3 Explosive Penny Stocks to Buy for 10X Returns in 2 Years

Stocks to buy

Penny stocks to buy can be rewarding if you can spot the right ones.

Unfortunately, most have a history of burning investors. That’s because many are never the “bargain” they appear to be. And oftentimes, the shares are cheap for a good reason. 

Unfortunately, what you’ll find most times with penny stocks is an unproven company, and a potential pump and dump.

Still, they’re intriguing because of their price tag. The idea is that all this stock has to do is move a tiny bit, and I can cash out with thousands of dollars. But what many of us soon learn is that they should have just ignored the opportunity.

The U.S. SEC is well aware of the sirens of penny stocks, warning: “Penny stocks may trade infrequently — which means that it may be difficult to sell penny stock shares once you have them. Because it may also be difficult to find quotations for penny stocks, they may be impossible to accurately price. Investors in penny stock[s] should be prepared for the possibility that they may lose their whole investment.”

As long as you understand the risks, and won’t risk the house, here are a few of the top penny stocks to consider.

SoundHound AI (SOUN)

Source: T. Schneider / Shutterstock.com

The last time I mentioned SoundHound (NASDAQ:SOUN), it traded at $4.20 on May 1.

At the time, I noted, “Consider that SOUN is working with Nvidia, which just invested $3.7 million in the SOUN stock. Even more exciting, the market for voice-recognition technology could reach nearly $60 billion by 2030, as noted by Verified Market Research.

Nowadays, slightly above penny stock status, it last traded at $5.22 – and could be among the top penny stock success stories moving forward.

This is the company that provides voice control and audio analytics software to automakers, drive-through restaurants, and other businesses with phone-based menu systems. Better, one of its biggest investors is Nvidia (NASDAQ:NVDA), which invested about $3.7 million in the company. The investment arm of SoftBank (OTCMKTS:SFTBY) also invested $2.3 million in SOUN. While those are small investments, it says a lot that industry giants are jumping in.

From its current price of $5.22, I’d like to see it double in value, with patience.

Nerdy (NRDY)

Source: Shutterstock

Weakness is an opportunity for penny stocks to buy, like Nerdy Inc. (NYSE:NRDY), too.

After dropping from about $2.80 to a low of $2.13 on earnings and guidance, the live online learning platform appears to have caught strong support again. 

In its first quarter, the company posted revenue of $53.7 million, which was below estimates of $52.2 million. Meanwhile, active member numbers were up 40% year-over-year to 46,100. It also forecast second-quarter revenue of $50 million to $52 million, which is below expectations of $57.35 million.

For the full year, the company said it expects revenue to come in between $232 million and $246 million, which is below estimates for $237.81 million.

The company did reaffirm “previously guided for revenue of $232 to $246 million; representing accelerating year-over-year growth of 24% at the midpoint vs. our 2023 revenue of $193 million,” as noted by Morningstar.com.

“For the full year, we are reaffirming our expectation for adjusted EBITDA in a range of $5 to $15 million, an improvement of over 500 basis points in non-GAAP adjusted EBITDA margin at the midpoint. We also expect to deliver positive operating cash flow in 2024,” they added.

Bitfarms (BITF)

Source: PHOTOCREO Michal Bednarek / Shutterstock.com

With Bitcoin pushing higher again, keep an eye on mining penny stocks to buy, like Bitfarms (NASDAQ:BITF). After crumbling from about $4 to a recent low of $1.52, it’s showing signs of life.   

All after it kicked CEO Geoffrey Morphy to the curb after he filed suit against the company.

In fact, on May 13, according to Seeking Alpha, “Morphy filed a complaint against the company in the Superior Court of Ontario, claiming damages for breach of contract, wrongful dismissal and aggravated and punitive damages in the amount of US$27M.”

BITF says the claims are without merit. Aside from the legal chaos, the company did beat earnings. Its loss per share of two cents was above estimates for a loss of three cents. Revenue of $50.32 million was also better than estimates of $48.96 million. It’s gross mining margin of 59% was also up from the 52% in the last quarter of 20w23, and 41% year over year.

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.

Read More:  Penny Stocks — How to Profit Without Getting Scammed

On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.

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