We recently published a list of the 11 Most Promising Penny Stocks According to Analysts. In this article, we are going to take a look at where Relay Therapeutics, Inc. (NASDAQ:RLAY) stands against other promising penny stocks.

Solus’ Dan Greenhaus, and Invesco’s Brian Levitt together appeared on CNBC’s ‘Closing Bell’ on April 15 to talk about tariffs, market uncertainty, and risk concerns. The discussion started with Dan Greenhaus expressing his belief that many worst-case scenarios are already priced into the market. He acknowledged that he’s cautious but not overly worried. He pointed out recent events, like the exemptions on auto part imports and the 90-day delay on tariff implementation, as evidence that President Trump is listening to advisors and avoiding pushing toward extreme outcomes. Greenhaus attributed these actions to the rebound seen in the stock market. At the same time, he agreed that the administration has been rather inconsistent, in the context of Morgan Stanley’s comment that investors should prepare for more inconsistencies. But he argued that many investors are assuming scenarios closer to the worst rather than the best. He emphasized that while frightening predictions about skyrocketing prices are taking over media right now, these scenarios are unlikely to materialize.

Brian Levitt built on Greenhaus’ optimism while acknowledging the ongoing uncertainty as well. He attributed this uncertainty to the reliance on decisions from the White House rather than traditional policy mechanisms. He compared the current situation to 2018 when markets fell 20% in a quarter before rebounding due to trade pauses and Fed intervention. He cautioned that the current S&P 500 multiples are not at recession levels so there are potential downside risks if uncertainty remains. While Levitt thinks that business investment and consumer confidence metrics show signs of prolonged volatility, Greenhaus further emphasizes that periods of heightened uncertainty often end up presenting long-term investment opportunities. He acknowledged risks such as sudden tariff increases but also encouraged investors to take advantage of these moments when risk premiums rise.

Our Methodology

We sifted through the Finviz stock screener to compile a list of the top penny stocks that were trading below $5 and had the highest analysts’ upside potential (at least 40%). The stocks are ranked in ascending order of their upside potential. We have also added the hedge fund sentiment for each stock, as of Q4 2024, which was sourced from Insider Monkey’s database.

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Note: All data was sourced on April 15.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).Is Relay Therapeutics Inc. (NASDAQ:RLAY) the Most Promising Penny Stock According to Analysts?

A chemist arranging containers of compounds, ready for the commercialization process.

Relay Therapeutics, Inc. (NASDAQ:RLAY)

Share Price as of April 15: $2.57

Number of Hedge Fund Holders: 37

Average Upside Potential as of April 15: 561.48%

Relay Therapeutics, Inc. (NASDAQ:RLAY) is a clinical-stage precision medicines company that transforms the drug discovery process by enhancing small molecule therapeutic discovery in targeted oncology and genetic disease indications. Its lead product candidates include RLY-2608, PI3Ka, and aGal chaperone. RLY-2608 is a candidate for metastatic breast cancer.

On March 27, Barclays reiterated its Overweight rating on the stock and maintained a 12-month stock price target of $17 per share. Interim Phase 1b data for RLY-2608 combined with fulvestrant showed an 11.4-month median progression-free survival (PFS) in second-line patients and a 39% confirmed overall response rate (ORR) in patients with measurable disease. Relay plans to initiate the Phase 3 ReDiscover-2 trial in mid-2025.

Relay ended Q4 with $781.3 million in cash and investments, which is enough to continue the ongoing clinical trials. The company is prioritizing these funds to support the execution of the ReDiscover-2 Phase 3 trial. In 2024, Relay Therapeutics, Inc. (NASDAQ:RLAY) made $10 million in revenue, which was down from $25.5 million year-over-year. This decline was fueled by milestone payments from the Relay’s license agreements. However, the R&D costs were lower than the previous year and reached $319.1 million in 2024.

Overall, RLAY ranks 1st on our list of the most promising penny stocks according to analysts. While we acknowledge the growth potential of RLAY, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than RLAY but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.

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