Investors are once again turning to riskier assets after the latest round of tariff talks and the pause with China. Stocks have rallied off their lows, and the S&P 500 is positive again year-to-date. Goldman Sachs has lifted its S&P 500 target to 6,500, so it sees the stock market delivering one more green year.
If you are also in the bull camp, it’s worth looking into some penny stocks with high upside potential. A surging broader market is going to disproportionately benefit these stocks, since mega-cap stocks are still expensive, and those in the middle aren’t that cheap either. The Russell 2000 (a U.S. stock market index that makes up the smallest 2,000 stocks) is down 6.63% year-to-date. A rebound could be around the corner.
Nauticus Robotics (NASDAQ:KITT) makes ocean robots and related software for the ocean industry. Recent developments here have been quite under-the-radar, but it’s worth looking into. President Donald Trump signed an executive order last month to expedite deep-sea mining in both U.S. and international waters, and several big-name ocean mining companies surged immediately.
KITT stock is quite unknown as it only has a $35 million market cap, and many are unaware how much it could benefit from the upcoming ocean mining boom.
Deep-sea mining operations require extensive surveying and mapping of the ocean floor to identify mineral-rich deposits. Nauticus’ flagship AUV, Aquanaut, is designed specifically for this sort of high-resolution data collection and could see a significant increase in demand. It also has the software and data suite for ocean mining and scanning.
KITT stock could thus benefit massively in the coming years as companies start mining and scanning the ocean more extensively.
The gambling sector has seen explosive growth in the U.S. and worldwide, and Table Trac (OTCMKTS:TBTC) is a solid bet. It sells software to gambling companies to use in their gambling facilities.
Software companies are usually high margin, and the same is the case here. Not only is this penny stock profitable, it also pays a dividend that yields 1.78%. You’d rarely find a penny stock with the characteristics TBTC has.
It has $7 million in cash vs. very little debt. It’s very impressive for a company with a market cap of less than $21 million. You’re only paying 13.5 times earnings for a company with a 16.5% annual 3-year growth rate and the growth in the coming years is likely to accelerate. Gambling companies are starting to modernize and are spending big on efficiency using software. The industry is massive, and a “small” contract could turn this penny cap into a multibagger.
Laser Photonics (NASDAQ:LASE) is an industrial laser systems company. Their main goal is to replace older, often dirtier and less efficient, industrial methods with modern laser technology. Traditionally, sandblasting and abrasive blasting is used, but this company does it without significantly damaging the material underneath. The systems can be handheld for smaller jobs or integrated into larger, automated robotic setups for big industrial tasks. In turn, this can lead to long-term cost savings.
The shift to onshoring and investing in U.S. manufacturing could lead to a lot more growth here in the coming years. On top of that, there’s a significant global shift towards smart manufacturing and automation. Laser systems go hand in hand with the AI and robotics trend as well. It is also developing its Laser Shield Anti-Drone (LSAD) technology.
There’s a good chance of it landing a big contract in the coming quarters since it has a $45 billion addressable market across some of the hottest sectors, which also includes the semiconductor sector.
It spiked to $18.8 in the third quarter of Q3 2024 due to the AI/robotics frenzy, but has sold off since. It has recovered 8.3% in the past month after bottoming out, and I see more upside.
