Reddit Stocks: What meme stocks are trending today? – October 16, 2023

US futures

• Dow Jones Industrial Average is up 0.5%
• S&P 500 is up 0.3%
• Nasdaq 100 is up 0.1%

US futures are pushing higher today as markets brace for a busy week that will be dominated by big corporate earnings, more economic data and rising fears about the conflict in the Middle East.

Federal Reserve’s Patrick Harker speaks later in an otherwise quiet day for the economic calendar. You can find out what to expect over the coming days in the Week Ahead.

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. NVIDIA
2. C3.ai
3. Tesla
4. Rite Aid
5. AMD
6. Lockheed Martin
7. American Strategic Investment
8. Visa
9. Genpact
10. Amazon

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. Pfizer
2. Palantir
3. Tesla
4. Marathon Digital
5. Manchester United
6. Apple
7. Nikola
8. Lucid Group
9. Ambrx Biopharmaceuticals
10. Carnival

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

Let’s have a look at the top stocks to watch today.

Tesla stock: Q3 earnings preview

Tesla shares are down 1.2% at $248 this morning after Piper Sandler cut its target price to $290 from $300.

That comes ahead of the electric vehicle maker’s quarterly results later this week. All eyes are on what the impact of price cuts, as well as the big delivery miss in the third quarter, has had on margins and whether it will need to offer more discounts in order to drive-up demand going forward.

The lower production was put down to factory downtime, but it only managed to clear a small amount of inventory to suggest demand is more muted. Wall Street has become more cautious on its ability to grow earnings, which are set to fall in the third quarter as margins contract.

You can find out everything you need to know, including all the consensus numbers to watch out for and our latest technical analysis on the share price, in our Tesla Q3 Earnings Preview.

Netflix stock: Q3 earnings preview

Netflix shares are trading broadly flat at $355.88 this morning. UBS cut its price target on the stock to $500 from $525 this morning.

The streaming giant is also set to report results this week. This is a big quarter for Netflix as it will be the first true test of its strategy designed to stop households from the around the world from using its service for free by cracking down on password sharing and introducing new paid sharing options and its cheaper ad-supported tier.

Netflix has said revenue growth will accelerate in the second half as its crackdown forces more users to pay-up for its services, and analysts believe subscriber additions will speed-up too. The ad-supported tier may take more time to really make an impact and could be more of a slow-burner.

The risk this season is that markets are expecting too much too quickly from the new strategy, especially on ads. The push into advertising has got markets excited but Netflix has repeatedly said it will take time for the business to build, potentially years. The password crackdown will now be the primary driver of growth over the coming quarters, although average revenue per member – which will be more closely-watched going forward – could struggle to improve in the short-term. That suggests there is room for disappointment if Netflix’s new plan doesn’t pay-off as quickly as investors hope, and that Netflix may have to over-deliver in order to really impress.

You can find all the consensus numbers and our technical analysis in our Netflix Q3 Earnings Preview.

Lockheed Martin stock: Q3 earnings preview

Lockheed Martin shares has rallied with other defence stocks since the conflict in the Middle East erupted and shares are up 0.7% and at six-week highs this morning.

The recent rally, which has allowed Lockheed shares to recover from one-year lows, will be tested when the company reports results this week. Investors are expecting the conflict and rising geopolitical tensions to push-up demand but this will not have any immediate impact on its results.

Lockheed Martin is expected to report mild 1.1% year-on-year rise in revenue to $16.76 billion and net earnings per share are forecast to fall 2.9% to $6.67.

Keep an eye on other defence stocks like RTX Corp and Northrop Grumman, which are up 0.6% and 0.9%, respectively.

US to close loopholes on chip exports to China

US semiconductor stocks are trading lower today, with NVIDIA down 1.2% and AMD down 0.3%, as markets brace for the US government to introduce new rules to tighten export curbs designed to stop advanced US-designed chips making their way to China.

US chipmakers have been banned from selling their most-advanced chips needed for applications like AI to Chinese companies for a year, but both suppliers and buyers have found loopholes. Chipmakers have tweaked their advanced chips so they don’t fall foul of the restrictions and keep being sold in China, while buyers have also been purchasing chips through overseas subsidiaries.

The new rules, according to exclusive reports from Reuters, will block some AI chips that fall just under technical parameters and demand companies report shipments of other chips, said unnamed sources. So far, we have seen little impact from the export ban but tighter rules are raising the threat that chipmakers could lose access to a huge market.

Pfizer cuts Covid-19 product sales target

Pfizer shares are down 1.3% and at their lowest level in over three years after it lowered its annual sales target for its Covid-19 products, namely its vaccine developed with BioNTech and treatment named Paxlovid, by $9 billion.

The pharmaceutical giant said vaccine sales will be about $2 billion less than previously forecast, whilst Paxlovid sales will be $7 billion less. That is also forcing it to book about $5.5 billion in inventory write-offs. That is prompting a more cautious view on Covid-19 product sales over the coming years.

The news is also hitting other Covid-19 stocks, with rival vaccine maker Moderna down 3.3% and also at their lowest level since 2020.

Novavax hit by Covid-19 vaccine delays

Novavax is down 2.8% after the Financial Times reported that the European Medicines Agency has delayed its decision on the company’s updated Covid-19 vaccine and asked for more information. That has come as a surprise as a decision was expected by the end of last week, the report said.

Apple iPhone 15 sales in China fall

Apple shares are down 0.8% after a report suggested sales of the Apple iPhone 15 in China are down about 4.5% over their first 17 days of release compared to the year before, according to research from Counterpoint Research and published by Bloomberg.

That came as Jefferies said it believes sales could be down at an even sharper double-digit percentage because of the success of Chinese rival Huawei’s new Mate 60 Pro. The Bloomberg report suggested this could be the worst debut of the iPhone in China since around 2018.

Manchester United stock sinks as buyout hopes fade

Manchester United shares are down over 10% today and at their lowest level in almost a year as the latest reports dented hopes that the football club could be taken over.

The club has been wrangled in takeover speculation for 11 months but no breakthrough has happened. The latest reports suggest British billionaire Jim Ratcliffe is looking to buy a 25% stake in the club after Qatar’s Sheikh Jassim bin Hamad al Thani withdrew. Ratcliffe is reported to be paying $1.5 billion for the stake. If accepted, that would give Manchester United a valuation of around $6.0 to $6.5 billion excluding debt.

Ultimately, investors are disappointed as hopes of a big injection of cash from Qatar are fading.

Lululemon rises as it heads for S&P 500

Lululemon shares are up 5.5% and at five-week highs after the S&P Dow Jones Indices confirmed the athleisure giant will fill the gap in the S&P 500 left by Activision Blizzard now that the gaming firm has been bought by Microsoft.

Lululemon will join on October 18.

Rite Aid files for bankruptcy

Rite Aid is down 5.8% before the bell after filing for Chapter 11 bankruptcy over the weekend and appointed a new chief executive to try to salvage the business.

Jeffrey Stein, which Rite Aid said has expertise in “supporting companies that are driving meaningful business transformations and undergoing financial restructurings”, has taken charge as CEO and chief restructuring officer with immediate effect.

The financial restructuring, underpinned by a commitment for $3.45 billion in new financing from some of its existing lenders, is designed to alleviate its debt burden and provide the cash it needs to try to turn things around. It said it will continue to close underperforming stores in an effort to reduce rent and said it has agreed to sell its Elixir Solutions business, which has been excluded from its bankruptcy proceedings.

Importantly, analysts also said that filing for bankruptcy would halt lawsuits regarding allegations of how the drug store was involved in the US opioid crisis.

NYC stock: Can it break above 200-day moving average

American Strategic Investment (NYC) shares are flat. The company, which owns commercial real estate across New York, popped in late September after Bellevue Capital Partners launched a tender offer for up to 350,000 NYC shares at $10.25 per share, effectively setting a new valuation.

The stock has climbed from less than $7 before the offer was launched to $9 today. Notably, the stock has tried and failed to break through the 200-day moving average, currently at $9.36, in three of the last six sessions, preventing it from moving closer to the tender offer price.

NYC said last week that it has no recommendation and is neutral regarding the tender offer. The company will release quarterly results on November 9.

Bitcoin jumps and cryptocurrency stocks follow

Bitcoin is up over 2% today at $27,750 and is providing support to cryptocurrency stocks like Marathon Digital and Riot Platforms, which are both up around 4% this morning.

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