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 hosting. While the best-known companies in the tech sector are giants like Alphabet (GOOGL) and Microsoft (MSFT), there are also tech businesses that could be classified as penny stocks. Penny stocks are those that trade at a low price of $5 per share or less. Some examples of technology penny stocks include Arotech Corp. (ARTX), a company developing drone and surveillance technology, and hydrogen fuel cell developer Plug Power Inc. (PLUG). Technology penny stocks do not have their own unique sector classification or benchmark, but investors should compare the performance of individual stocks against that of the S&P 500. In the trailing 12-month period, the S&P returned 18.2%. All figures are as of December 8, 2019.

Below, we'll look at the top 3 technology penny stocks with the best value, the fastest earnings growth, and the most momentum.

Technology Penny Stocks with the Best Value

These are the technology penny stocks with the lowest 12-month trailing price-to-sales (P/S) ratio. For young companies that have not reached profitability, this can provide an idea of how much business you’re getting for each dollar invested.

Technology Penny Stocks With the Best Value
  Price ($) Market Cap ($M) Price to Sales Ratio (FY)
SMTC Corp. (SMTX) 3.45 97.0 0.4
ReneSola Ltd. (SOL) 1.59 49.1 0.5
Information Services Group Inc. (III) 2.28 108.4 0.4
Source: Investopedia
  • SMTC Corp.: SMTC is an electronics company that manufactures components on behalf of other electronics companies. This business designs, assembles, tests, and distributes components for its clients. In Q3 2019, SMTC reported quarterly revenue of $88.7 million, up more than 65% year-over-year (YOY).
  • ReneSola Ltd.: Solar wafer manufacturer ReneSola develops a builds components for photovoltaic cells. The company recently announced a change in executive leadership, as Yumin Liu became CEO effective December 4, 2019 and Ke Chen became CFO in late November.
  • Information Services Group Inc.: Information Services Group is a technology research and advisory business focused on cloud and data analytics, digital transformation, and automation, among other things. For Q3 2019, Information Services Group reported operating income of $5.7 million, an increase of 68% YOY.

Technology Penny Stocks with the Fastest Earnings Growth

These are the technology penny stocks with the highest year over year (YOY) sales growth for the most recent quarter. Rising sales show that a company’s business is growing. This is often used to measure growth of young companies that have not yet reached profitability.

Technology Penny Stocks with the Fastest Earnings Growth
  Price ($) Market Cap ($M) Quarterly Revenue Growth (YOY)
ReneSola Ltd. (SOL) 1.59 49.1 251.0%
Smith Micro Software Inc. (SMSI) 4.62 177.9 81.5%
Alithya Group Inc. (ALYA) 2.18 121.4 81.6%
Source: Investopedia, ReneSola Ltd., Smith Micro Software Inc., Alithya Group Inc.
  • ReneSola Ltd.: See company description above.
  • Smith Micro Software Inc.: Smith Micro Software is a software company that specializes in wireless solutions for mobile systems, including connectivity and data traffic. For Q3 2019, Smith Micro Software reported revenue of $11.8 million, up from $6.5 million the year before.
  • Alithya Group Inc.: A Canadian IT and management consulting company, Alithya Group works with customers to provide strategic IT planning, systems development, and digital transformation, among other services. The company recently announced the acquisition of artificial intelligence and smart technology company Matricisi Informatique Inc.

Technology Penny Stocks with the Most Momentum

These are the technology penny stocks that had the greatest total return over the past 12 months.

Technology Penny Stocks with the Most Momentum
  Price ($) Market Cap ($M) 12-Month Trailing Total Return (%)
SeaChange International Inc. (SEAC) 4.09 150.7 132.4
Smith Micro Software Inc. (SMSI) 4.62 177.9 128.7
Research Frontiers Inc. (REFR) 3.06 95.1 117.0
S&P 500 -- -- 18.2
Source: Investopedia, Yahoo Finance
  • SeaChange International Inc.: SeaChange International develops software related to the management, storage, and distribution of digital video, particularly for telecommunications companies and television operators. In its recent FY 2020 Q3, SeaChange saw net income of $2.1 million, compared with a net loss of $3.8 million one year prior.
  • Smith Micro Software Inc.: See company description above.
  • Research Frontiers Inc.: Research Frontiers develops and manufactures light transmission windows for use in vehicles and buildings, as well as variable light transmission mirrors, roofs, goggles, sunglasses, and more.