We recently compiled a list of the 10 Best American Penny Stocks to Buy Now.In this article, we are going to take a look at where Marqeta, Inc. (NASDAQ:MQ) stands against the other American penny stocks.
American penny stocks comprise shares of US-based companies that trade under $5 on public exchanges. Besides their perceived appeal to retail investors due to cheap price and the possibility to affordably amass a large number of shares, American penny stocks are distinct for representing two important factors – the small-cap factor and the US country factor. Readers should know that these two factors are known for significantly outperforming their broad market counterparts in the last 15 years after the Great Financial Crisis. For reference, small-cap factor has outperformed its large-cap counterparts throughout the 2010s as the economy experienced a relatively peaceful period with relatively low interest rates, which is highly favorable for small, high-growth businesses. Likewise, the US stock market has consistently outperformed the World stock market, including major markets like Europe, China, and Japan, thanks to superior productivity growth and valuation expansion.
The situation drastically reversed in late 2024 and early 2025 with the election of a new US administration. The US stock market underperformed by more than 15% markets like Germany and China since the beginning of the year. The small-cap factor fell out of favor relative to the large-cap factor. The former event was driven by aggressive Trump 2.0 cuts and tariff threats, which put the US export/import base at risk, while the latter is driven by market uncertainty and investors flying to safe assets such as gold, bonds, or mature large-cap stocks. We believe that both these developments are temporary shocks and do not represent structural or definitive changes. In this context, a smart way to make money in the market would be to take a contrarian bet and buy American small-cap and penny stocks while they are relatively underpriced vs. their global and large-cap counterparts.
First of all, we are firm believers that US investors should “stay at home” and continue to favor domestic stocks. The superior performance of the US stock market was not luck, but rather consistent productivity growth through deregulation, capital favoring risky but promising projects, and a more prominent hustle mentality. The European Central Bank confirms these findings and mentions that between Q4 2019 and Q2 2024, labor productivity per hour worked increased by 0.9% in the Euro area, whereas it increased by 6.7% in the US. This difference is significant and compounds over time, leading to drastic differences in stock price performance over 5-10 years or more. Odds are that the US will continue to outperform Europe and the rest of the world in productivity gains. According to analysts, Trump turmoil is a temporary thing; tariff uncertainty should naturally resolve at some point, through either a trade deal or a withdrawal by the President himself. Furthermore, the Trump 2.0 regime has some aces up its sleeve, such as tax cuts and further deregulation, which is a heaven for productivity growth. Europe, on the other hand, remains a slow bureaucratic machine that is fueling its economic growth through debt issuance and industrial-military projects that bring very little value added (for reference, the German €500 billion spending bill will mostly result in new missiles that will probably never be fired). Likewise, China has its own problems, such as stalled population growth and increasing threats of onshoring and outsourcing to India and other regions. India got itself stuck in a new war with Pakistan, which might negatively impact its investment climate and economic growth.
Second, small caps and penny stocks became cheaper due to recessionary threats and widespread signals that the US economy is slowing down. While many sectors, such as construction and industrial automation, are indeed in a slowdown, the stock market is a forward-looking animal that gauges developments that would impact the economy 6-12 months from now. In other words, the market is very likely to return to growth upon the slightest positive signal. We believe there are many indications that the US will be able to avoid a deep economic recession. Rumors, as well as thorough analysts from leading banks like JP Morgan, say that the tariff saga is approaching a possible end through a deal with China and other large trade partners. China is likely to sit at the negotiating table as its economic outlook has been deteriorating as well – it turns out that around 20 million jobs in the country are directly dependent on commerce with the US. Avoiding a trade deal with the US might be more catastrophic for China than it might be for the US. Also, the latest report shows that the US economy added 177,000 jobs in April, beating expectations by a wide margin, which indicates that CEOs are reluctant to downscale their business and rather anticipate a gradual rejuvenation in the business environment later in the year.
With that being said, contrary to the prevailing belief, our opinion is that the US economy is far from doomed. History shows that stock markets have always recovered and always scored new highs. In this context, the best American penny stocks could become favored again and outperform the broad market.
To compile our list of the best American penny stocks, we used a screener to identify companies based in the US with a share price below $5.00. Then we compared the list with Insider Monkey’s proprietary database of hedge funds’ ownership, as of Q4 2024, and included in the article the top 10 stocks with the largest number of hedge funds that own the stock, ranked in ascending order.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Is Marqeta, Inc. (MQ) the Best Low Priced Stock to Invest in For the Long Term?
A financial services team at work reviewing customer data on their digital bank.
Stock price as of May 6th: $3.90
Number of Hedge Fund Holders: 37
As a financial technology company, Marqeta, Inc. (NASDAQ:MQ) specializes in modern card issuing and payment processing solutions. Its open cloud-native platform enables businesses to create customized debit, credit, and prepaid card programs with features like Just-in-Time funding, dynamic spend controls, and tokenization for digital wallets. MQ operates globally and serves a diverse clientele across industries such as digital banking, on-demand services, expense management, and “Buy Now, Pay Later” providers.
Marqeta, Inc. (NASDAQ:MQ) delivered strong financial results in Q4 2024, with total process volume growing 29% YoY to $80 billion and net revenue increasing 14% to $136 million. The company achieved a gross profit of $98 million, up 18% from Q4 2023, and an adjusted EBITDA of $13 million, representing a 9% margin. These results demonstrate MQ’s ability to grow at scale while improving profitability. The company made significant progress in streamlining program launch timelines and enhancing bank partnerships, which should support future growth.
Looking ahead, Marqeta, Inc. (NASDAQ:MQ) is focused on three key strategic pillars: deepening platform breadth, expanding solutions offered, and strengthening leadership in payments innovation. The company announced a partnership with American Express to offer its network as a new option for credit and debit card programs starting later in 2025. MQ is also acquiring TransactPay to enhance its program management capabilities in Europe. For 2025, the company expects net revenue growth between 16% and 18%, with adjusted EBITDA margin in the range of 9% to 10%. These initiatives and projections indicate MQ’s commitment to sustainable, profitable growth, cementing the company’s third place on our list of the best American stocks to buy.
Overall MQ ranks 3rd on our list of the best American penny stocks to buy now. While we acknowledge the potential of MQ as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than MQ but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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