3 potentially explosive penny stocks to consider buying for 2026

Edward Sheldon has scanned the market for penny stocks with significant investment potential as we start 2026. Here are three that have caught his eye.

| More on:

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Penny stocks are high-risk investments. But they can be worth including in an ISA or SIPP as they can generate explosive gains at times.

Looking for penny stocks to buy for 2026? Here are three shares that have caught my eye recently and could be worth considering.

Skillcast

First up, we have Skillcast (LSE: SKL). It’s a software company that specialises in compliance solutions and counts the likes of Tesco, Barclays, and Schroders as customers.

There’s a lot to like about this stock as we kick off 2026. For a start, recent results have been strong.

In September, for example, the company reported 18% revenue growth for the first half of 2025. Subscription revenue for the period was up 23%.

Second, profits are rising rapidly. This year, analysts expect net profit to rise about 40%.

Third, the share price is in a strong uptrend. Note that as I write this, it’s near all-time highs meaning that there are going to be no disgruntled long-term holders waiting to break even and sell shares.

I’ll point out that artificial intelligence is possibly a risk here. This technology could help customers develop their own compliance solutions.

All things considered, however, I see a lot of potential.

Made Tech

Another penny stock in the technology space I like the look of right now is Made Tech (LSE: MTEC). This company helps the UK government and regulated industries with digital transformation.

It has also released some good trading updates recently. In December, it told investors that trading for FY26 (the financial year ending 31 May 2026) would be significantly ahead of expectations.

Note that like Skillcast, the company is seeing good results in terms of profitability. This financial year, analysts expect net profit to soar 85%.

A key risk is a cut in tech spending by the UK government. This scenario is a possibility and could lead to less growth for the company.

I think the stock is worth a look though. Note that the company’s valuation is quite low at present.

Ilika

The third stock I want to highlight, Ilika (LSE: IKA), is far more speculative than the first two. Because it doesn’t have any profits.

It could be worthy of further research though. That’s because the company specialises in solid state battery technology – a huge growth market – and it’s aiming to produce batteries for some high-growth markets including miniature medical implants, industrial wireless sensors, and electric vehicles (EVs) in the years ahead.

One thing that interests me is the fact that Ilika says it has very little competition in the miniature battery sector for active implantable medical devices. This could be a big opportunity for the company.

Now, this is the kind of penny stock that could either soar or crash in 2026. For example, if the company signs some major deals for its battery technology, it could do really well. But if it has to raise a ton of money to stay afloat, its share price could sink.

So, it’s not going to be suitable for those who are averse to risk. If an investor has a high risk tolerance, however, I reckon it’s worth a closer look.

Edward Sheldon has no positions in any shares mentioned. The Motley Fool UK has recommended Barclays, Tesco, and Schroders Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Snowing on Jubilee Gardens in London at dusk
Investing Articles

By January 2027, £1,000 invested in Diageo shares could be worth…

How much might a stake in Diageo shares be worth by next January? Here's what the analysts expect for the…

Read more »

Portrait of elderly man wearing white denim shirt and glasses looking up with hand on chin. Thoughtful senior entrepreneur, studio shot against grey background.
US Stock

Why Nvidia stock might not be the best AI share to buy for 2026

Jon Smith points out some key reasons why Nvidia stock might struggle to outpace rivals this year, while stressing that…

Read more »

Golden hand holding Number 2 foil balloon.
Growth Shares

2 FTSE shares that could keep riding this commodities boom

Jon Smith runs through some FTSE shares linked to the precious metals mining space that are soaring due to rising…

Read more »

British flag, Big Ben, Houses of Parliament and British flag composition
Investing Articles

After strong earnings, is Diploma still one of the UK’s top growth stocks?

Investors trying to find quality growth stocks don’t have to look beyond the FTSE 100. But is that where the…

Read more »

Rear view image depicting a senior man in his 70s sitting on a bench leading down to the iconic Seven Sisters cliffs on the coastline of East Sussex, UK. The man is wearing casual clothing - blue denim jeans, a red checked shirt, navy blue gilet. The man is having a rest from hiking and his hiking pole is leaning up against the bench.
Investing Articles

Why a £250K ISA won’t replace your salary – but could still transform your retirement

What could a £250,000 ISA really do for you? It won’t retire you overnight, but it could reshape your income,…

Read more »

Storytelling image of a multiethnic senior couple in love - Elderly married couple dating outdoors, love emotions and feelings
Investing Articles

Here’s how you could build a £23,455 second income with just £100 a month!

Drip-feeding money into growth and dividend shares can eventually deliver a stunning second income in retirement. Royston Wild explains how.

Read more »

Investing Articles

The BIGGEST holding in my stocks and shares ISA in 2026 is…

Zaven Boyrazian reveals the largest holding in his Stocks and Shares ISA that’s already surged by almost 2,700% since he…

Read more »

Portrait of elderly man wearing white denim shirt and glasses looking up with hand on chin. Thoughtful senior entrepreneur, studio shot against grey background.
Investing Articles

I’d back these FTSE stocks will deliver double-digit growth in 2026

The FTSE 100 has reached all-time highs above 10,000, but that doesn't mean there aren't once-in-a-decade bargains to pick up…

Read more »