Top 5 ASX penny stocks to watch in 2026

What are penny stocks?

In Australia, many classify penny stocks as those under one Australian dollar per share, while some use the definition loosely to describe any company with smaller share prices.

Penny stock share trading requires a high degree of due diligence, as they represent smaller propositions that usually come with a far higher risk-to-reward ratio. Ensure you have adequate risk management in place before you consider trading penny stocks.

It’s also worth noting that penny stocks can have high market caps if a large number of shares have been issued.

What to know about ASX penny stocks: the good and the bad

ASX penny stocks are often thinly traded. This means that, unlike the blue-chip shares of the ASX 200, where every stock usually has a wall of potential buyers, there might not always be enough buyer demand when share traders want to sell.

In addition, penny stocks are often loss-making, using any money available to invest in growth. This makes them highly speculative investments. Moreover, they usually receive little to no analyst coverage, making informed trading decisions difficult.

They can also even lack in-depth trading records. And some penny stocks are notorious for diluting stock value by issuing additional shares.

These risk factors mean that for most share traders, penny stocks should only form a small percentage of their portfolio. And for those closer to retirement who are investing over short timeframes, they arguably should be avoided altogether.

Of course, despite these significant risks, ASX penny stocks hold a unique advantage. The right pick can be massively more lucrative than an investment in more established peers.

However, it’s important to be aware of the echo chamber of success. Skyrocketing penny stocks are extremely likely to hit mainstream news, but the success stories are significantly outnumbered by the failures. Moreover, once an ASX penny stock hits the headlines, it's often too late to partake in its success.

But many of the largest blue-chip stocks on the ASX began trading as penny stocks. For example, one of the largest stocks on the ASX, BHP, used to be a penny stock back in 1999. Afterpay was a penny stock as recently as 2017. International market titans Apple and Amazon also once qualified as penny stocks for share traders with the foresight and luck to invest early.

Top 5 ASX penny stocks to watch in 2026

We selected these penny stocks based on three main factors:

• Share price: As of the time of writing this article, all the shares on our list have a stock price of under A$1
• Diversification: We cover a range of industries, including mining, aerospace and defence, artificial intelligence (AI) and industrial specialties
• Six-month share price: Either the share price has grown significantly over the past six months, or it’s seen its fair share of volatility, opening up opportunities for share traders and CFD traders to take advantage of

Overview of the penny stocks in this article

All the penny stocks on our list are available for share trading with us, while HighCom, Latitude 66 and Javelin Minerals are available to CFD trade with us.

All figures are accurate as of 11 February 2026.

1. HighCom Limited (ASX: HCL)

Industry: Aerospace and defence

Market cap: A$23.10 million¹

Share price: A$0.21²

HighCom, formerly known as Xtek, is an Australian aerospace and defence technology company that operates two key divisions: HighCom Armor and HighCom Technology.

The Armor division designs and manufactures protective solutions such as ballistic body armour, helmets and composite armour panels for military law enforcement and first responder markets domestically and internationally.

The Technology division focuses on supplying small uncrewed aerial systems and sensor payloads to defence and security agencies, among other services.

Over the past six months, the company has seen substantial share price volatility, driven by periodic contract announcements, organisational changes and operational updates. HighCom has secured several substantial orders for ballistic products and has launched a direct-to-consumer sales channel in the US to reach more than institutional buyers.

Highlights:

• For CFD traders, HighCom’s volatility makes it attractive because short-term movements can present opportunities for gains on both rising and falling prices. The share price can respond quickly to announcements around contracts, regulatory developments or shifts in defence spending sentiment
• At the same time, the underlying business narrative offers longer term visibility into defence technology demand, which may appeal to longer-term share traders watching the sector for growth
• Its share price has declined by 54.84% over the past six months, but is up 23.53% over the past year³

2. Laserbond Limited (ASX: LBL)

Industry: Industrial specialties

Market cap: A$65.01 million⁴

Share price: A$0.55⁵

Laserbond is an industrial technology company that specialises in advanced surface engineering services for industrial components operating in severe environments.

Using proprietary laser cladding technology, the company reconditions worn parts and produces products that deliver extended service life in industries such as mining, oil and gas, and manufacturing.

The past six months have seen Laserbond’s share price trade in a range characteristic of smaller industrial stocks, with moderate moves that reflect a cautious but engaged market response to its announcements and broader industrial conditions.

The company’s operational profile displays strong capital efficiency and balance sheet metrics typical of established engineering firms, even as its valuation remains within the penny stock category.

Highlights:

• The company might appeal to CFD traders because of its tendency to exhibit tradable price swings around industry news and broader macroeconomic factors
• Its share price has risen by 1.85% over the past six months, and fallen by 7.56% over the past year⁶

3. EchoIQ Limited (ASX: EIQ)

Industry: Artificial intelligence

Market cap: A$310.55 million⁷

Share price: A$0.51⁸

EchoIQ, which evolved from Veriluma, is an Australian healthcare technology company specialising in AI-driven diagnostic tools designed to enhance the detection and management of structural heart disease.

The company’s flagship product family uses machine learning and AI to assist cardiologists in identifying conditions such as aortic stenosis diastolic dysfunction and heart failure by improving consistency and accuracy in interpreting echocardiogram data.

Over the past six months, EchoIQ has seen elevated share trader interest, partly due to news around clinical validation and steps towards regulatory milestones. Independent clinical validation results showing the performance of its AI diagnostics tools and participation in healthcare conferences have contributed to increased visibility among healthcare investors.

Highlights:

• For share traders, EchoIQ’s long-term structural story can appeal to buy and hold investors who believe in the deepening role of AI in healthcare and diagnostics
• Its share price has shot up by 142.86% over the past six months⁹

4. Latitude 66 Limited (ASX: LAT)

Industry: Precious metals

Market cap: A$27.19 million¹⁰

Share price: A$0.155¹¹

Latitude 66, formerly known as DiscovEx Resources Limited, is a resource exploration and development company focused on identifying and advancing precious metals and critical minerals projects in Australia and Europe.

Its flagship assets include the Kuusamo Schist Belt (KSB) gold-cobalt project in Finland, where the company is involved in both gold and cobalt exploration and evaluation.

In the past six months, the company’s journey has featured significant news around divestments and exploration milestones. It completed a strategic sale of its interest in the Greater Duchess copper-gold joint venture for a package of cash and shares that provided non-dilutive funding to accelerate exploration at core assets. It’s also been preparing for exploration programmes near high-profile targets in Western Australia and collaborating with geophysical programmes in Finland that benefit from EU-funded initiatives.

These developments have contributed to periods of share price momentum and heightened market interest, with exploration news often triggering spikes as traders react to potential resource expansion stories.

Highlights:

• Latitude 66 is more suited to share traders who are drawn to the long-term potential of discovery-driven stories, where value is generated through drilling results and strategic capital management
• Those who are patient and comfortable with the inherent uncertainty of exploration can find Latitude 66 compelling as positive news flow around exploration success or asset development can translate into sustained uptrends in the share price
• Its share price has grown by 342.86% over the past six months¹²

5. Javelin Minerals Limited (ASX: JAV)

Industry: Other metals/minerals

Market cap: A$36.40 million¹³

Share price: A$0.14¹⁴

Javelin Minerals, formerly known as Victory Mines, is an exploration company focused on gold and base metals projects in Western Australia.

It has built a portfolio of assets in established mineral provinces with existing infrastructure, positioning itself to advance projects through drilling and exploration programmes.

The company’s strategy centres on identifying underexplored or historically producing ground where modern techniques and renewed focus may unlock additional value.

As a junior explorer, Javelin’s valuation and market attention are closely tied to exploration updates, drilling campaigns and broader sentiment toward the gold and resources sector.

Over the past six months, the company has experienced notable share price momentum, alongside periods of sharp volatility. Exploration announcements, project acquisitions and updates on drilling activity have driven renewed interest in the stock.

Highlights:

• In particular, progress across its gold assets has attracted speculative buying as share traders respond to the potential for resource expansion
• Javelin may be suitable for share traders who are comfortable with exploration risk and are seeking exposure to potential upside from discovery-driven growth
• At the same time, the stock’s responsiveness to drilling updates and sector sentiment makes it attractive to CFD traders. Short-term price swings around announcements can create opportunities in both directions
• Its share price has risen by 50.54% over the past six months¹⁵

How to trade penny stocks with IG AU

CFDs

1. Open a CFD trading account with IG AU
2. Search for ASX penny stocks on the IG platform
3. Decide whether to go long (buy) or short (sell)
4. Choose your position size
5. Set stop-loss and limit orders
6. Place your trade and monitor it

Share trading

1. Open a share trading account with IG AU
2. Search for ASX penny stocks
3. Choose the shares you want to buy
4. Determine how many shares you want to purchase
5. Place your order
6. Monitor your investment and collect any dividends

FAQs about penny stocks 

Footnotes

1. TradingView, February 2026
2. TradingView, February 2026
3. TradingView, February 2026
4. TradingView, February 2026
5. TradingView, February 2026
6. TradingView, February 2026
7. TradingView, February 2026
8. TradingView, February 2026
9. TradingView, February 2026
10. TradingView, February 2026
11. TradingView, February 2026
12. TradingView, February 2026
13. TradingView, February 2026
14. TradingView, February 2026
15. TradingView, February 2026