The technology sector consists of businesses that develop, build, and market consumer electronics, electronic components, and software. Companies in the tech sector may also provide information technology (IT) services such as cloud computing. While the best-known companies are giants like Apple Inc. (AAPL) and Microsoft Inc. (MSFT), there also are tech businesses that are classified as penny stocks. Penny stocks typically trade at $5 per share or less. Investing in penny stocks can be especially risky and may entail higher trading costs. Investors should therefore be careful when considering whether to invest in these or similar securities.
There is no widely-used benchmark for tech penny stocks, and their performance has varied significantly over the past 12 months. However, the Invesco S&P SmallCap Info Tech ETF (PSCT) provides a general indicator for tech penny stocks. PSCT has significantly outperformed the broader market in the past year, providing a 1-year trailing total return of 67.4% compared with 35.1% for the Russell 1000 Index. These market performance numbers and all statistics in the tables below are as of Sept. 16, 2021.
Here are the top three tech penny stocks with the best value, the fastest growth, and the most momentum, respectively.
These are the tech penny stocks with the lowest 12-month trailing price-to-sales (P/S) ratio. For companies in early stages of development or industries suffering from major shocks, this can be substituted as a rough measure of a business's value. A business with higher sales could eventually produce more profit when it achieves, or returns to, profitability. The price-to-sales ratio shows how much you're paying for the stock for each dollar of sales generated.
|Best Value Tech Penny Stocks|
|Price ($)||Market Cap ($M)||12-Month Trailing P/S Ratio|
|Exela Technologies Inc. (XELA)||2.06||296.7||0.1|
|SOS Ltd. (SOS)||2.66||497.8||0.5|
|TD Holdings Inc. (GLG)||0.75||74.6||0.5|
- Exela Technologies Inc.: Exela Technologies is a business process automation company. It offers software and services for accounting, human resources management, and other services. On Sept. 1, 2021, the company announced that it had completed its $150 million at-the market equity program, announced on June 30. As of Aug. 1, this helped to provide Exela with an expanded liquidity position of over $200 million.
- SOS Ltd.: SOS Ltd. is a China-based holding company. Through subsidiaries, SOS offers financial services, including consumer credit, emergency rescue services, as well as insurance products. The company provides a consumer lending marketplace for customers in China.
- TD Holdings Inc.: TD Holdings is a China-based holding company engaged in the car rental and commodity trading business, and provides related supply chain management services. Its principal business is commodity trading, primarily of non-ferrous metal products. In July, the company announced that it had entered a trade cooperation agreement with the management committee of the Yangpu Economic Development Zone. Through the partnership, TD Holdings planned to launch its commodity trading business in the Zone and would receive preferential policies including tax relief, financial support, and rental subsidies.
These are the tech penny stocks with the highest year-over-year (YOY) sales growth for the most recent quarter. Rising sales can help investors pick out growing startups that have not yet reached profitability. In addition, earnings per share can be significantly influenced by accounting factors that may not reflect the overall strength of the business. However, sales growth can also be potentially misleading about the strength of a business, because growing sales on money-losing businesses can be harmful if the company has no plan to reach profitability.
|Fastest Growing Tech Penny Stocks|
|Price ($)||Market Cap ($M)||Revenue Growth (%)|
|Future FinTech Group Inc. (FTFT)||2.34||164.0||1,610|
|PowerBand Solutions Inc. (PBX.V)||CA$1.22||CA$226.8||1,050|
|Artificial Intelligence Technology Solutions Inc. (AITX)||0.04||143.8||784.9|
- Future FinTech Group Inc.: Future FinTech Group is a China-based blockchain e-commerce company. The company provides an online shopping platform, incubator for blockchain-based applications projects, and a cross-border e-commerce platform.
- PowerBand Solutions Inc.: PowerBand Solutions is a Canada-based automotive technology provider. The company provides a cloud-based auction and finance portal platform for transactions among consumers, dealers, funders and manufacturers. For Q2 2021, the company reported that its net loss narrowed YOY as revenue rose. . PowerBand attributed the revenue performance to industry acceptance of its DRIVRZ lease origination software, which is driving strong sequential growth.
- Artificial Intelligence Technology Solutions Inc.: Artificial Intelligence Technology Solutions provides mobile electronic services, including AI and robotics solutions. The company offers after-market upgrades for electronics, audio, and video for automobiles, boats, and recreational vehicles.
These are the tech penny stocks that had the highest total return over the last 12 months. Stocks with returns in excess of 3,500% have been excluded as outliers.
|Tech Penny Stocks with the Most Momentum|
|Price ($)||Market Cap ($M)||12-Month Trailing Total Return (%)|
|Extreme Vehicle Battery Technologies Corp. (ACDC.CX)||CA$0.26||CA$102.7||2,450|
|DMG Blockchain Solutions Inc. (DMGI.V)||CA$1.06||CA$174.7||1,080|
|Netlist Inc. (NLST)||4.83||1,085||955.9|
|S&P SmallCap Info Tech ETF (PSCT)||N/A||N/A||67.4|
- Extreme Vehicle Battery Technologies Corp.: Extreme Vehicle Battery Technologies is a Canada-based blockchain and battery technology company. The company provides battery management systems for the electric vehicle and energy storage solution markets. On Sept. 14, the company announced that its common shares had become eligible for electronic clearing and settlement through the Depository Trust Company in the U.S. The company's shares are available on the OTCQB Exchange under the ticker CRYBF.
- DMG Blockchain Solutions Inc.: DMG Blockchain Solutions is a Canada-based cryptocurrency and blockchain company. It provides a platform focused on mining public blockchains and using blockchain technology to address fraud and other issues in supply chains.
- Netlist Inc.: Netlist builds and sells memory subsystems. The company provides products to the server, high-performance computing and communications markets. The company also designs custom semiconductor logic devices, which are integrated into its memory subsystems. For Q2 2021, ended July 3, the company reported net income of $27.8 million compared with a net loss in the prior-year quarter. Net sales grew about 500% YOY. Strong product sales and the execution of a comprehensive licensing agreement with SK hynix Inc. drove this growth.
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YCharts. "Financial Data." Accessed Sept. 16, 2021.
Exela Technologies Inc. "Exela Technologies Announces Completion of $150 million At-the-Market Offering." Accessed Sept. 16, 2021.
TD Holdings Inc. "TD Holdings, Inc. Inks Partnership Agreement with the Management Committee of Hainan's Largest Economic Zone to Expand Commodity Trading Business." Accessed Sept. 16, 2021.
PowerBand Solutions Inc. "PowerBand Reports Second Quarter 2021 Financial Results." Accessed Sept. 16, 2021.
Extreme Vehicle Battery Technologies Corp. "EV Battery Tech Formally Opens Trading to US Investors." Accessed Sept. 16, 2021.
Netlist Inc. "Netlist Reports Second Quarter 2021 Results." Accessed Sept. 16, 2021.