Top 8 Penny Stocks to Watch on Robinhood in January 2025

Robinhood penny stocks trade at $5 or less per share, and they hold opportunities for traders building small accounts. These stocks are cheap and often sketchy, and they require different strategies from larger stocks. For beginners, Robinhood is an accessible starting point for trading penny stocks, thanks to its zero fees and no minimum deposit policy. Traders with more experience should consider switching to brokers that cater to advanced trading needs.

8 Robinhood Penny Stocks to Watch on Robinhood January 2025

My top 8 Robinhood penny stocks to watch in January 2025 are:

• NASDAQ: SOUN — SoundHound AI Inc. — The Record Revenue AI Penny Stock
• NASDAQ: NITO — N2OFF Inc. — The Renewable Energy Stock Spiking With Approval News
• NASDAQ: CRNC — Cerence Inc. — The NVDA Collaboration Stock That’s Consolidating
• NASDAQ: KITT — Nauticus Robotics Inc. — The No-News Robotics Sector Spiker
• NASDAQ: RR — Richtech Robotics Inc. — The Bartender Robotics Stock
• NASDAQ: QUBT — Quantum Computing Inc. — The New Order News Quantum Computing Penny Stock
• NYSE: QBTS — D-Wave Quantum Inc. — Another Quantum Computing Penny Stock
• NYSE: FUBO — fuboTV Inc. — The Low-Priced Disney Merger Stock

The following are some of the stocks that people on Robinhood have been trading more than most of the market…

There’s no guarantee I’ll trade any of these stocks. I’m watching them to see if they match my preferred setups — only then will I trade them.

The best traders watch more than they trade — that’s what I’m trying to model here.

Here’s some background info on Robinhood penny stocks:

• What is the most promising Robinhood penny stock?

A stock with a lot of volatility like SoundHound AI Inc. (NASDAQ: SOUN) is a good bet for the most promising Robinhood penny stock. Remember, we’re traders, not investors. We’re watching the stocks on this list for short-term moves, not predicting which of these stocks will still be around in 2030.

• What are the top 3 Robinhood penny stocks to buy now?

My top 3 Robinhood penny stocks to buy now (as long as their price action is strong) are SoundHound AI Inc. (NASDAQ: SOUN), Quantum Computing Inc (NASDAQ: QUBT), and Cerence Inc (NASDAQ: CRNC).

• Which Robinhood penny stocks have a “Strong Buy” analyst rating?

Analysts don’t give any Robinhood penny stocks “strong buy” ratings. These stocks are sketchy and unstable, and should never be investment targets. Always trade with a plan.

Let’s get to the picks …

SoundHound AI Inc. (NASDAQ: SOUN) — The Record Revenue AI Penny Stock

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My first Robinhood penny stock pick is SoundHound AI Inc. (NASDAQ: SOUN).

This was one of the first AI runners when ChatGPT broke the internet in early 2023.

Back then, SOUN spiked from $1 to $4.50. And it smashed past all-time highs in December.

After reaching all-time highs in the mid-$20s, it’s currently trading around $15.

This pullback could be an opportunity. Or it could be a sign that trader enthusiasm is waning.

Take a look at the chart below, every candle represents one trading day:

This is an OG stock in the AI sector … And NVIDIA Corporation (NASDAQ: NVDA) has shares of it.

Not only is it on a bullish trajectory and has big investors like NVDA, but it also has Q3 financial data to back up the momentum!

On November 12, SOUN reported record Q3 revenue that beat expectations.

• EPS of -$0.04, a beat by $0.03.
• Revenue of $25 million, a beat by $2 million.

Make sure to identify major support levels to build smart positions on this stock!

N2OFF Inc. (NASDAQ: NITO) — The Renewable Energy Stock Spiking With Approval News

My second Robinhood penny stock pick is N2OFF Inc. (NASDAQ: NITO).

On January 2, NITO announced that its renewable-energy project, developed by Soltera Renewable Energy Ltd, obtained approval for its 111 MWp solar PV project in Meltz, Germany.

As a direct result, the stock spiked 1,300%* in less than two days!

I traded the price action twice, take a look at my notes below:

Attention: The price is still up and StocksToTrade shows that the float is still only 3.9 million shares.

The low supply of shares helps prices spike higher when demand increases. Get ready for follow-up volatility from this stock.

More Breaking News

• Is Dogwood Therapeutics Inc. Stock Poised for a Turnaround?
• Guardant Health: Unraveling the Surprisingly Flourishing Revenue Trajectory
• Quantum Buzz: D-Wave’s Extraordinary Leap in Fiscal Bookings – Is it the Start of a Transformational Era?

Cerence Inc. (NASDAQ: CRNC) — The NVDA Collaboration Stock That’s Consolidating

My third Robinhood penny stock pick is Cerence Inc. (NASDAQ: CRNC).

SOUN isn’t the only stock on this watchlist with ties to NVDA …

On January 3, CRNC announced that it was expanding its collaboration with NVDA to advance its CaLLM family of language models.

The stock was already consolidating from a spike in November. And the news with NVDA caused prices to spike 240%* to new one-year highs..

The price retreated from the new highs on January 6, but it didn’t give back all of the gains. There’s a strong possibility that we see the price bounce after such a volatile move.

That’s a #5 and #6 move in my 7-Step Framework.

Nauticus Robotics Inc. (NASDAQ: KITT) — The No-News Robotics Sector Spiker

My fourth Robinhood penny stock pick is Nauticus Robotics Inc. (NASDAQ: KITT).

This stock didn’t announce any news to push the price higher …

That’s the strength of this robotics/AI sector right now. There are stocks spiking without any news. They’re just ‘the right kind of’ company.

The share price started to spike on December 26. But the biggest day of volatility thus far was January 3 …

Take a look at the spike below, every candle represents one trading day:

I’m waiting to see a bounce from this stock. Especially since the share price is approaching support that was set by the highs on December 27 and 30.

Watch for intraday bounces.

Richtech Robotics Inc. (NASDAQ: RR) — The Bartender Robotics Stock

My fifth Robinhood penny stock pick is Richtech Robotics Inc. (NASDAQ: RR).

This robotics stock has a longer history of spiking than KITT, it also has viable catalysts to support the price action.

RR has already announced a number of press releases to hype its bartender robot. It’s pictured below from the company’s website:

And from Friday, January 3 to Monday, January 6, the stock followed my exact weekend trade pattern.

Take a look at the chart below, every candle represents one trading day:

Some of my students realized this setup in time too!

Take a look at the post on X below:

Learn my weekend trade pattern NOW!

And keep an eye on the RR price action this month …

The company isn’t done announcing press releases.

Quantum Computing Inc (NASDAQ: QUBT) — The Quantum Computing Sector Leader Penny Stock

My sixth Robinhood penny stock pick is Quantum Computing Inc (NASDAQ: QUBT).

There are a lot of quantum computing stocks spiking in the market right now.

QUBT exploded higher after the company announced, on November 13, that it secured its first order from its TFLN photonic chip foundry.

Since then, the stock spiked 1,800%* over multiple days. Take a look, every candle represents one trading day:

The recent selloff on January 8 is directly related to the comments from Jensen Huang, CEO of NVIDIA Corporation (NASDAQ: NVDA).

The famous tech CEO mentioned that useful quantum computers are still decades away.

There’s no telling where this stock goes from here. But the recent selloff gives us a lot of room to work with.

Whether it pushes higher from this level or continues the selloff, we can expect more volatility from this stock. And where there’s volatility, there’s an opportunity to profit!

Prompt my AI trading bot with the QUBT ticker.

It will spit out a trade plan as if you asked me directly!

D-Wave Quantum Inc. (NYSE: QBTS) — Another Quantum Computing Penny Stock

My seventh Robinhood penny stock pick is D-Wave Quantum Inc. (NYSE: QBTS).

This is another quantum computing stock that’s on a multi-week run.

You could say that the spike started on November 4 when the company announced that it had regained NYSE compliance …

Then on November 6, the company announced it completed the calibration of its latest 4,400+ qubit Advantage2 processor.

Prices gapped up that day, and by November 7 the spike was well underway.

Take a look at the chart below, this is a 940%* spike.

Every candle represents one trading day:

Again, we can clearly see the reaction on January 8 to Jensen Huang’s comments …

This is a great lesson about stock catalysts.

There are good catalysts and bad catalysts that can affect the price of a stock. My students and I trade stocks with good catalysts as the price pushes higher.

But it’s important to follow specific trade patterns because we never know when a bad catalyst could cause the price to drop.

This stock is still volatile. Get ready for follow-up moves.

fuboTV Inc. (NYSE: FUBO) — The Low-Priced Disney Merger Stock

My eighth Robinhood penny stock pick is fuboTV Inc. (NYSE: FUBO).

On Monday morning, January 6, during premarket hours, FUBO announced it would merge with Disney’s ‘Hulu + LiveTV’ package.

This news was a surprise for the market. And big companies like CNN fanned the flames with their own coverage of the story.

Take a look below:

Thus far, share prices spiked 340%*.

And the price is still up …

This is the kind of news that could push FUBO’s share prices higher over multiple days and weeks.

Disney is a massive, world-famous company. A merger deal with a tiny company like FUBO is a great catalyst for FUBO’s stock price.

Keep an eye on this stock. Especially the breakout level of $6.45 from January 7.

*Past performance does not indicate future results

What Is a Good Penny Stock to Buy on Robinhood?

A few of the stocks I’ve been watching lately are accessible to Robinhood traders. Just remember …

This is only a watchlist. I have no plans to trade these stocks — and I won’t unless they fit into one of my preferred setups.

I want you to focus on my process, not my stock picks. If you want to become a self-sufficient trader, you’ll need to create your own watchlists.

Get a new no-cost watchlist sent to you each week by signing up here.

Trading on Robinhood

Robinhood is an easy-to-use, no-commission trading platform accessible to just about anyone. It also offers zero minimum deposits … You can even buy partial stock with its fractional shares feature.

Robinhood gives you access to over 5,000 U.S. listed stocks and ETFs, as well as ADRs in foreign listed companies. As of this year, Robinhood now allows trading in select OTC stocks as well.

How to Find Penny Stocks on Robinhood

Robinhood has curated stock lists under its “Trending Lists” section, but, unfortunately, it doesn’t feature a list of penny stocks. You might need to play around with some filters on Robinhood to see these cheap stocks.

Here’s how you access penny stock lists on Robinhood:

1. Log into your Robinhood account.
2. Select the magnifying glass, and click on the “Trending Lists” menu.
3. Select the business sector of your choice and sort in ascending order to see the cheapest stocks listed. Alternatively, you can push the filter button and set a maximum share price of $5, so you only see penny stocks.

You can rinse and repeat these steps to find the best penny stocks on any curated list Robinhood creates. If you’re confused because you find duplicate stocks across the lists, you can just write down which companies offer penny stocks and create a custom penny stock list.

What to Consider When Trading Penny Stocks on Robinhood

Trading penny stocks on Robinhood requires a clear understanding of both the platform and the nature of penny stocks. Robinhood offers an accessible way to enter the stock market with its user-friendly interface and commission-free trades.

But this ease of access comes with limitations — especially when dealing with highly volatile, low-priced small-cap stocks.

To navigate these challenges, you need to understand penny stock trading, and how Robinhood’s features and limitations can impact your trading strategy.

Understand the Nature of Penny Stocks

Penny stocks trades are volatile and unpredictable, so while there’s a chance of big gains, there’s also the risk of major losses. This means you shouldn’t invest in penny stocks — just trade them.

Penny stocks are defined by:

• Price per share: Typically trading for less than $5.
• Market capitalization: Often small-cap stocks with market caps below $300 million.
• Trading venues: Found on OTC markets as well as major exchanges.

Common characteristics of penny stocks include:

1. High volatility: Prices can swing dramatically within a short period.
2. Low liquidity: Fewer shares are traded, which can lead to significant price movements. Learn more about the most active penny stocks to keep an eye on here.
3. Risk of manipulation: Due to their low price and trading volume, they are often targets for pump-and-dump schemes.
4. Lack of information: Reliable data and analysis can be hard to find.

Research the Stocks Thoroughly

If you’re getting into penny stocks, it’s not enough just to read my stock picks. You need to build your own knowledge account so you can make informed decisions.

Before trading penny stocks, thorough research is crucial. Unlike blue-chip stocks, penny stocks often lack extensive analyst coverage and detailed financial reports. This makes doing your due diligence even more critical.

To research penny stocks effectively, follow these steps:

1. Review financial statements: Look at the company’s balance sheet, income statement, and cash flow statement. Keep a healthy sense of skepticism — penny stocks are notorious for inflating their value claims.
2. Understand the industry: Know the sector in which the company operates and its competitive position.
3. Monitor market trends: Be aware of broader market conditions and trends that could impact the stock.
4. Check recent news: Stay updated on recent developments or announcements from the company.
5. Evaluate management: Research the background and track record of the company’s leadership team.

Consider Robinhood’s Limitations

When trading penny stocks on Robinhood, you have to be  super aware of the platform’s limitations. These are the big ones:

• Trade execution speed: Execution may be slower compared to other platforms, impacting your ability to react swiftly in volatile markets.
• Limited research tools: Robinhood offers fewer analytical tools and research resources than other brokerages.
• Restrictions on certain stocks: Some penny stocks won’t be available for trading on Robinhood — especially the sketchy OTC stocks that I love to trade!

These limitations can significantly affect your trading strategy. Slower execution speeds mean you might miss optimal buy or sell points, which really matters in fast-moving penny stocks. And if you can’t trade the stocks that are making moves, you’re limiting your options for no reason.

Webull is a worthwhile Robinhood alternative, with the same focus on mobile-first trading and ease of use. Its advantages includes advanced charting options, real-time market data, and extended trading hours. By utilizing these features, traders can make more informed decisions and capitalize on market opportunities. For an in-depth look at the best penny stocks to buy on Webull, check out my Webull penny stocks watchlist.

Manage Risk Effectively

Effective risk management is HUGE when trading penny stocks, given their high volatility and potential for significant losses.

Risk management techniques include:

• Stop-loss orders: Automatically sell a stock when it reaches a certain price to limit potential losses.
• Take-profit orders: Set a specific price to automatically sell and secure profits.

Diversification and position sizing are also important for managing risk. Here are two of the basic techniques traders use:

1. Diversification: Spread your trades across multiple stocks to reduce the impact of any single stock’s poor performance.
2. Position sizing: Limit the amount of capital allocated to any single penny stock, preventing significant losses from a single trade.

Develop a Trading Strategy

A well-defined trading strategy is vital. Key components of a successful strategy include:

• Clear entry and exit points: Define when to enter and exit trades based on specific criteria.
• Risk management rules: You can use stop-loss and take-profit orders, or be disciplined in follow your trading plan. Stick to your position sizing limits.
• Regular review and adaptation: Continuously assess and adjust your strategy based on market conditions and trading performance.

Some of the most popular trading strategies include momentum trading, where you target stock trends, and breakout trading, where you enter trades when a stock moves beyond a resistance level. Here are some other strategies I’ve used over the years:

Identifying penny stocks before they spike can really boost your trading success. This involves thorough research and understanding market indicators that signal potential upswings. One effective strategy is to analyze historical data and monitor social media trends for emerging stocks. Additionally, using specialized screeners and trading algorithms can help pinpoint these opportunities early. Check out my strategies for finding penny stocks pre-spike here.

Robinhood Stocks Under $5

The appeal of hot sector stocks accessible on platforms like Robinhood, especially those classified as penny stocks, is compelling for both novice and seasoned investors. The energy and technology sectors, for instance, are witnessing rapid growth and innovation, making stocks within these domains particularly attractive for those on the lookout for the next breakout investment. The allure lies in the potential for substantial returns on investment, as even minor developments or positive news within these sectors can lead to significant price jumps.

Nonetheless, it’s imperative to navigate these waters with caution and a well-thought-out strategy. The inherent volatility of penny stocks, combined with the speculative nature of emerging sectors like renewable energy and tech innovations, underscores the importance of a meticulous approach. Before diving in, ensure you’ve done your due diligence, looking past the initial excitement to assess the true potential and risks of these ventures. It’s wise to trade these stocks rather than invest long-term, given their unpredictable nature.

Success in trading hot sector stocks priced under $5 on platforms such as Robinhood hinges on a selective and strategic approach. The goal is to tap into the explosive growth potential of sectors like renewable energy and technology while implementing robust risk management practices. By zeroing in on companies poised for leadership within their specific niches, traders can seize opportunities for disproportionate gains. This strategy, coupled with a disciplined approach to maintaining a tight investment strategy and promptly cutting losses, can pave the way for trading success in these dynamic market segments.

Can You Buy Stocks Under $1 on Robinhood?

Yes, you can definitely buy stocks under $1 on Robinhood. Listed penny stocks will often fall beneath the $1 minimum listing threshold.

The OTC stocks that Robinhood allows access to are often on the pricier side.

Buying penny stocks is as easy as buying any other stock on the app, too. Just choose your stock, pick your order type, input how many shares you’re buying, and submit your order.

Penny Stocks on Robinhood Under 10 Cents

Looking to trade the cheapest stocks on Robinhood? Penny stocks under 10 cents will occasionally pop up, but not too often.

If you’re looking to trade stocks under 10 cents, the OTC markets have the biggest selection. Unfortunately, Robinhood doesn’t allow trading of the sketchiest OTC stocks.

Learn how I choose which stocks to trade in this guide. Use this stock scanner to further improve your trading game.

Robinhood Penny Stocks Market

Finding penny stocks on Robinhood is just the beginning of your trading journey. Understanding the market trends and sectors can significantly enhance your trading strategy.

For those interested in targeting specific sectors, additional resources — like my sector watchlists — can be valuable. Explore the hot sector of biotech penny stocks by looking at the stocks I’m watching this month!

How to Buy Penny Stocks on Robinhood

Buying penny stocks on the Robinhood app or website is just like buying any other stock. Now that you’ve learned how to find penny stocks on Robinhood, here’s how to buy them:

1. Log into your Robinhood account.
2. Use your debit card or bank account to transfer funds into your Robinhood account.
3. Choose a penny stock to buy.
4. Select your order type (i.e., market, limit, stop loss, stop limit, or trailing stop order … I never use market orders for trading penny stocks).
5. Input how many shares you want to buy.
6. Review your order and ensure everything is correct.
7. Confirm your trade.

What Is the Minimum Amount to Buy Penny Stocks on Robinhood?

Robinhood doesn’t have a minimum amount for penny stocks — or any stocks — that cost $1 or more. You can start trading fractional stocks when a stock reaches that threshold.

Trading Fees on Robinhood

Robinhood doesn’t impose trading fees on its users. However, the Financial Industry Regulatory Authority (FINRA) is legally obliged to charge a fee, which you have to pay, on stock sales.

The trading activity fee for stock sales is $0.00013/share and $0.00218/share for options sales, with a maximum fee cap of $6.49. Robinhood only charges this fee if you sell more than 50 shares in one penny stock transaction.

Can You Become Rich Just Trading Penny Stocks On Robinhood?

Repeat after me: small gains add up. Can you become rich trading penny stocks on Robinhood? It’s a question, and one that requires a level-headed analysis. You can find hundreds of penny stocks on platforms like Robinhood, and while some Wall Street analysts tout them as undervalued assets, the reality is often more complex. Penny stocks are often speculative and lack the capitalization that more established stocks offer. With the right strategy, tools like a stock screener, and an eye on breaking news, gains are possible. But don’t expect instant riches. Think of Robinhood Gold, offering extended trading hours, but it can’t transform an unstable investment into gold overnight.

What Are the Risks Associated with Trading Penny Stocks on Robinhood?

Still with me? Good. Let’s dig into the risks. Trading penny stocks on Robinhood or other brokers can be a game of swings and roundabouts. Illiquidity and volatility can be a trader’s nightmare. The lack of depth in the market cap of these stocks means wild price swings are common, and if you’re not careful, losses can accrue quickly. Even with Robinhood’s simplicity and user-friendly interfaces, it doesn’t eliminate the risks associated with speculative investments in categories like marijuana penny stocks. Be mindful of the reality and keep your portfolio balanced. Don’t put all your eggs in the penny stock basket; diversify with other assets, products, or services.

Looking for more money-making tips with penny stocks? Learn from my 20+ years of experience by applying for the Trading Challenge and reading my FREE book right now.

Key Takeaways

Penny stock trading is a great way to build your account as a new trader. Robinhood is an okay place to trade stocks as a beginner because it doesn’t have fees and minimum deposits. However, it’s missing many of the capacities I look for in a broker. I recommend you move to another broker as soon as you can.

Key Considerations:

• A lot of penny stocks are shady. Risk in Robinhood penny stocks can be heightened due to limited company information and unsavory promotion.
• There’s a possibility for big gains. I trade penny stocks because you can trade conservatively and still rack up gains. These stocks can go supernova at any time. Aim for “the meat of the move.”
• These companies are often young. Some Robinhood penny stocks are newer companies, and can dramatically shift their market trajectory and valuation.

While I’ve given you eight stocks to watch on Robinhood, don’t just copy my penny stock picks blindly. Learn why I picked them and choose your own stocks to watch.

Have you traded penny stocks on Robinhood? Write “I always trade with a plan” in the comments!

Penny Stocks to Watch on Robinhood FAQs

In which countries is Robinhood available for trading penny stocks, and who are its main competitors?

Robinhood is primarily available in the United States but has been expanding to other countries. Its main competitors in the penny stock trading space include apps from Charles Schwab, E-Trade, and Webull. Availability might vary depending on regulations and market conditions in specific countries.

How is the page design on Robinhood’s app, and does it include any gamification elements (games) to engage users in penny stock trading?

Robinhood’s app is being designed with a sleek and user-friendly page layout that aims to make trading accessible to all. Some users feel that the app’s interface has gamification elements, including games and interactive visuals, making the trading experience more engaging, especially for younger investors.

How can one purchase penny stocks on Robinhood, and what are the payment options, including using a cash account or credit?

Purchasing penny stocks on Robinhood is a straightforward process that can be done through the app or web platform. Payment options include using a cash account or linking a credit/debit card. The purchase can be done with a few taps, and users can track their investments on the main page of the app.