You know you want it. High-potential penny stocks that is. And I’m here to deliver. However, from an obligatory standpoint, I must warn you from the get-go: people tend to lose money with this extremely risky endeavor. What compounds the matter is the psychological dynamics involved that can lead you to worsen already bad decisions.

Before you try your hand at promising penny stock picks, you should read up on the sunk cost fallacy. It’s the emotionally driven whirlwind effect when people begin to throw good money after bad. They’re hoping that eventually, the underlying speculation will make good. Most times, the flawed enterprise continues to become even more toxic, thus losing market value.

At the same time, if you gamble responsibly, there’s always a possibility – notice I said possibility and not probability – that one of your ideas could be a grand slam. So, if you can control your emotions, below are intriguing high-potential penny stocks to consider.

Aqua Metals (AQMS)

What it is: An entity that could tie into the electric vehicle mania, Aqua Metals (NASDAQ:AQMS) recycles metals from spent lithium batteries through its advanced extraction technology. While it appears one of the high-potential penny stocks, AQMS lost nearly 22% of equity value since the January opener. Also, it carries a market capitalization of only a bit over $97 million.

Relevance: Well, the idea here is that Aqua Metals could ride the EV sector’s coattails. According to MarketsandMarkets, the lithium metal sector will reach a valuation of $2.5 billion this year. Further, experts project that the segment could hit a value of $6.4 billion by 2028, thus representing a compound annual growth rate (CAGR) of 20.4%.

Pros: If Aqua gets just a small piece of this burgeoning pie, it could send AQMS rocketing higher. That may be what H.C. Wainwright’s Amit Dayal may be thinking, who believes AQMS could hit $4. Promising penny stock picks? Indeed!

Cons: Unfortunately, every speculative idea has cons. Glaringly, revenue has been largely eroding since 2019, which is not a good look.

Gevo (GEVO)

What it is: An intriguing prospect among high-potential penny stocks, Gevo (NASDAQ:GEVO) specializes in renewable fuels. By extracting renewable diesel from plant oils and fermentation, Gevo could bolster both national security (in terms of energy independence) and broader sustainability protocols. However, GEVO carries significant risks, losing almost 34% since the start of the year.

Relevance: Fundamentally, Gevo ranks among the promising penny stock picks due to the heightened attention toward energy alternatives. For example, MarketsandMarkets noted that the North American renewable diesel market will reach a valuation of $12.9 billion at year’s end. Further, by 2044, the sector could be worth $49.1 billion, implying a CAGR of 7.1%.

Pros: Enticingly, the market cap for Gevo only sits at less than $291 million. Therefore, getting a modest piece of the pie could lead to significant upside. Analysts see shares hitting $6.07, implying growth potential of nearly 402%.

Cons: While Gevo has a decent balance sheet for being one of the penny stocks, it’s also overvalued relative to trailing-year revenue, carrying a hefty multiple of 22.64x.

LiveOne (LVO)

What it is: A possibly evocative candidate for high-potential penny stocks, LiveOne (NASDAQ:LVO) is a live event streaming and ticketing platform. It focuses on music, esports and digital media. Given the remarkable changes in the entertainment industry, LiveOne could breakthrough with investors for the long haul. Fueling the temptation, LVO gained almost 61% of equity value since the beginning of the year.

Relevance: Frankly, LiveOne will require you to have your finger on the pulse of entertainment, which isn’t my specialty. That said, just the esports segment could be a compelling catalyst for LVO, making it one of the promising penny stock picks. According to Statista, the global esports sector will print revenue of $3.8 billion by year’s end. Further, experts project that the ecosystem could ring up sales of $5.7 billion by 2028.

Pros: If LiveOne fires on all cylinders, analysts believe that shares could hit a consensus price target of $5.50. That implies almost 434% upside potential.

Cons: Financially, the company suffers from many flaws, including the constant issuing of new debt.

Eyenovia (EYEN)

What it is: Founded in 2014, Eyenovia (NASDAQ:EYEN) develops and markets ophthalmic micro-dose delivery technologies for treating eye diseases. From both a scientific and market upside standpoint, EYEN ranks among the high-potential penny stocks. However, shares have been all over the map, leading to a deceptively modest year-to-date return of 3.5%.

Relevance: Fundamentally, Eyenovia will be looking to create a modest niche within the massive ophthalmology industry. According to Data Bridge Market Research, the underlying global sector could expand at a CAGR of 6.4% from 2023 to 2030. At the forecast culmination, the valuation might hit nearly $84.66 billion. Last year, the industry was wroth $51.5 billion. And with Eyenovia only carrying a market cap of $78.3 million, it’s a tempting prospect.

Pros: Fueling the speculative fire, analysts peg EYEN a unanimous strong buy. Further, the average price target lands at $10, projecting 462% upside.

Cons: Since its public market debut, EYEN lost more than 82% of equity value, demonstrating the high risks involved with penny stocks. Also, revenue generation has collapsed, making EYEN a narrative play.

Arqit Quantum (ARQQ)

What it is: Arguably one of the top-tier high-potential penny stocks in terms of sheer excitement, Arqit Quantum (NASDAQ:ARQQ) provides quantum encryption solutions for secure data communications. However, investors must be prepared to exercise an uncommon amount of patience and bravery (if not outright recklessness). Since the January opener, ARQQ fell a staggering 84%.

Relevance: Along with artificial intelligence and machine learning, quantum computing has been all the rage. However, enterprises will need to forward cybersecurity solutions should the quantum paradigm become the norm. For example, Fortune Business Insights believes that the quantum computing market could be worth nearly $6.53 billion by 2030. Still, someone needs to protect this valuable innovation. That’s where Arqit comes in to (hopefully) save the day.

Pros: Representing one of the most promising penny stock picks, H.C. Wainwright’s Scott Buck anticipates shares hitting $3. That implies growth of over 526%, which is also astonishing.

Cons: As with other penny stocks, Arqit suffers from multiple financial red flags. Also, even with the market loss this year, ARQQ trades at an overheated 96.34x trailing-year sales.

Compugen (CGEN)

What it is: One of the most innovative names among high-potential penny stocks, Compugen (NASDAQ:CGEN) is a clinical-stage predictive drug discovery and development firm. Specifically, it designs computational biology tools for facilitating new therapeutics. While it offers substantial scientific intrigue, CGEN is incredibly risky priced at only 78 cents per share. Also, its market cap sits at just over $68 million.

Relevance: As with the other promising penny stock picks, Compugen is about taking a modest bite out of a massive underlying industry. According to Mordor Intelligence, the drug discovery market will reach a valuation of $93.91 billion at the end of this year. Further, experts project that the segment will expand at a CAGR of 6.59% by 2028. At the forecast culmination, the sector should print a valuation of $129.21 billion.

Pros: Although it’s a terribly risky idea, several analysts over the past year have issued a buy rating on shares. Enticingly, the most recent price target stands at $7, implying 802% upside potential.

Cons: As brilliant an idea as CGEN may be on a potential narrative basis, the company lost almost 75% of market value over the trailing five years.

Quantum Computing (QUBT)

What it is: Making a strong case as one of the most exciting ideas among high-potential penny stocks, Quantum Computing (NASDAQ:QUBT) aims to deliver a rich suite of full-stack quantum solutions, per its website. It helps connect its clients to the advancements of the latest computing tech through its cloud-based service network. However, it’s a risky endeavor, with shares slipping 47% since the beginning of the year.

Relevance: As McKinsey & Company pointed out, the sky may be the limit when it comes to quantum computing. Frankly, the industry could change the digital innovation paradigm. For now, experts project that the sector could hit a valuation of $106 billion by 2040. Further, this total valuation is broken down into several compelling subsegments, such as hardware, communications and sensory-based solutions.

Pros: Getting a piece of this market could be huge for QUBT, which is probably why Ascendiant’s Edward Woo is so bullish on shares. The expert anticipates the price hitting $8.75, which implies over 984% upside potential.

Cons: Much of the reason why QUBT has such robust upside potential is because it’s utterly deflated. A literal penny stock, QUBT slipped 74% over the past five years.

Penny Stocks

On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.

Read More: Penny Stocks — How to Profit Without Getting Scammed

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.