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. and Microsoft Inc., there also are tech businesses that are classified as penny stocks.
Penny stocks typically trade at $5 per share or less. Investing in penny stocks can be especially risky and may entail higher trading costs. Therefore, investors should be careful when considering whether to invest in these or similar securities.
There is no widely used benchmark for tech penny stocks, but an exchange-traded fund, the Invesco S&P SmallCap Information Technology ETF (PSCT), may serve as a general indicator for this specific niche of the tech equity market. PSCT has underperformed the broader market in the past year, providing a one-year trailing total return of -33.0% compared with -14.3% for the Russell 1000 Index. These market performance numbers above and all statistics in the tables below are as of June 17, 2022.
Here are the top three tech penny stocks with the best value, the fastest growth, and the best performance, respectively.
These are the tech penny stocks with the lowest 12-month trailing (TTM) price-to-sales (P/S) ratio. For companies in early stages of development or industries suffering from major shocks, this can be substituted as a rough measure of a business’s value. A business with higher sales eventually could produce more profit when it either achieves or returns to profitability. The P/S ratio shows how much you’re paying for the stock for each dollar of sales generated.
|Best Value Tech Penny Stocks|
|Price ($)||Market Capitalization (Market Cap) ($M)||12-Month Trailing P/S Ratio|
|Exela Technologies Inc. (XELA)||0.14||69.1||Less than 0.1|
|Diebold Nixdorf Inc. (DBD)||2.29||180.8||Less than 0.1|
|BIT Mining Ltd. (BTCM)||1.12||79.5||0.1|
- Exela Technologies Inc.: Exela Technologies is a business process automation company. It offers software and services for accounting, human resources management, legal management, and other services. The company announced in late March that Ronald C. Cogburn would be transitioning to a new position from his role as chief executive officer (CEO), effective April 30, 2022. Exela did not give a reason for the move or what his new role would be. The company said that Executive Chairman Par Chadha and the global senior management team will lead and manage the company after that date.
- Diebold Nixdorf Inc.: Diebold Nixdorf is a provider of connected commerce solutions. The company partners with financial institutions and global retailers to offer financial services to consumers.
- BIT Mining Ltd.: BIT Mining is a cryptocurrency mining company. It engages in cryptocurrency mining and data center operations. The company also owns the blockchain browser, BTC.com, as well as the mining pool business operated under BTC.com. A mining pool is a joint group of cryptocurrency miners.
These are the tech penny stocks with the highest year-over-year (YOY) sales growth for the most recent quarter. Rising sales can help investors pick out growing startups that have not yet reached profitability. In addition, earnings per share can be significantly influenced by accounting factors that may not reflect the overall strength of the business. However, sales growth can also be potentially misleading about the strength of a business, because growing sales on money-losing businesses can be harmful if the company has no plan to reach profitability. Companies with sales growth of 2,500% or more have been excluded from our list as outliers.
|Fastest Growing Tech Penny Stocks|
|Price ($)||Market Cap ($M)||Revenue Growth (%)|
|Nano Dimension Ltd. (NNDM)||2.90||746.5||1,190|
|Cleanspark Inc. (CLSK)||4.45||183.7||412.8|
|Sunworks Inc. (SUNW)||1.79||58.8||405.7|
- Nano Dimension Ltd.: Nano Dimension is an Israel-based 3-D printing company. It provides additive manufacturing electronics systems to a range of sectors, including consumer electronics, medical devices, automotive, and more. The company announced in mid-May that its board of directors approved a share repurchase program to repurchase up to $100 million of its American depositary shares (ADS) over a one-year period.
- Cleanspark Inc.: Cleanspark is a bitcoin mining and energy technology company. The company mines for bitcoin and develops renewable energy projects.
- Sunworks Inc.: Sunworks is a provider of high-performance solar power systems. It provides solar power and battery storage solutions to customers in a range of industries and sectors, including agriculture, residential, commercial, and government. The company announced in mid-May financial results for Q1 of its 2022 fiscal year (FY), the three-month period ended March 31, 2022. Sunworks’ net loss widened to $8.2 million from $4.8 million in the year-ago quarter. Revenue grew 405.7% YOY. The company said it experienced strong residential demand for its products, more than offsetting lower commercial activity.
These are the tech penny stocks that had the best returns or smallest declines in total return over the past 12 months out of the companies we looked at. Stocks with returns in excess of 2,500% have been excluded as outliers.
|Tech Penny Stocks with the Best Performance|
|Price ($)||Market Cap ($M)||12-Month Trailing Total Return (%)|
|ServiceSource International Inc. (SREV)||1.43||142.9||24.4|
|Phunware Inc. (PHUN)||1.10||107.6||-17.9|
|Powerbridge Technologies Co. Ltd. (PBTS)||1.12||88.4||-27.3|
|Invesco S&P SmallCap Info Tech ETF (PSCT)||N/A||N/A||-33.0|
- ServiceSource International Inc.: ServiceSource International is a provider of business process-as-a-service (BPaaS) solutions that enable the acceleration of business-to-business digital sales and customer acquisition, engagement, and retention activities. The company announced in May that it has agreed to be acquired by Concentrix Corp. in an all-cash transaction. ServiceSource stockholders will receive $1.50 per share for each issued and outstanding share of common stock that they own. The transaction is expected to close in the second half of FY 2022.
- Phunware Inc.: Phunware provides software platforms used to engage, manage, and monetize mobile application portfolios and audiences. Its products include cloud-based mobile software development kits, audience management solutions, and related offerings.
- Powerbridge Technologies Co. Ltd.: Powerbridge Technologies is a China-based provider of application software and technology solutions. It provides solutions to the cryptocurrency mining industry and software-as-a-service (SaaS) platforms used for e-commerce, supply chain, and other applications.
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