WallStreetBets posters are buzzing about these eight Reddit stocks.
Social media platform Reddit has become an unlikely stock trading hub in 2021. Groups of online traders have successfully orchestrated targeted buying campaigns in some of the most shorted stocks in the market, triggering massive short squeezes. Congress even held a hearing earlier this year to better understand the Reddit trading phenomenon. So-called "meme" stocks have been some of the top-performing stocks in the market this year, but the volatility and unpredictability associated with many of these stocks is not for the faint of heart. Here are eight Reddit stocks generating the most buzz in Reddit's WallStreetBets community in November, according to Swaggy Stocks.
Nvidia Corp. (ticker: NVDA)
Shares of chipmaker Nvidia are up 43.6% since the beginning of October and have doubled year-to-date in 2021. Reddit doesn't always see eye-to-eye with Wall Street, but analysts from Bank of America and Wells Fargo have recently touted Nvidia as one of the major beneficiaries of Facebook's rebranding as Meta Platforms Inc. (FB) and its planned investments in building the metaverse. Reddit traders are also likely eyeing two potential November catalysts. Nvidia announced its own Omniverse Enterprise platform at the GPU Conference on Nov. 9, and Nvidia is reporting third-quarter earnings on Nov. 17.
Tesla Inc. (TSLA)
Electric vehicle maker Tesla and its controversial CEO Elon Musk have been trending on Reddit all year, and October was a spectacular month for Tesla bulls. Tesla shares are up 58% since the beginning of October, driven largely by news that rental car giant Hertz Global Holdings Inc. (HTZ) is buying 100,000 Tesla Model 3s for its global fleet. The Hertz news sent Tesla shares soaring to new all-time highs above $1,200. However, Tesla bears are understandably questioning why a $4.2 billion deal with Hertz added more than $400 billion to Tesla's market cap in a month.
Peloton Interactive Inc. (PTON)
A difficult year for Peloton got even worse on Nov. 4 when the fitness company reported a larger loss than analysts were expecting and cut its full-year guidance. Revenue growth in the fiscal first quarter slowed to just 6%, down from 54% in the fourth quarter and 140% in the third quarter. The disappointing earnings report comes after Peloton was forced to issue a safety recall of its Tread and Tread+ treadmills in May. In August, Peloton also cut prices on its original Bike by 20%. Some Reddit traders may see the post-earnings Peloton sell-off as a buying opportunity.
Advanced Micro Devices Inc. (AMD)
Like Nvidia, chipmaker Advanced Micro Devices is exposed to some of the largest and fastest-growing tech fields, including PC gaming, data centers and autonomous vehicles. The company's booming sales growth has generated an incredible 2,000% return for investors over the past five years. In the middle of a global semiconductor shortage, AMD recently reported impressive 53.9% revenue growth in the third quarter. Reddit investors seem to be betting AMD's share gains from Intel Corp. (INTC) in the x86 chip market are sustainable in the long-term, and they are undeterred by AMD's lofty 11.2 price-to-sales ratio.
Cassava Sciences Inc. (SAVA)
Cassava Sciences is a biotech stock developing potential Alzheimer's disease treatment simufilam. Cassava has reported encouraging data on simufilam, but short sellers have questioned the integrity of that data. The stock gained 47.6% on Nov. 4 after the Journal of Neuroscience said it found no evidence of data manipulation in a 2012 paper that Cassava says was "foundational" to simufilam. Reddit traders love a good story stock, especially if it involves burning short sellers. Ortex Analytics recently named Cassava one of its top short squeeze candidates, and its recent trading action suggests the squeeze may have already begun.
DraftKings Inc. (DKNG)
DraftKings has one of the most popular online sports betting and daily fantasy sports apps in the U.S. Despite booming U.S. online and mobile sports betting markets, DraftKings shares are down 20% in the past six months. A big part of that recent underperformance is stiff competition from MGM Resorts International (MGM) and other online gambling apps. In its third-quarter earnings report, MGM said it now holds 26% share of the U.S. sports betting and online gambling market, suggesting it has gained significant share from DraftKings. However, Reddit traders appear to be placing their bets on a DraftKings comeback.
GameStop Corp. (GME)
GameStop has been the poster child of the WallStreetBets short squeeze trade, but its underlying business is still struggling. GameStop's revenue peaked back in 2012 and was steadily drifting lower even before 2020 shutdowns hit. In 2019, GameStop reported a $673 million net loss. In the most recent quarter, GameStop reported a $61.6 million net loss, and revenue was still down 7.8% from 2019 levels. Former Amazon executive Jenna Owens also recently resigned from her position as GameStop's chief operating officer after just seven months on the job. Reddit traders don't seem to care. They like the stock.
Cloudflare Inc. (NET)
Cloudflare provides cloud-based services to secure websites. The stock has been on a major run in the past month, gaining more than 73% and Reddit traders have been along for the ride. On Nov. 4, Cloudflare reported another quarter of impressive numbers, including 51% revenue growth. The company also reported its first ever quarter of profitability on a non-generally accepted accounting principles (non-GAAP) basis. There are plenty of things for investors to love about Cloudflare, but its stock's valuation isn't one of them. After the recent gains, Cloudflare shares now trade at a very steep price-to-sales ratio of 111.9.
Here are the eight Reddit stocks on watch for November:
-- Nvidia Corp. (NVDA)
-- Tesla Inc. (TSLA)
-- Peloton Interactive Inc. (PTON)
-- Advanced Micro Devices Inc. (AMD)
-- Cassava Sciences Inc. (SAVA)
-- DraftKings Inc. (DKNG)
-- GameStop Corp. (GME)
-- Cloudfare Inc. (NET)