Quantum Leaps and Algorithmic Gains: Penny Stocks to Watch in May 2025

Philip CarterMonday, May 26, 2025 9:03 am ET
7min read

The convergence of AI and quantum computing is reshaping industries, and nowhere is this more evident than in the high-risk, high-reward world of penny stocks. In May 2025, three names—MicroAlgo (MLGO), Quantum Computing (QUBT), and Rigetti (RGTI)—are primed to deliver explosive moves fueled by technical breakouts, institutional backing, and game-changing contracts. Let's dissect why these stocks are must-watch plays for aggressive traders.

MicroAlgo (MLGO): The Short Squeeze Timebomb

Why It's Hot:
MLGO's ultra-low float of 797k shares and 51.57% short interest create a textbook short squeeze setup. With borrow fees spiking to 285% APR in early April, short sellers are cornered. The stock's recent $9–$12 range is critical: a breakout above $12 (April highs) could trigger a parabolic rally, while a dip below $9 risks a sharp correction.

Technical Catalysts:

  • Volume Surge: A recent 116M-share spike signals institutional accumulation or panic selling—either way, volatility is guaranteed.

Risk: The stock's 948% YTD gain since 2024's lows is unsustainable without a catalyst.

Quantum Computing (QUBT): NASA's Stamp of Approval

Why It's Hot:
The $406k NASA contract announced in April 2025 is a sector-defining catalyst, validating QUBT's LIDAR data capabilities. Despite a 54% YTD dip from 2023 highs, the stock's March 2025 150% bounce to $11.85 signals institutional confidence.

Technical Catalysts:
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- Institutional Inflow: Vanguard and BlackRock added 1.66M and 309K shares, respectively, in Q1 2025.

Risk: The stock's low float and lack of detailed short interest data require caution.

Rigetti (RGTI): Sector Leader with Institutional Muscle

Why It's Hot:
RGTI's 36.48% institutional ownership (including BlackRock and Vanguard) underscores its status as a quantum computing bellwether. The stock's 948% surge since May 2024 to $11.85 is no fluke—sector momentum is accelerating.

Technical Catalysts:
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- Breakout Potential: A close above $9 could target $15+ territory, mirroring its 2024 rally.

Risk: Insider selling (e.g., Deer X & Co.'s 43% stake reduction) hints at profit-taking risks.

The Playbook for Aggressive Traders

  1. Target the Breakouts:
  2. MLGO: Go long if it closes above $12; set a stop below $9.
  3. QUBT: Accumulate dips below $10.50, aiming for $12+ on NASA news.

  4. RGTI: Buy the $6–$7 support zone, targeting $12 by Q3 2025.

  5. Leverage Sector Momentum:
    The $100B quantum computing market is expanding, and these stocks are the darlings of the space.

  6. Beware the Risks:

  7. Volatility: Ultra-low floats mean swings of 20%+ in a day.
  8. Regulatory Hurdles: QUBT's Nasdaq non-compliance notice (June 2024) remains unresolved.

Final Call: Act Now or Miss the Wave

The May 2025 window is your last chance to board this train. With NASA contracts, institutional inflows, and extreme short squeezures, these stocks could double—or crash—in weeks.

Trade with discipline, but trade fast. The quantum computing revolution isn't waiting.

Disclaimer: Penny stocks are high-risk investments. This analysis is for informational purposes only.

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