Last year, when users of the social media platform gathered together in a subreddit called wallstreetbets, Reddit gained a household name within the investing world. The group inflated the stock of gaming retailer GameStop to create a short squeeze for investors, bringing down a hedge fund and demonstrating the retail investor's newfound might.
Since then, Reddit has been a hub for activist private equity investors. As with the GameStop phenomenon, many popular Reddit stocks are high-risk investments that are not made with a long-term perspective. However, certain popular Reddit investments are fantastic long-term investments.
Reddit stocks have remained popular among investors of all types. While Reddit was not a prominent forum for investor conversations just a few years ago, it has become so in the last two years or so.
1. GameStop (NYSE: GME)
We cannot discuss Reddit stocks without GameStop stocks. It is the mascot of the Reddit era of investing in many ways. The supply and its investors have been subjected to several short squeezes over the previous two years, and the trend does not appear to be lessening. Shares have remained stable even though other meme stocks have given up most of their gains.
The company's flamboyant boss Ryan Cohen organized the latest protest, and he added another 100,000 shares of GameStop stock to his portfolio. Additionally, the corporation has proposed a stock split. This was sufficient to send the "apes" into overdrive, resulting in another favorable momentum period for GME shares.
Regardless, the company's foundations are lacking. Although revenue exceeded $6 billion in 2021, the company reported a full-year loss of $381 million. On the plus side, the corporation ended the year with a cash balance of $1.271 billion in cash and cash equivalents.
In general, GME remains a beleaguered corporation with an undefined turnaround strategy. Nonetheless, it continues to be a top favorite in Reddit communities.
2. Amazon
In any context, it's clear to see why Amazon is a popular stock. It is the world's largest e-commerce corporation, and despite a significant slowdown, it is still expanding and capturing new ground.
Sales grew 9% a year to $137 billion in the fourth quarter of 2021, following a 44 percent surge last year. Sales exceeded the upper range of projections for 4% to 12% for a year-over-year increase.
Amazon achieved headway across its businesses, such as raising the price of Amazon Prime and adding more clients to Amazon Web Services (AWS). However, it also entered a new market with its investment in electric-vehicle producer Rivian Automotive, which increased its fourth-quarter net income.
Its recent announcement of a 20-for-1 stock split piqued investor attention even more than average. Because shares costing more than $3,000 tend to price out many small investors (unless they can purchase fractional shares), this split makes Amazon far more affordable for a broader range of investors, including those who use Reddit.
The stock has risen by thousands of percentage points throughout the years. And it remains a good performer, having increased by 290 percent over the last five years. Year to date, the shares have been steady, and they trade at just 50 times trailing 12-month earnings, a historically low multiple. Amazon is an excellent investment, with many years of growth still ahead.
3. Tesla Inc. (TSLA)
Tesla and its controversial CEO Elon Musk are virtually constant social media trending topics, and March was a banner month for Tesla bulls. Tesla shares have gained over 30% in the last month, partly on a recent filing indicating that Tesla shareholders will vote on another stock split at the company's forthcoming annual meeting. Tesla stocks have more than doubled in value since the company's August 2020 stock split. Because stock splits do not produce inherent value, Tesla bears are understandably skeptical of the company's dramatic increase following the filing. Reddit traders appear to be in favor of the split.
4. Nvidia (NASDAQ: NVDA)
Nvidia has been in the market since much before the advent of the personal computer. It is a technology business known for its graphics cards, cloud computing, and artificial intelligence products.
Nvidia has been at the cutting edge of artificial intelligence technology, enabling consumers to use their fake intelligence products effortlessly. Additionally, Nvidia's technologies have aided game makers in being more efficient in their job.
Investors on Reddit frequently disagree with mainstream Wall Street sentiment. In the case of Nvidia, though, the company is a Wall Street darling and a cash flow monster. Additionally, Nvidia, the market leader in graphics processing units, has joined the ranks of other firms in creating a foothold in the metaverse through their powerful and adaptable GPUs.
The metaverse comprises numerous virtual places that individuals or groups of people have developed. The user can navigate these worlds using avatars, which are digital versions of themselves that the user controls. It is one of the hottest investment issues, with numerous companies putting their brands on the line.
Nvidia's latest graphics chips are on the verge of transforming the computer industry. These chips will power the metaverse and contribute to the revolution of gaming as we know it, making them a firm you cannot afford to overlook.
5. Microsoft (MSFT)
Microsoft became a hero for its opposition to Russia's invasion of Ukraine to a villain facing bribery allegations in a week in March. However, Microsoft's stock has increased by 4% in the last 30 days, and Additionally, it has increased by 27% over the previous 12 months.
Analysts expect the stock to rise about 15% from its present level.
Microsoft's Teams productivity program has proven its critical utility throughout the pandemic. Additionally, the company exposes investors to a global leader in enterprise cloud computing and advanced industries such as virtual reality, gaming, and cybersecurity.
As evidence that the company's plan is succeeding, Microsoft has continued to provide year-over-year growth in earnings and revenue. Additionally, the corporation continues to generate value for its shareholders.
6. Meta Platforms (FB)
The parent corporation of Facebook, Meta Platforms, has made headlines with its $10 billion investment in the metaverse. However, Meta Platforms exemplify the "new normal" for valuing businesses.
Price-to-book ratios do not always apply to businesses with intangible assets such as monthly active users (MAUs).
FB stock has been hit due to concerns about Facebook's ad-centric strategy in light of Apple's (NASDAQ: AAPL) decision to allow iPhone users to be more choosy about how apps such as Facebook track their activity.
Meta Platforms has 300 billion active users and a price-to-earnings ratio 40% lower than Apple.
When combined with a sizable cash reserve and substantial advances into virtual reality via its Oculus headset, FB stock may provide significant value as it resumes its ascent.
7. Nike (NKE)
Nike confounded most analysts' predictions with a solid earnings report. Increasing margins despite increased expenses, supply chain problems, and a Chinese boycott of the company's products is one of the major takeaways for bullish investors.
The fact that a premium brand outperforms expectations in an inflationary market forces experts to reconsider their pricing projections. Numerous analysts believe that NKE stock will challenge its 52-week high within the next 12 months.
Interestingly, NKE stock has been growing in lockstep with Lululemon (NASDAQ: LULU) stock over the last two weeks.
This could imply that Nike is increasing its e-commerce sales, an area in which Lululemon has a clear advantage. Additionally, institutional investors are increasing their holdings in the stock. This is something investors should keep an eye on, as institutional buying has the potential to propel stock prices upward.
8. Tilray Brands Inc. (TLRY)
Tilray, a Canadian legal cannabis manufacturer, concluded a record-breaking merger with Aphria last year, establishing Tilray as the world's largest cannabis company. In February 2021, WallStreetBets traders assisted in catapulting Tilray shares from under $20 to over $60 in a matter of days. While TLRY stock has subsequently traded at around $8 per share, Reddit's interest in Tilray has lately returned with the passage of the Marijuana Opportunity Reinvestment and Expungement Act, or MORE Act, by the United States House of Representatives on April 1. Regrettably, some experts believe the bill will die in the Senate. The stock received another lift on April 6 after the firm reported an unexpected quarterly profit and announced a contract with retail chain Whole Foods Market to sell hemp products developed by subsidiary Manitoba Harvest.
9. Apple Inc. (AAPL)
Over the last decade, Apple has been one of the most dependable and successful blue-chip technology stocks. Apple will continue to suffer uncertainty shortly due to supply chain interruptions and geopolitical tensions in Asia, where the great majority of its suppliers are situated. On the other hand, Apple recorded a 9% year-over-year growth in iPhone revenue, 24% growth in services revenue, 13% growth in additional products revenue, and a stunning $34.6 billion in net income in the most recent quarter, confirming once again its world-class business strategy. Apple may no longer be a high-flying story stock, but it has Reddit traders humming.
10. Starbucks (SBUX)
Starbucks, like Microsoft, is creating headlines, and not all of them are positive. The corporation is in the market for a new CEO, and there is an increasing call for unionization among the company's employees.
These are often sufficient for investors to raise red flags.
Thus far, the company has been able to pass along some of the costs associated with its cost pressures to its loyal client base. However, if the unionization movement grows more organized, it will put downward pressure on the company's margins and profitability.
However, Starbucks has demonstrated that betting against SBUX stock does not pay off.
This could be another such instance.
Following its most recent earnings report, the company received a significant upgrade from JPMorgan Chase (NYSE: JPM), and institutional investors remain bullish on the stock.
11. Micron Technology (MU)
Micron Technology provided an outstanding earnings report by any standard. However, following an initial upward rise when the market started, the MU stock declined.
It is down 18% year to date. Investors who missed the opportunity to purchase the stock before earnings may now have a second shot.
It's tough to find a stock with a better setup for investors seeking growth and value than MU. Almost all valuation metrics indicate that the stock is fundamentally cheap.
Micron anticipates rapid growth in earnings and revenue in the following years.
Analysts believe the company has a 40% upside potential, and with additional upgrades expected in the coming weeks, now may be an excellent time to accumulate shares. Investors may not be able to take advantage of such a bargain for much longer.
12. DiDi Global Inc. (NYSE: DIDI)
By lunchtime, DIDI stock had increased by more than 3.7 percent. While DIDI stock has lost almost 12% in the last five days, we have witnessed significant volatility with DIDI. This is one of the primary reasons investors trade DIDI stock, as the potential for profit is evident with these vast movements. If you're unfamiliar with DiDi Global, it is a Chinese ride-hailing company.
While the corporation conducts most of its business on a domestic level, it also operates in South America. The latest news for DiDi comes ahead of the company's next extraordinary meeting on May 23. This will occur following a shareholder vote to delist the business from the New York Stock Exchange. DIDI went public last year at roughly $14 per share.
The corporation has experienced its share of ups and downs since then. And as a result of this delisting, many investors are attempting to profit from the significant volatility and high volume. While the DIDI stock is incredibly volatile, a plethora of information is coming out that may make it worthwhile to monitor.
13. International Business Machines Corporation
IBM, headquartered in Armonk, New York, operates in the following segments: cloud and cognitive software; global business services; systems; and global financing. Additionally, it develops innovative semiconductors in collaboration with IBM research. It has been mentioned 14 times in WSBs in the last 24 hours.
On February 15, 2022, IBM announced the acquisition of Neudesic, a principal cloud services consultant based in the United States that specializes in the Microsoft Azure platform and multi-cloud services. The acquisition will broaden IBM's offering of hybrid multi-cloud services and further the company's hybrid cloud and artificial intelligence strategies.
IBM's first-quarter revenue climbed 8% year over year to $14.19 billion in the three months ended March 31, 2022. Non-GAAP net income for the corporation climbed 25% year over year to $1.30 billion. Additionally, its non-GAAP EPS came in at $1.40, a 25% rise year over year.
Analysts anticipate that IBM's earnings per share and revenue for 2022 will climb 22.4 percent and 6.2 percent, respectively, to $9.71 and $60.90 billion. It outperformed consensus earnings per share projections in the preceding four quarters. The stock has increased 13.1 percent in the previous six months, closing at $138.25 in the most recent trading session.
IBM's POWR Ratings reflect the company's excellent fundamentals. The stock is now rated a B, which corresponds to a Buy in our proprietary rating system.
Reddit Stocks FAQs
Is it possible for Reddit stocks to generate revenue in 2022?
Finding successful Reddit stock is challenging without the necessary expertise. However, with research and trading education, it is critical to grasp how Reddit stocks function and trade them. With Reddit stocks still volatile, there is a lot to monitor. However, profiting from Reddit stocks in 2022 may be slightly more manageable with this information.
Why is Reddit a factor in the stock market?
At the start of 2021, Reddit established itself as a critical trading indicator for a large number of seasoned and institutional investors worldwide. This was because GameStop, a video game retailer based in the United States, experienced a 700% increase in value during a frenetic few days at the end of January.
Over the last six months, GameStop's stock has increased by about 8,000 percent. The stock became embroiled in a somewhat intricate financial power struggle between a large hedge fund, Melvin Capital, and a group of online investors gathered on Reddit. GameStop became a target of short-selling,' a practice in which professional investors borrow shares of stock to sell and then repurchase them later, allowing them to profit if the stock price falls. In the most straightforward words, short-selling is a gamble on the company's failure, with an infinite risk of loss.
To summarize, Reddit investors identified an opportunity to profit by aggressively buying GameStop stock, sparking an internet frenzy. Everyone from Elon Musk to Wolf of Wall Street's Jordan Belfort got involved in the argument and excitement. A surge in coverage of the now-famous subreddit r/WallStreetBets ensured that the fever lasted well into January.
Is Reddit relevant to everyday investors?
Yes, as evidenced by the GameStop scenario. For instance, certain brokerages banned trading in certain stocks during the frenzy, and the excitement even resulted in the shutdown of entire apps. This was owing to the extreme strain placed on brokerages' and trading applications' infrastructures, many of which saw record quantities of trades and new signups.
Additionally, the GameStop incident resulted in a permanent alteration in the way institutions do analysis. The internet has empowered retail investors, who now outnumber institutions regarding purchasing power and volume. This altered the investing dynamics considerably - you'd assume in favor of the small investor – yet it remains whether retail investor success has eaten into the earnings of Wall Street's big guns.
Conclusion
Retail investors of various shades make up the Reddit community, which are informed, engaged, and activist investors. Therefore, investors looking for companies with momentum would be advised to monitor whatever stocks are trending on Reddit.
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