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 non-energy minerals, health technology, commercial services and process industries
• 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 Prescient Therapeutics, EDU Holdings and Predictive Discovery are available to CFD trade with us.

All figures are accurate as of 15 May 2026.

1. Atomic Eagle Limited (ASX: AEU)

Sector: Non-energy minerals

Market cap: A$160.61 million

Share price: A$0.400

Atomic Eagle is a junior exploration company focused on uncovering high-value mineral deposits, primarily within the gold and critical minerals sectors. It typically operates in mining-friendly jurisdictions like Western Australia, where it seeks to identify and develop projects that have been overlooked or under-explored by larger industry players.

Its business model revolves around the high-risk, high-reward cycle of drill-and-discover, where a single successful exploration campaign can fundamentally revalue the business.

Over the past six months, Atomic Eagle has focused on refining its geological targets through advanced geophysical surveys and soil sampling. It recently announced the commencement of a fresh diamond drilling programme at its flagship project to test deeper extensions of known mineralised zones.

Early visual observations from these cores have been encouraging for the geological team, prompting the business to secure additional land holdings in the surrounding area to bolster its exploration footprint.

Suitability:

• Share traders: Potentially suitable for long-term share traders who have a high tolerance for risk and a speculative portion of a portfolio. These investors are usually counting on the long-term success of a discovery
• CFD traders: Highly suitable due to the extreme volatility inherent in exploration results. A CFD trader can use leverage to speculate on sharp price movements following assay results or drilling updates without needing to own the underlying physical shares

Risk factors:

• Exploration is inherently uncertain; there is a significant risk that drilling will not yield commercially viable mineral deposits
• As a junior explorer, the company relies on periodic capital raisings, which can dilute the value of existing holdings.

2. Prescient Therapeutics Limited (ASX: PTX)

Sector: Health technology

Market cap: A$72.55 million

Share price: A$0.065

Prescient Therapeutics is a clinical-stage oncology company developing a new generation of personalised cancer treatments. Its primary focus is on CAR-T and targeted therapies designed to treat various cancers that are resistant to traditional medicine. Its OmniCAR platform is particularly notable as it aims to give clinicians greater control over cell therapies, potentially making treatments safer and more effective for patients.

The last six months have been pivotal as Prescient advanced its clinical trials for various blood cancers. It reported positive safety data from its latest patient cohorts, which allowed it to move into higher-dosing phases of its studies. Furthermore, it has been active in the global biotech community, presenting its findings at international conferences and expanding its intellectual property portfolio through new patent filings in major markets.

Suitability:

• Share traders: Suitable for those interested in the healthcare sector who understand that drug development is a multi-year process with long periods of waiting between data readouts
• CFD traders: Biotech shares are notorious for gap ups or gap downs – large price jumps that happen overnight when trial results are released. So, it can be highly suitable for those seeking volatility.

Risk factors:

• The biotech sector faces immense regulatory hurdles. If clinical trials fail to meet their primary endpoints or if the Australian Therapeutic Goods Administration (TGA) or US FDA raises safety concerns, the share price can experience a rapid and severe decline

3. EDU Holdings Limited (ASX: EDU)

Sector: Commercial services

Market cap: A$106.14 million

Share price: A$0.870

EDU Holdings operates in the education sector, specifically focusing on tertiary and vocational training. It owns and manages several private education providers that cater to both domestic and international students. Its revenue is largely driven by student enrolments and the delivery of accredited courses ranging from business and health to creative industries. It aims to capitalise on the demand for skilled workers in the Australian economy.

In the previous half-year, EDU Holdings has navigated a shifting landscape for international student visas in Australia. Despite broader regulatory changes, it has seen resilient enrolment numbers in its core vocational health programmes.

Management has also been focused on a digital-first expansion, investing in online learning infrastructure to reach students who cannot attend physical campuses, which has helped diversify its income streams.

Suitability:

• Share traders: Generally more suitable for share traders. EDU Holdings operates a more traditional service-based business model compared to a miner or biotech. It offers a more stable outlook based on enrolment cycles and dividend potential.
• CFD traders: Less suitable, though still viable for those looking to trade around half-year earnings reports or major government policy announcements regarding the education sector

Risk factors:

• The business is highly sensitive to government policy changes regarding student visas and education funding. A crackdown on international student numbers or a reduction in vocational training subsidies could directly impact its bottom line

4. Laserbond Limited (ASX: LBL)

Sector: Process industries

Market cap: A$64.03 million

Share price: A$0.540

Laserbond is an industrial technology company specialising in surface engineering. It uses high-tech laser cladding and thermal spraying to coat machinery parts with ultra-hard materials, making them last much longer in harsh environments like mining and heavy manufacturing. It also manufactures the specialised equipment used for these processes, selling its proprietary technology to international clients.

Recent months have seen Laserbond expanding its physical footprint, with a focus on increasing its capacity in Western Australia to better serve the resources sector. It has secured several new long-term maintenance contracts with major mining houses, providing a steady stream of recurring revenue.

Suitability:

• Share traders: Suitable for those seeking industrial growth. It represents a picks-and-shovels play on the mining industry without the direct risk of digging for minerals
• CFD traders: Suitable during periods of high market activity. Because its performance is tied to the broader mining cycle, the stock can experience volatile swings when commodity prices fluctuate

Risk factors:

• As an industrial service provider, Laserbond is susceptible to rising costs of raw materials and energy. A significant downturn in the Australian mining or manufacturing sectors would also lead to reduced demand for its refurbishment services

5. Predictive Discovery Limited (ASX: PDI)

Sector: Non-energy minerals

Market cap: A$4.92 billion

Share price: A$0.930

Predictive Discovery is a gold exploration company with its sights set on West Africa. Its primary asset is the Bankan Gold Project in Guinea, which has already shown signs of being a Tier-1 resource.

Unlike an early-stage explorer, Predictive has already defined a massive gold resource and is now working through the technical and environmental studies required to turn the site into an operating mine.

The past six months have been dominated by the progress of the Definitive Feasibility Study (DFS) for the Bankan project. It has consistently released updates regarding its environmental and social impact assessments, which are crucial for securing a mining licence.

Suitability:

• Share traders: Suitable for investors who wants exposure to gold and the specific growth phase where an explorer transitions into a developer
• CFD traders: Highly suitable. News regarding mining permits or major resource upgrades often leads to high-volume trading and significant price action, which a CFD trader can capitalise on

Risk factors:

• Operating in West Africa carries sovereign and jurisdictional risks, including potential changes to mining laws or political instability.
• The transition from explorer to miner requires massive amounts of capital, which often involves taking on debt or issuing more shares.

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, May 2026
2. TradingView, May 2026
3. TradingView, May 2026
4. TradingView, May 2026
5. TradingView, May 2026