the penny stock.
Results meaningful growth and operational improvements. It achieved revenue of $58.1 million, marking a 22% increase year-over-year. Their gross profit significantly rose to $13.5 million, a dramatic increase from $1.2 million in Q3 2022. This improvement was attributed to enhanced efficiencies and economies of scale, boosting the total gross margin to 23.3%. The net loss for the quarter was reduced to $7.7 million, a 70% improvement from the previous year.
Adjusted EBITDA also improved to a loss of $5.0 million, a 22% improvement from the second quarter of 2023 and a 72% improvement year-over-year. The company’s cash and cash equivalents stood at $211.0 million as of September 30, 2023, an increase of $14 million from the second quarter of 2023. This marks the first significant cash generation since SmartRent became a publicly traded company, primarily due to improved inventory management and demand forecasting.
In addition, SmartRent appointed a new CFO, Daryl Stemm. He served as the company’s SVP of Finance for the last few years. Direct Bruce Strohm has also become somewhat of a catalyst this month. It comes after he purchased over 80,000 shares of SMRT stock at prices ranging from $2.80 and $3.
