If investors have learned anything from the first quarter of 2025, it’s that there’s more to making money in the stock market than buying the Magnificent Seven and watching them soar.
In aggregate, those seven mega-cap stocks — Apple Inc. (ticker: AAPL), Microsoft Corp. (MSFT), Amazon.com Inc. (AMZN), Alphabet Inc. (GOOG, GOOGL), Meta Platforms Inc. (META), Nvidia Corp. (NVDA) and Tesla Inc. (TSLA) — are down more than 12% year to date. That’s not to say the Magnificent Seven aren’t a good bet over the long run, it’s only to point out that, in today’s market, smart investors must look for opportunity wherever they can find it.
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One category of stocks that may hold particular promise is cheap stocks trading at under $5. The word “cheap” in equity investing does not necessarily mean poor quality, as it might in a retail context. When it comes to buying stocks, cheap can mean superior value and exceptional growth potential. Lower-priced shares often have more room to grow, and relatively small price moves can produce large percentage gains when you’re starting from a lower price point.
You do, however, have to be careful with low-priced stocks. Small downward moves will have the same dramatic effect on losses as small upward moves will have on gains. Before you buy low-priced companies, do your homework and remember that equity investing works best over long investment horizons.
This list of five cheap stocks currently trading at under $5 is a good place to start. If these companies successfully execute their business plans and the market cooperates, some of them won’t stay under $5 for long.
| Stocks | Market Capitalization* |
| Telefónica SA (TEF) | $26 billion |
| Ribbon Communications Inc. (RBBN) | $710 million |
| Altice USA Inc. (ATUS) | $1.3 billion |
| Brandywine Realty Trust (BDN) | $773 million |
| iQiyi Inc. (IQ) | $2.2 billion |
*As of March 27 close.
Telefónica SA (TEF)
TEF is a leading telecommunications company based in Madrid, Spain. Americans may not be familiar with the company, but it’s one of the largest telecom operators in the world. The stock trades on U.S. markets as an American depositary receipt, or ADR.
CFRA Equity Analyst Adrian Ng became bullish on the company last year after it made some fiscal adjustments that lowered its debt load and exited the Central American market to reinforce its position in Europe and Latin America. Ng has a “buy” rating on the stock and assigned it four out of five stars on CFRA’s star rating system.
TEF is a legacy provider in its service markets. This gives it a clear edge over new companies or established competitors that want to take market share. The company has more than 300 million loyal customers and excellent geographic diversity. Roughly 30% of its revenue comes from its home country, Spain. Another 20% comes from Germany, the UK and Brazil, with the balance being derived from Latin American countries like Argentina, Chile, Colombia and Mexico.
The stock is currently paying an attractive forward dividend yield of 6.9%.
[Read: 7 Up-and-Coming Stocks to Buy in 2025]
Ribbon Communications Inc. (RBBN)
Ribbon Communications is a Texas-based information technology company with a market cap of over $704 million. The stock closed at $5.13 on Feb. 10, but recent market turmoil has taken its toll and it now trades at well under $5.
Ribbon engineers and distributes advanced software that supports the fast-growing digital communications segment of the technology sector. Specifically, it produces session border controllers that manage real-time digital communication over the internet, as well as network transformation products such as media gateways and application servers. Its customers are mostly large mobile network operators like Verizon Communications Inc. (VZ) and AT&T Inc. (T) and cable operators like Comcast Corp. (CMCSA).
In April, Ribbon announced a major partnership with Verizon. Verizon is retiring its legacy wireless system and Ribbon was hired to replace the company’s time-division multiplexing switching platform with a modern cloud-based system.
As Ribbon’s deal with Verizon gains visibility with investors, the exposure could, over time, push the stock back up over $5 and higher from there.
Altice USA Inc. (ATUS)
In December, both Citigroup and TD Cowen reiterated the “buy” ratings they maintained on Altice USA. Altice is an aggressive play, but this low-priced stock has much potential. Risk-tolerant investors will find this name intriguing.
ATUS is an American media and telecommunications company that provides broadband, video and mobile communications services under the brand name Optimum. The company has a market cap of $1.3 billion.
ATUS offers broadband internet via both coaxial and fiber optic platforms. It boasts speeds of up to 8 gigabytes per second in some service areas. It also supplies cable TV services, video on demand and over-the-top integration through its Optimum TV network. This is in addition to its voice-over-IP telephony service and a mobile virtual network operations. The company derives significant revenue from advertising, media and news distribution. It also owns News 12 Network, which broadcasts local news in New York, Connecticut and New Jersey, and I24 News, which broadcasts internationally.
Brandywine Realty Trust (BDN)
Jamie Dimon, the outspoken CEO of JPMorgan Chase & Co (JPM), is leading a return-to-office campaign on Wall Street. If his efforts catch on with other managers in other sectors, it will be good for office space real estate investment trusts, or REITs, like Brandywine.
BDN is a $783 million office REIT with a quality management team that has a smart strategy for navigating the office segment of the real estate sector. Brandywine plans to focus on the three “Ls” of real estate, which everyone knows are location, location and location. It chooses only prime locations and building sites in fast growing areas, and operates class-A properties only.
The company owns more than 125 properties with a total of more than 19 million square feet of rentable office and mixed-use space. Its primary locations are in up-and-coming markets around Philadelphia, Washington, D.C., and Austin, Texas.
The crown jewel in Brandywine’s portfolio is a 14-acre project in Schuylkill Yards in Philadelphia. That property, which is being developed in conjunction with Drexel University, will feature a science center, office towers and luxury apartment buildings.
BDN has a current forward dividend yield of 13.3%.
iQiyi Inc. (IQ)
iQiyi is sometimes called the Netflix Inc. (NFLX) of China. It is, in fact, a $2.3 billion Chinese online entertainment company and video streaming service. IQ provides internet video, online gaming, movies, animation, digital literature (e-books) and much more. The company operates on a subscription-based business model and can boast over 100 million paying subscribers and as many as 500 million casual monthly users.
The stock trades as an ADR on American stock exchanges. Recently, several successful, high-profile content releases and some innovative ventures caught the eye of Wall Street and investors worldwide. IQ is up over 14% year to date, including more than 6% over the past month. The company’s stated commitment to the use of artificial intelligence to lower production costs may be another factor that’s pushing the stock higher.
All modern entertainment companies have embraced technology, but iQiyi, more than most, has integrated cutting-edge technology with in-demand entertainment. It has an in-house production studio that can produce original blockbuster movies and it buys trending content from other producers. IQ is a low-priced stock that may have a lot of room to grow.
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The 5 Best Cheap Stocks Under $5 to Buy originally appeared on usnews.com
Update 03/28/25: This story was previously published at an earlier date and has been updated with new information.
