Stocks trading under $5 can attract investors looking for affordable entry points and near-term upside. These lower-priced shares are often tied to smaller companies, turnaround stories or industries going through rapid change. When business momentum improves, stock prices can move quickly.
That potential comes with trade-offs. Stocks under $5 tend to be more volatile, less liquid and more sensitive to news than larger, established companies.
The picks below focus on companies with identifiable business drivers and public disclosures investors can follow — rather than purely speculative price moves.
At a Glance: Stocks Under $5
Company Ticker Industry Risk Profile Why It Stands Out SoFi Technologies SOFI Fintech High Growing member base and product expansion Ford Motor Co. F Automotive Medium Cyclical recovery and EV transition Nokia Corp. NOK Telecommunications Medium Global network infrastructure exposure Sirius XM Holdings SIRI Media Medium Subscription-based cash flow Palantir Technologies PLTR Data analytics High Government and enterprise contracts Prices fluctuate and may move above or below $5 depending on market conditions.
What Makes Stocks Under $5 Different?
Lower-priced stocks often belong to companies earlier in their business lifecycle or facing temporary challenges. According to the U.S. Securities and Exchange Commission, smaller and lower-priced stocks can experience larger price swings and lower liquidity, increasing both potential returns and potential losses.
Because of this, many investors treat sub-$5 stocks as tactical or speculative positions, rather than long-term core holdings.
Best Stocks Under $5 To Consider
SoFi Technologies (SOFI)
SoFi operates a digital financial services platform offering lending, banking and investing products. According to company filings, membership growth has continued as it expands beyond student loan refinancing. Profitability remains a key near-term focus, making the stock sensitive to earnings updates.
Ford Motor Co. (F)
Ford is one of the most recognizable automakers globally and periodically trades below $5 during industry downturns. Company disclosures highlight continued investment in electric vehicles and restructuring efforts. Cyclical auto demand and margin pressures are the main drivers of short-term price movement.
Nokia Corp. (NOK)
Nokia provides network infrastructure to telecom operators worldwide. According to company reports, demand for 5G equipment remains a core growth driver. Competition and pricing pressure weigh on margins, but long-term contracts offer revenue visibility.
Sirius XM Holdings (SIRI)
Sirius XM generates revenue primarily from subscription-based audio services. Company filings show relatively stable cash flow compared to many small-cap stocks. Slower growth and competition from streaming platforms remain ongoing challenges.
Palantir Technologies (PLTR)
Palantir develops data analytics platforms for government and commercial clients. According to company disclosures, revenue growth is driven by long-term contracts and expanding enterprise adoption. The stock is sensitive to contract announcements and profitability trends.
Risks Investors Should Understand
Stocks under $5 carry heightened risk. The SEC warns that lower-priced stocks can be subject to sharp price movements, limited analyst coverage and higher susceptibility to market sentiment shifts. Liquidity constraints can also make it harder to exit positions quickly.
Because of these risks, diversification and position sizing are especially important.
How Stocks Under $5 Fit Into a Portfolio
Lower-priced stocks are often used as satellite positions alongside diversified holdings. According to the Financial Industry Regulatory Authority (FINRA), speculative investments should generally make up only a small portion of a well-balanced portfolio.
Investors may also consider using limit orders and predefined exit strategies when trading lower-priced stocks.
Final Take to GO
Stocks under $5 can offer meaningful upside when business conditions improve, but they also come with higher volatility and downside risk. Companies with clear operations, recurring revenue or identifiable turnaround efforts tend to be more resilient than purely speculative names.
For most investors, these stocks work best as small, carefully monitored positions, not long-term portfolio anchors.
Best Stocks Under $5 FAQ
- What are stocks under $5?
- Stocks under $5 are shares of companies trading at relatively low prices, often due to size, volatility or business challenges.
- Are stocks under $5 considered penny stocks?
- Some may fall into the penny stock category, though definitions vary by regulator and exchange.
- Why are stocks under $5 risky?
- They tend to be more volatile, less liquid and more sensitive to market news.
- Can stocks under $5 generate big returns?
- Yes, but higher potential returns come with a greater risk of loss.
- How much of a portfolio should be in stocks under $5?
- Many investors limit exposure to a small percentage of their overall portfolio due to higher risk.
Daria Uhlig contributed to the reporting for this article.
Data is accurate as of Jan. 21, 2026, and is subject to change.