Artificial intelligence penny stocks sit at the intersection of two things traders love: volatility and a big story. These stocks trade at low prices, often under $5, and they belong to small companies trying to carve out a niche in AI, robotics, defense tech, and space. For active traders, that combination creates setups worth watching. For everyone else, it creates a reason to stay cautious.

This isn’t a buy list. This is a watchlist, and there’s a difference. I put these names on your radar because the setups are worth tracking, not because I think any of them will be the next NVIDIA.

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  • 1 10 Best AI Stocks for August 2026
  • 2 10 AI Stocks to Watch
    • 2.1 BigBear.ai Holdings Inc. (NYSE: BBAI) – The Defense AI Stock Whose Margins Just Jumped
    • 2.2 SoundHound AI Inc. (NASDAQ: SOUN) – The Voice AI Company That Just Crushed Its Quarter
    • 2.3 Red Cat Holdings Inc. (NASDAQ: RCAT) – The Defense Drone Maker With an NFL Deal
    • 2.4 Navitas Semiconductor Corp. (NASDAQ: NVTS) – The Power Chip Play Pivoting to AI Data Centers
    • 2.5 Ondas Inc. (NASDAQ: ONDS) – The Drone AI Platform With a $982 Million Army Ceiling
    • 2.6 Rigetti Computing Inc. (NASDAQ: RGTI) – The Quantum Name Winning Government Work
    • 2.7 D-Wave Quantum Inc. (NYSE: QBTS) – The Quantum Stock Whose Bookings Exploded
    • 2.8 Applied Digital Corporation (NASDAQ: APLD) – The AI Data Center Landlord Off Its High
    • 2.9 Applied Optoelectronics Inc. (NASDAQ: AAOI) – The Optical Supplier With a Record Quarter
    • 2.10 Nebius Group N.V. (NASDAQ: NBIS) – The AI Cloud Stock That Just Landed a Billion-Dollar Deal
  • 3 What to Look for in an Artificial Intelligence Penny Stock
  • 4 Where To Buy AI Penny Stocks
  • 5 AI Stocks Under $5
  • 6 FAQs

10 Best AI Stocks for August 2026

  • BigBear.ai Holdings Inc. (NYSE: BBAI) – The Defense AI Stock Whose Margins Just Jumped
  • SoundHound AI Inc. (NASDAQ: SOUN) – The Voice AI Company That Just Crushed Its Quarter
  • Red Cat Holdings Inc. (NASDAQ: RCAT) – The Defense Drone Maker With an NFL Deal
  • Navitas Semiconductor Corp. (NASDAQ: NVTS) – The Power Chip Play Pivoting to AI Data Centers
  • Ondas Inc. (NASDAQ: ONDS) – The Drone AI Platform With an FAA Head Start
  • Rigetti Computing Inc. (NASDAQ: RGTI) – The Quantum Name Winning Government Work
  • D-Wave Quantum Inc. (NYSE: QBTS) – The Quantum Stock Whose Bookings Exploded
  • Applied Digital Corporation (NASDAQ: APLD) – The AI Data Center Landlord Off Its High
  • Applied Optoelectronics Inc. (NASDAQ: AAOI) – The Optical Supplier With a Record Quarter
  • Nebius Group N.V. (NASDAQ: NBIS) – The AI Cloud Stock That Just Landed a Billion-Dollar Deal

Earnings season is doing the heavy lifting this month. Half this list has reported in the last week, and the reactions have been violent in both directions. One name beat earnings and jumped 22%. Another beat expectations and sold off.

The quantum group is running again after strong earnings, and lawmakers want a big increase in quantum defense spending. Meanwhile AI data center stocks have cooled. Names that ripped through the spring sit well below their highs, even as the contracts underneath them keep growing. That gap is where I’m looking.

I’m not the only one at StocksToTrade tracking this theme. $3 million trader Matt Monaco was early on the crypto and AI mega-trends. Now he’s focused on a handful of tiny stocks he thinks could power the next robotics wave. Take a look at the Monaco Letter here!

What is the most promising AI stock?

A sector leader like NVIDIA Corp (NASDAQ: NVDA) gets that title for a reason. But that’s an investor question, and we’re traders. The stocks on this list are the ones I’m watching for short-term setups, not making decade-long predictions about.

What are the top 3 AI stocks to buy now?

My top 3 AI stocks to watch, as long as their price action supports it, are SoundHound AI Inc. (NASDAQ: SOUN), Red Cat Holdings Inc. (NASDAQ: RCAT), and Navitas Semiconductor Corp. (NASDAQ: NVTS). All three have fresh catalysts and real institutional interest.

Which company is most advanced in AI?

NVIDIA is still the most advanced publicly traded company in AI infrastructure. Apple, Microsoft, Alphabet, and Meta are all building hard behind it. The names on this list are the small and mid caps riding downstream from that wave.

Which AI stocks have a Strong Buy analyst rating?

Among the sector leaders, NVIDIA, Microsoft, Alphabet, and Meta keep drawing Strong Buy calls. On this watchlist, SoundHound carries a Strong Buy with an average target of $12.75. Rigetti has a consensus target near $29.65, though that gap to the current price tells you how much execution risk is baked in.

Take note before you send in any orders. I have NO plans to trade these stocks unless they fit my preferred setups. This is only a watchlist.

The best traders watch more than they trade. Pay attention to the work that goes in, not the picks that come out.

10 AI Stocks to Watch

My top AI stock picks for August — rated on chart pattern, price action history, and catalyst — include the following:

If you want to see the setups I’m watching every week, that’s what StocksToTrade Advisory is built for. You get my handpicked trades, my proprietary scans, and my Money Monday alerts the moment my scanner flags a high-probability setup.

BigBear.ai Holdings Inc. (NYSE: BBAI) – The Defense AI Stock Whose Margins Just Jumped

My first AI penny stock pick is BigBear.ai Holdings Inc. (NYSE: BBAI).

BBAI is the lowest-priced stock on this list at around $3. That is not the same as cheap, and the losses below make that clear. It builds decision and vision software for national security and supply chain customers. Second-quarter revenue came in at $36.7 million, up 13% from a year ago and slightly ahead of expectations. The number that matters more is the margin. It jumped to 32.8% from 25%, which shows pricing power and better cost control rather than hype. Read more on what’s happening with BBAI.

Dutch regulators also cleared its Pangiam threat detection platform for aviation security. That is its first major European certification and a real credibility win in airport screening. Full-year guidance sits at $135 million to $165 million.

The risks are still heavy. BBAI lost $25.7 million last quarter and burned about $22.5 million more cash than it took in. It does hold roughly $410 million in cash with no long-term debt, so running out of money is not the near-term worry. Profitability is nowhere close.

Why I Like It

The stock climbed from $2.59 on July 29 to around $3.09 in early August, and it has been building support just under $3. A margin jump that big on a $3 stock is the kind of quiet change that shows up in the price later.

  • Bullish scenario: Holding above $3 with another contract win puts the $5 analyst target in play. This stock moves double digits on far less.
  • Bearish scenario: Losing $3 and the base breaks. The late-July low near $2.59 is the next reference.

SoundHound AI Inc. (NASDAQ: SOUN) – The Voice AI Company That Just Crushed Its Quarter

My second AI penny stock pick is SoundHound AI Inc. (NASDAQ: SOUN).

SoundHound builds the voice AI behind drive-thrus, cars, and customer service lines. It reported record second-quarter revenue of $61.9 million on August 5, up 45% from a year ago. That blew past the $52.4 million analysts expected. Management raised full-year guidance to $230 to $260 million, and the stock jumped 22% on the news.

Then it gave a chunk of it back, closing near $7.46 on Monday. Analysts are split. The average target is $12.75, but DA Davidson trimmed to $10 and Piper Sandler cut to $7 with a Hold. The risk is cash burn, roughly $60 million in the first half, and a pending LivePerson acquisition that still needs a shareholder vote.

Why I Like It

A record quarter that the stock partly gave back is the kind of setup I watch. The company is still down about 35% for the year, so the beat hasn’t been fully absorbed. Support sits near $6.82 and $6.52.

  • Bullish scenario: Holding above $6.80 with follow-through on the raised guidance opens a run back toward $10.
  • Bearish scenario: Losing $6.50 and the post-earnings pop is fully unwound. The 52-week low near $5.65 is the next reference.

Red Cat Holdings Inc. (NASDAQ: RCAT) – The Defense Drone Maker With an NFL Deal

My third AI penny stock pick is Red Cat Holdings Inc. (NASDAQ: RCAT).

Red Cat makes military drones, including the Black Widow system built for the US Army. It reported second-quarter results on August 6 and missed, losing 26 cents a share against the 17 cents analysts expected. The stock surged about 22% anyway, because management stood behind full-year revenue guidance of $150 million to $180 million. It followed that with a multiyear partnership with the NFL’s Washington Commanders. Read more on what’s moving RCAT.

It trades near $10.62 with a 52-week range from $5.77 to $18.78. Needham cut its target to $15 from $20 but kept a Buy, and Northland stayed bullish. The company holds about $131.9 million in cash and short-term investments with very little debt.

Two risks deserve more weight than the earnings miss. China added Red Cat to its export control list, which blocks Chinese firms from shipping it dual-use parts and raises real supply chain questions. And CEO Jeffrey Thompson sold 150,000 shares for about $1.28 million in July, though he still holds roughly 12.76 million.

Why I Like It

A stock that rallies 22% on an earnings miss is telling you something. Buyers care more about the guidance and the contracts than the quarterly loss. That is usually a sign the story has momentum behind it.

  • Bullish scenario: A hold above $10 with more contract news opens the path back toward the $15 analyst target.
  • Bearish scenario: Below $9.80 and the post-earnings move is done. The 52-week low near $5.77 shows how far this can fall.

My fourth AI penny stock pick is Navitas Semiconductor Corp. (NASDAQ: NVTS).

Navitas makes power chips, and it is rebuilding the whole company around AI. Second-quarter revenue came in around $10.5 million, just above expectations, and the loss matched forecasts. The real news was the guidance. Management sees third-quarter revenue near $13.5 million against the $11.1 million analysts modeled, which is about 28% growth in a single quarter. Read more on what’s moving NVTS.

The plan shifts the business away from low-end phone chargers toward high-power parts for AI data centers and the grid. AI infrastructure should top a third of sales by year end. The company holds $557 million in cash and just signed a licensing deal with Magnachip. The stock ripped from $10.32 on August 3 to $13.51 by August 7 and has since eased back near $11.

Why I Like It

Guidance that beats by more than 20% is rare, and it means the pivot is working faster than Wall Street modeled. Jefferies still has it at Hold with a $13 target, while another shop carries a $21 target on a record backlog running into 2027. That disagreement creates the volatility I want.

  • Bullish scenario: Reclaiming the $13.50 August high on volume puts the $21 target in the conversation.
  • Bearish scenario: Losing $10 and the whole August move gives back. A patent fight with Renesas is a live legal risk.

Ondas Inc. (NASDAQ: ONDS) – The Drone AI Platform With a $982 Million Army Ceiling

My fifth AI penny stock pick is Ondas Inc. (NASDAQ: ONDS).

Ondas has turned into one of the loudest defense stories on the board. Its Mistral unit landed another US Army order above $50 million for lethal unmanned systems. That lifts total awards under the program past $240 million, against a ceiling of $982 million. Management also raised full-year revenue guidance to at least $525 million, far above the $395 million Wall Street had modeled, and announced an $875.8 million acquisition of DZYNE Technologies. Read more on what’s moving ONDS.

The stock ran from about $6.53 in mid-July to a close of $9.74 on August 11, roughly 49% in under a month. Then it reported second-quarter results on August 13, spiked over $10 in premarket, and faded 8.6% to settle near $8.90. Needham trimmed its target to $19 from $23 but kept a Buy, pointing to a $1.5 billion expansion in the opportunity pipeline.

The risk is the price you pay for it. Ondas trades at a rich multiple on about $50.7 million of revenue, so the whole thing rests on turning that backlog into delivered product. Deliveries under the initial $190.8 million contract start this quarter.

Why I Like It

Guidance going from $395 million to $525 million in one step is a real reset, not a press release. The FAA approval to fly beyond the operator’s line of sight is also a genuine head start that takes years to earn.

  • Bullish scenario: Reclaiming $10 on confirmation that deliveries are shipping opens the next leg higher.
  • Bearish scenario: Losing the mid-$8s and the August breakout gives back. A stumble on delivery timing hits this hard at this valuation.

Rigetti Computing Inc. (NASDAQ: RGTI) – The Quantum Name Winning Government Work

My sixth AI penny stock pick is Rigetti Computing Inc. (NASDAQ: RGTI).

Rigetti builds superconducting quantum computers and rents access to them over the cloud. It reported second-quarter results on August 6, and the quantum group has been rallying since. The company is delivering a 9-qubit system to the Pittsburgh Supercomputing Center under a $5 million National Science Foundation grant, working alongside HPE. It also won a contract to deliver a 108-qubit machine to India’s national computing center.

The stock trades in the mid-teens, down roughly a third for the year, with a consensus target near $29.65. It holds about $569 million in cash. The risk is the valuation. Rigetti trades at hundreds of times sales, and losses stayed high last quarter. Lawmakers are pushing a 68% increase in quantum defense spending, which is the policy tailwind to watch.

Why I Like It

Government contracts are the only real revenue in quantum right now, and Rigetti keeps winning them. The stock is down a third on the year with a target near double the price. Gaps like that close fast when sentiment turns.

  • Bullish scenario: A quantum funding bill or another government contract can move this hard. These names run in groups, not alone.
  • Bearish scenario: Quantum is still years from broad commercial use. Any risk-off rotation hits this group first and hardest.

D-Wave Quantum Inc. (NYSE: QBTS) – The Quantum Stock Whose Bookings Exploded

My seventh AI penny stock pick is D-Wave Quantum Inc. (NYSE: QBTS).

D-Wave takes a different approach to quantum than Rigetti, and right now its numbers look better. Bookings jumped more than eleven times over in its latest quarter, which is the strongest demand signal anyone in this group has produced. The stock trades near $21 and has been part of the broad quantum rally following earnings season.

The risk applies to the whole sector. Bookings are not revenue, and revenue is not profit. Quantum companies burn cash while the market is still forming. At this valuation, the market is paying for a future that has to arrive on schedule.

Why I Like It

A bookings number that big is hard to argue with, and it separates D-Wave from the pack on actual customer demand. When a sector rallies together, I want the name with the strongest number behind it.

  • Bullish scenario: Continued quantum sector momentum plus follow-through on those bookings keeps this trending with the group leaders.
  • Bearish scenario: The quantum trade cools and this gives back fast. Watch the whole group, not just this ticker.

Applied Digital Corporation (NASDAQ: APLD) – The AI Data Center Landlord Off Its High

My eighth AI penny stock pick is Applied Digital Corporation (NASDAQ: APLD).

Applied Digital builds and runs the data centers that AI companies rent to train their models. Fifteen-year leases with the biggest cloud companies guarantee it more than $30 billion in future rent. That climbs toward $70 billion if those leases get renewed. The stock trades near $32.43. Read more on what’s moving APLD.

It peaked near $49 in late May and came all the way back to the high $20s before this week’s bounce. Contracted revenue went up over that same stretch. The risk is how much money this takes. Data centers cost a fortune to build, the quarterly losses are wide, and recent filings flagged insider selling.

Why I Like It

When price and news move in opposite directions, I pay attention. The leases got bigger while the stock got cheaper. That gap is the setup.

  • Bullish scenario: Reclaiming the mid-$30s on volume signals the pullback is over and opens a path toward the spring highs.
  • Bearish scenario: Losing the mid-$20s and AI infrastructure stocks are telling you something as a group.

Applied Optoelectronics Inc. (NASDAQ: AAOI) – The Optical Supplier With a Record Quarter

My ninth AI penny stock pick is Applied Optoelectronics Inc. (NASDAQ: AAOI).

AAOI is not a penny stock anymore, and it belongs here anyway. It traded under $20 as recently as last year. It makes the optical parts that move data between chips inside AI data centers, and demand has been extraordinary. Second-quarter revenue hit a record $190.5 million, up 85% from a year ago. Management guided third-quarter revenue to $255 million to $290 million. Read more on what’s moving AAOI.

The stock has run from $103.02 on July 20 to about $149.63 today. It opened at $130.39 this morning and pushed to $153.39 before settling back. Management says demand for its 800G and 1.6T products will outrun capacity through at least mid-2027. Raymond James raised its target to $178, Needham reiterated a Buy at $190, and the average Street target sits near $166.67.

The risk is how violently this trades. There are now leveraged funds that move two times AAOI in each direction, which speeds up both the runs and the flushes. It fell 8.9% in a single session earlier this month. Customer concentration means one soft quarter from a big buyer undoes months of gains.

Why I Like It

This is the strongest set of numbers on the list. Revenue up 85% with a Texas factory expansion behind it is real demand, not a story. I keep it here as the reminder that today’s penny stock can be next year’s large cap.

  • Bullish scenario: Holding the $149 area with another large order puts the $178 to $190 targets back in view.
  • Bearish scenario: Losing $130 and the August run unwinds fast. Respect how quickly the leveraged money reverses.

Nebius Group N.V. (NASDAQ: NBIS) – The AI Cloud Stock That Just Landed a Billion-Dollar Deal

My tenth AI penny stock pick is Nebius Group N.V. (NASDAQ: NBIS).

Nebius builds and runs its own AI cloud, competing with the hyperscale giants. It jumped 17.3% on August 12 after selling more than $1 billion of computing power to Reflection AI under a multi-year deal. That contract answers the question hanging over every AI cloud company. Will anyone actually rent all that capacity. Read more on what’s moving NBIS.

The stock pulled back to $184 on August 10, bounced to about $193 the next day, then ripped on the Reflection news. First-quarter revenue grew 684% from a year ago, and NVIDIA has put $2 billion behind the company. The 52-week range runs from $62.01 to $299.86, with a June high of $286.69.

The risk is the spending, with $20 billion to $25 billion budgeted for this year. Michael Burry has disclosed a short position. DA Davidson cut its target to $175 over delays at the New Jersey data center site, while Goldman Sachs carries a street-high target. That spread tells you nobody agrees on this one.

Why I Like It

A billion-dollar contract, a high-profile short, and a target range that wide is a recipe for big moves. I don’t need to pick a side to trade the volatility. I do need to size for it.

  • Bullish scenario: More contracts like the Reflection deal and the short thesis gets squeezed back toward the June high.
  • Bearish scenario: More delays in New Jersey and Burry looks right. Below $180 the next real support is well under current levels.

*Past performance does not indicate future results

What to Look for in an Artificial Intelligence Penny Stock

Choosing the right AI penny stock has nothing to do with the company’s technology and everything to do with the setup. Whether the company builds drones, satellites, or brain scanners, the trading rules are the same. Here’s what matters.

Focus on stocks that show a tradeable pattern on the chart. This means consistency and predictability in how the price moves. A stock that respects support and resistance levels is one you can build a plan around. A stock that moves randomly on no volume is one you skip.

A small float matters. Stocks with fewer shares available for trading can move faster on lower volume. That’s the opportunity. It’s also the risk. Low-float stocks can drop just as fast as they spike, so position sizing becomes the real edge.

Look for unusual trading volumes. Volume spikes before price spikes. When a stock that normally trades 500K shares suddenly does 5M, something is happening. That’s the signal to pay attention, not necessarily to buy, but to start watching closely.

These are the building blocks I use to find setups in AI penny stocks. Let me break them down.

Exhibits a Tradeable Pattern on its Stock Chart

A tradeable pattern means the stock moves in ways you can anticipate. Consistent uptrends, clean pullbacks to support, or repeatable bounce zones. These patterns give you entry points with defined risk. A stock that gaps randomly and never holds a level is a slot machine, not a trade.

My years of teaching traders have shown me one thing: stocks with clean patterns produce better results over time. They let you apply rules instead of guesses. That’s the whole game.

AI tools can help you spot these patterns faster. But nothing replaces looking at the chart yourself and asking: does this stock respect levels, or does it just do whatever it wants?

Is a Low-Float Stock

Low-float stocks are appealing because a small amount of buying pressure can move the price fast. When there are fewer shares available, each order has more impact. That’s how you get 30% moves in a day on a penny stock.

The flip side is real. These stocks can be manipulated, they can reverse hard on no news, and the bid-ask spreads can eat into your profits. You need to understand what you’re trading before you size up.

Trading low-float stocks requires discipline. Have a plan. Know your entry, your stop, and your target before the market opens. I’ve seen too many traders get caught in a low-float squeeze because they didn’t define their risk.

Exhibits an Unusual Trading Volume

Unusual volume is the single biggest tell in penny stock trading. When a stock that normally does 200K shares suddenly prints 2M, something has changed. Maybe it’s a news catalyst. Maybe it’s a whale accumulating. Maybe it’s retail FOMO. The reason matters less than the fact that it’s happening.

Volume precedes price. This is one of the oldest rules in trading and it still works. Use your screening tools to find these volume spikes early. StocksToTrade’s scanner is built for exactly this.

From my experience, stocks with unusual volume offer the best short-term setups. They provide the momentum you need for quick entries and exits. But always check the context: is the volume on an up move or a down move? That distinction changes everything.

Is a Former Runner

A former runner is a stock with previous spikes on its chart. It has run before, and that history makes it more likely to run again when the right catalyst appears. Past performance doesn’t guarantee future results. But chart history does tell you what a stock is capable of doing.

Stocks like Red Cat Holdings (NASDAQ: RCAT) and SoundHound AI (NASDAQ: SOUN) on this list are former runners. They have shown they can move 50% or more in a short period. That kind of chart history attracts momentum traders, and that attention creates the next setup.

My approach to building watchlists is built around former runners. Find the stocks with a history of big moves, then wait for the setup to line up. Patience is the part most traders skip.

Gets Frequent Media Attention

Media attention drives volume, and volume drives price. AI stocks have had one of the loudest media cycles in market history. Every CNBC segment, every analyst upgrade, and every Reddit thread about a stock creates a potential catalyst.

Staying on top of the news cycle is part of the job. Use your tools to monitor mentions and sentiment. The best trades often come right after a media catalyst, when volume is highest and the setup is cleanest.

Where To Buy AI Penny Stocks

When looking to buy AI penny stocks, consider both major exchanges and over-the-counter (OTC) markets.

The NYSE and Nasdaq offer more regulated environments with higher listing standards. OTC markets have moonshot spikers but also more disaster stories. Your risk tolerance and experience level should guide which playground you choose.

NYSE/Nasdaq Penny Stocks

Penny stocks listed on the NYSE or Nasdaq meet stricter listing requirements. That means more transparency, more analyst coverage, and more institutional participation. Every stock on this watchlist is NYSE or Nasdaq listed.

Stocks on these exchanges have better data quality. That helps you build better plans with more reliable information. ETFs that focus on technology and AI sectors can also include penny stocks from these exchanges.

OTC Penny Stocks

OTC penny stocks carry higher risk but can offer larger moves. The regulatory requirements are lighter, which means less transparency and more potential for manipulation.

There are AI opportunities in the OTC market. My advice is to approach them with extra caution, smaller position sizes, and tighter stops. These are not the stocks for beginners. OTC trading requires a solid understanding of market dynamics and the discipline to cut losses fast.

AI Stocks Under $5

The appeal of AI stocks under $5 is straightforward: small price, big potential percentage moves. When a $3 stock moves to $5, that’s a 67% gain. When a $300 stock moves to $302, nobody cares. The math favors penny stocks for traders looking for outsized moves on small capital.

But the risks match the opportunity. These stocks are volatile because they’re speculative. The companies behind them are often unprofitable, early-stage, or facing existential challenges. Minor negative news can send them down 30% in a session.

The key to trading AI stocks under $5 is selectivity and discipline. Don’t chase every runner. Focus on the names with real catalysts, clean chart patterns, and defined risk levels. Cut losses quickly. Take profits when the trade works. And never invest in these stocks for the long term. Only trade them.

What AI penny stocks do you have on your watchlist? Let me know in the comments!

FAQs

How can AI platforms like ChatGPT contribute to the growth of penny stocks in the AI industry?

AI platforms are driving demand across industries. That demand creates revenue opportunities for companies in the AI space, including those trading as penny stocks. The key is separating companies with real AI products from those just using AI as a marketing buzzword.

Where can I find the latest news and information about AI penny stocks?

For the latest news and market updates on AI penny stocks, check the StocksToTrade news section. It provides real-time coverage, links to reliable sources, and analysis of the catalysts driving price action in AI stocks.

How can I assess the value of an AI penny stock?

Value in penny stocks is less about traditional fundamental metrics and more about the setup. Look at trading volume, float size, recent price action, and upcoming catalysts. Revenue and earnings matter, but chart structure and risk/reward are what drive trading decisions.

When should I consider selling my AI penny stocks?

Sell when you’ve hit your target or when the trade is no longer working. If a stock breaks your stop level, get out. If it hits your profit target, take the gain. The worst decision is holding a penny stock hoping it will come back. Cut losses fast and let winners run to your plan.