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Top Robinhood Penny Stocks to Watch in February 2025

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Written by Timothy Sykes Fact-checked by Ellis Hobbs
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Penny stocks on Robinhood offer traders a low-cost way to enter the market, but they come with significant risks. These stocks, typically trading under $5 per share, experience rapid price fluctuations and require specialized trading strategies.

Robinhood remains a popular platform for beginners due to its commission-free trades and zero minimum deposit. However, active traders may find its lack of advanced trading tools limiting.

Want to stay ahead of the crowds? Sign up for my NO-COST weekly watchlist and get exclusive insights into the market’s biggest opportunities!

3 Robinhood Penny Stocks to Watch in February 2025

My top 3 Robinhood penny stocks to watch in February 2025 are:

  • NASDAQ: PLTR — Palantir Technologies Inc — The Hottest Stock in the Market
  • NASDAQ: RCAT — Red Cat Holdings Inc — The Palantir Sympathy Play Drone Stock
  • NASDAQ: QNTM — Quantum BioPharma Ltd — The Quantum Hype and Sober Sectors Collide

Check out my complete Robinhood penny stock watchlist here!

Stock TickerCompanyPerformance (YTD)
NASDAQ: PLTRPalantir Technologies Inc+ 43.94%
NASDAQ: RCATRed Cat Holdings Inc- 9.56%
NASDAQ: QNTMQuantum BioPharma Ltd+ 273.53%

Before you send in your orders, take note: 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. That’s what I’m trying to model here. Pay attention to the work that goes in, not the picks that come out.

Let’s get to the picks…

1. Palantir Technologies Inc. (NASDAQ: PLTR) — The Hottest Stock in the Market

After joining the S&P 500 in September, Palantir just DESTROYED earnings. For now, that’s put some of the market’s DeepSeek worries to rest, and is propelling this stock to new heights.

Key catalysts driving PLTR’s momentum:

  • Q4 2024 revenue growth: 36% year-over-year increase.
  • AI sector leadership: Despite the market’s worries about China’s DeepSeek and Trump’s tariffs, PLTR is still cashing those checks.
  • Government contracts: Palantir’s AI-driven defense and intelligence solutions make it a critical player in the market.

While PLTR is outside my preferred price range for trading, it serves as a key indicator for the broader tech sector’s health.

2. Red Cat Holdings Inc. (NASDAQ: RCAT) — The Palantir Sympathy Play Drone Stock

If PLTR’s stock is too expensive for you, give other defense stocks a look.

RCAT operates in the drone industry and has a history of spiking. In November 2024, the stock surged 380%* before pulling back. In December it spiked again.

Now, with Palantir moving like a penny stock, RCAT is showing some real sympathy momentum.

Why traders are watching RCAT:

  • December 2024: Announced a partnership with Palantir.
  • Strong technical support: The stock recently bounced off the $8 support level, showing strong support.
  • Historical volatility: RCAT has proven it can make major moves when momentum kicks in.

If momentum returns, this stock could present a solid trading opportunity.

More Breaking News

3. Quantum BioPharma Ltd. (NASDAQ: QNTM) — The Quantum Hype and Sober Sectors Collide

Quantum BioPharma Ltd. (QNTM) isn’t a quantum computing stock—it’s a pharmaceutical company. But in penny stocks, companies often add “quantum” to their name to generate hype.

Why traders are watching QNTM:

QNTM is a great example of how penny stocks can explode on news, but timing is everything.

 

* Past performance does not indicate future results

How to Trade Penny Stocks on Robinhood

Robinhood makes it easy to trade penny stocks, but its limitations can impact your trading strategy.

Key Considerations When Trading Penny Stocks on Robinhood

  1. Penny Stock Risks
    • Penny stocks move fast. Expect rapid gains—and potential losses—within minutes.
    • These stocks are often targets for pump-and-dump schemes.
  2. Robinhood’s Limitations
    • No access to many OTC stocks (the market where many of the penny stocks I trade can be found).
    • Slower trade executions compared to direct access brokers.
    • Fewer advanced research tools to analyze stocks in depth.

If you’re serious about trading, consider switching to brokers with better execution speed and more trading tools.

How to Find Penny Stocks on Robinhood

Robinhood doesn’t have a built-in penny stock scanner, but you can use these steps to locate stocks under $5:

  1. Go to Robinhood’s search bar and look for “Trending Lists.”
  2. Filter by industry or sector and sort by price (low to high).
  3. Set a maximum share price of $5 to filter for penny stocks.

When it comes to trading platforms, StocksToTrade is first on my list. It’s a powerful trading platform that integrates with most major brokers. I helped to design it, which means it has all the trading indicators, news sources, and stock screening capabilities that traders like me look for in a platform.

I use StocksToTrade to scan for news, tweets, earning reports, and more — all covered in its powerful news scanner. It also has a selection of add-on alerts services, so you can stay ahead of the curve.

Grab your 14-day StocksToTrade trial today — it’s only $7!

Are Robinhood Penny Stocks a Good Investment?

Robinhood penny stocks should be viewed as trading opportunities, not long-term investments.

  • Most analysts do not cover penny stocks because they are considered risky investments. That’s why Robinhood won’t let you trade some of the OTC spikers that I’ve traded (carefully) on my way to $7.9 million in career earnings.
  • These stocks lack solid fundamentals and are often highly speculative.
  • Always trade with a plan—don’t buy and hold these stocks hoping they’ll recover.

Final Thoughts: Is Trading Penny Stocks on Robinhood Worth It?

  • Robinhood is beginner-friendly, but lacks advanced trading features.
  • Penny stocks are volatile—perfect for traders, but not long-term investors.
  • Always trade with a strategy—watch for patterns, catalysts, and volume before entering a trade.

This is a market tailor-made for traders who are prepared. Penny stocks thrive on volatility, but it’s up to you to capitalize on it. Stick to your plan, manage your risk, and don’t let FOMO drive your decisions.

These opportunities are fast and unpredictable, but with the right strategy, you can make them work for you.

I recommend that you pay close attention to the first days of this possibly historic bull market.

If you want to know what I’m looking for—check out my free webinar here!

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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”