Reddit Stocks: What meme stocks are trending today? – July 26, 2023

US futures fall ahead of Fed

• Dow Jones Industrial Average is down 0.1%
• S&P 500 is down 0.1%
• Nasdaq 100 is down 0.3%

Earnings continue to roll-in, but attention is also on the Federal Reserve interest rate decision later today. Markets are convinced that we will see a 25bps rate hike today, but they remain more divided about the path beyond here. Some think it could be the last hike of the current rate cycle, others believe more are to come – and markets will be on the lookout for which way it is leaning.

Most discussed Reddit stocks

Below is a list of the top 10 most mentioned US stocks on the WallStreetBets thread on Reddit over the last 24 hours, according to data from Quiver Quantitative. Exchange-Traded Funds (ETFs) and other instruments have been excluded:

1. Microsoft
2. Snap
3. C3.ai
4. Raytheon
5. DISH Network
6. Alphabet
7. NVIDIA
8. PacWest Bancorp
9. Tesla
10. AMC Entertainment

Most active US stocks before the bell

Below are the most active stocks with a valuation of at least $500 million before the bell, based on trading data taken from Bloomberg:

1. Snap
2. Tilray
3. Nikola
4. PacWest Bancorp
5. Rivian
6. MaxLinear
7. Alphabet
8. DISH Network
9. AT&T
10. Microsoft

US premarket winners and losers

Here are the stocks worth at least $500 million experiencing the sharpest movements in premarket trade, according to data from Bloomberg:

Top US stocks to watch

Microsoft is down 3.6% and Alphabet is up 6.2% as markets digest results released late yesterday. Both Big Tech giants beat expectations in the latest quarter. Alphabet is at a 15-month high after ad sales grew faster than expected and Google Cloud delivered its second consecutive quarterly profit. With growth accelerating faster than anticipated, Alphabet is cementing its position as the stock of choice within the advertising space as markets brace for a rebound this year. Alphabet also boasted about the opportunities stemming from AI, helping turn the conversation to how the breakthrough technology can be a huge opportunity rather than a threat as it fends off competition from Bing and ChatGPT. Microsoft is at a two-week low as the bar was much higher considering the share price was lingering not far below all-time highs ahead of the results, prompting some profit-taking. The ongoing slowdown in demand for cloud computing, especially Azure, is also knocking sentiment as investors are left waiting for any significant boost from AI. Find out what you need to know, including what both companies said about AI and our latest technical analysis, in Microsoft and Alphabet Beat Expectations.

NVIDIA is up 0.4% this morning. Signs that Big Tech giants are ramping-up their investments in AI should reinforce the hype around the chipmaker’s prospects, after Mizuho predicted earlier this week that it could be generating up to $300 billion in revenue from AI by 2027!

Elsewhere, Snap is down 17.7% at $10.28 and at its lowest level in over a month after providing a soft sales outlook for the current quarter as the Snapchat owner remains in the red and burns through cash. The company posted a sales decline of 4% and that marked the second consecutive quarter of lower revenue. Its net loss amounted to $377 million, although this was better than the $397 million loss anticipated by Wall Street. User growth, including premium subscribers to Snapchat+, continue to grow but Snap is still working to improve its advertising platform. Several brokers lowered their price targets this morning, including Credit Suisse to $15 from $16, Bernstein to $11 from $13 and Wells Fargo to $9 from $11. Barclays raised its view to $15 from $11.

All eyes are now turning to Meta, which is up 2.4% ahead of quarterly results out after markets close today. This could be a big quarter for Meta, and one that could be needed to maintain the stellar gains booked in 2023 following the heavy selloff we saw last year. Earnings are forecast to grow for the first time in 18 months as comps are ironed-out and it reaps rewards from its aggressive cost-cutting. Its new Threads platform is taking off as it leverages its Instagram base. Plus, there is a chance Meta could stir up some excitement about its AI prospects amid reports it is preparing to launch a commercial version of its own AI model that can create text, imagery and code. You can find out what you need to know, including consensus figures and our technical analysis, in our Meta Q2 Earnings Preview.

AT&T is up 1.7% before the bell after beating expectations in the latest quarter and launching a new plan to cut another $2 billion of costs out of the business over the next three years. The telecoms firm said it had achieved its $6 billion cost-cutting plan ahead of schedule, which helped it deliver $4.2 billion worth of free cashflow in the second quarter. That was well ahead of the $3.6 billion forecast. Revenue met forecasts and adjusted EPS of $0.63 was just above the $0.60 anticipated by analysts, helping its share price continue to recover after being sunk by reports around lead-clad cables.

Boeing is up 3.7% and on the cusp of testing 18-month highs after surprising the markets by generating almost $2.6 billion of free cashflow in the latest quarter, defying Wall Street that was convinced it would burn through money. That is reinforcing confidence Boeing is back on the right path after years of problems, aided by a further jump in 737 production to 38 planes a month, with hopes of raising that to 50 in 2025/2026. Boeing remained in the red and has been loss-making for two years but its loss of $0.82 was slightly smaller than the $0.84 forecast.

Coca-Cola is up 1.3% and at a two-month high after raising expectations for the reminder of the year as consumers keep buying its beverages despite facing higher prices. Snacks and beverages have proven resilient even during the cost-of-living crisis. Coca-Cola’s products were around 10% higher in the second quarter than the year before and volumes only suffered a mild contraction. Organic sales were up 11% in the quarter, well ahead of the 8.6% increase anticipated by Wall Street and adjusted EPS of $0.78 also beat the $0.72 forecast. It said it now anticipates core EPS to grow 5% to 6% this year, up from its previous goal of 4% to 5%.

Hilton Worldwide is down 0.8% before the bell. Buoyant demand for travel allowed it to beat expectations in the latest quarter and increase its outlook for the rest of 2023. Revenue rose to $2.66 billion from $2.24 billion the year before and came in ahead of the $2.57 billion forecast, driven higher by the price of a room rising by about 12%. Adjusted EPS of $1.63 was also ahead of the $1.58 forecast. We saw a slowdown in the US this quarter but this was more than countered by demand overseas, prompting it to raise its guidance.

Thermo Fisher is down 7% after lowering its annual profit outlook as businesses become more cautious with their spending and its performance in China disappointed in the latest quarter. It said it is expecting annual EPS of $22.28 to $22.72 compared to its previous goal of around $23.70. Revenue and profits both missed the mark in the second quarter.

RTX Corp, formerly Raytheon Technologies, is down 0.3% at $87 this morning. The company lowered its free cashflow target for this year to $4.3 billion from $4.8 billion because of a new issue that will require Pratt & Whitney to recall and inspect thousands of jet engines. That overshadowed the fact sales and earnings both beat expectations in the quarter and its decision to raise its guidance for both metrics. Morgan Stanley downgraded the stock to Equal Weight from Overweight and lowered its target price to $95 from $110.

DISH Network is up 8.2% and at a three-month high after Bloomberg reported it will begin selling its premium wireless service named Boost Infinite, which was launched in June, on Amazon for $25 per month, inspiring hopes it can expand its customer base after years of losses.

PacWest Bancorp is up 27% as markets continue to react to news it will be bought out by smaller rival Banc of California, which is up over 6% and at its highest level since March. The $1.1 billion all-stock deal will see Banc of California issue 0.6569 of a share for every one PacWest share currently owned. That comes in the wake of the banking crisis back in March, with PacWest and others having struggled to recover. The new enlarged entity will use the Banc of California name and create a bank with about $36 billion worth of assets.

AMC Entertainment is down 0.2% today while its APE preferred shares are up 1.7%. Both sets of shares have been volatile this week after its plan to convert APE shares into ordinary stock was prevented by a Delaware judge, causing a headache for arbitrage traders hoping to benefit off the spread between the two sets of shares. AMC has said getting this sorted is ‘critical’ and warned that the ‘risk of financial collapse is not whimsical’. It has refiled its plan with adjustments in the hope of winning court approval.

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