Reddit Stocks: What meme stocks are trending today? – November 1, 2023

US futures

• Dow Jones Industrial Average is up 0.1%
• S&P 500 is up 0.2%
• Nasdaq 100 is up 0.2%

US futures are climbing higher this morning. The Federal Reserve makes its next decision on what to do with interest rates later today, with markets anticipating the central bank will leave them unchanged and focusing on the future path to see just how long rates will be elevated, and whether any more hikes are on the horizon. We have the ISM manufacturing PMI and JOLTS job openings out this morning before the main event. Meanwhile, earnings season continues at pace today as results continue to flood in.

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. AMD
2. NVIDIA
3. Tesla
4. C3.ai
5. Apple
6. Visa
7. PayPal
8. Paycom Software
9. Eni
10. Arista Networks

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. AMD
2. Wayfair
3. Ford
4. Tesla
5. TG Therapeutics
6. SoFi
7. Nikola
8. SunPower
9. Palantir
10. Norwegian Cruise Lines

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.

AMD: Can AI tailwinds counter softer demand?

AMD is up 0.2% at $98.67 after the chipmaker said it will sell over $2 billion worth of its most advanced chip used for AI in 2024, helping diffuse concerns that its core business supplying chips for electronics remains soft.

The company said its expecting to sell $400 million worth of its most advanced chip, the MI300, in the fourth quarter and that annual sales will exceed $2 billion in 2024. AMD, which is readying to launch a new MI300X chip, is hoping to steal a slice of the AI pie that is currently owned mostly by NVIDIA. KeyBanc said it is expecting it to be launched in December and described it as the next catalyst for the stock.

Revenue rose 4% in the third quarter to $5.8 billion and came in ahead of the $5.7 billion estimate, while adjusted EPS of $0.70 was also better than the $0.68 forecast. However, its outlook for the fourth quarter was disappointing. It is targeting revenue of around $6.1 billion and a margin of 51.5%, short of the $6.37 billion and 52.1% anticipated by analysts.

Brokers blamed the weak outlook for the fall in premarket trade but welcomed news that AI tailwinds are starting to feed through. Several brokers lowered their target price on the stock this morning, including JPMorgan to $115. Jefferies and TD Cowen cut their views to $130. Some with less buoyant views raised their targets, with Bernstein lifting its view to $100.

Other chipmakers are on the move in wake of the update, with NVIDIA up 0.3% and Intel down 0.3%.

Paycom Software stock hits 5-year lows

Paycom Software is stirring discussion among retail traders and down over 39% today at $148.20, hitting its lowest level since February 2019, after the payment software firm failed to impress with its outlook, leading brokers to cut their view.

Paycom delivered a mixed set of results in the third quarter with a miss at the topline and a beat at the bottom, but both its revenue and adjusted Ebitda targets for the fourth quarter fell short of forecasts. It is targeting $420 million to $425 million in revenue and $169 million to $174 million of earnings, below the $452 million and $189 million pencilled-in by Wall Street.

Piper Sandler slashed its target to $185 from $399 and said there is a “shadow on near-term growth”. TD Cowen downgraded it to Market Perform on the “magnitude of downside surprise” as it lowered its view to $202 from $331. KeyBanc downgraded the stock to Sector Weight. Stifel cut its rating to Hold and slashed its target to $160 from $400 but said it believes the outlook could be conservative and that “much of the bad news is priced in”.

Heinz delivers beat and raise

Kraft Heinz is down 1.5% after the food giant beat expectations in the third quarter and lifted its outlook.

The company delivered adjusted EPS of $0.72 in the latest quarter to beat the $0.66 forecast. However, revenue growth of 1% was slower than anticipated, with higher prices countering falling volumes. It said it is now expecting annual adjusted EPS of $2.91 to $2.99, up from its previous range of $2.83 to $2.91 and impressing versus the $2.89 pencilled-in by analysts.

Estee Lauder slashes guidance on Asia weakness

Estee Lauder is down over 17% at $107.80, a level last hit in late 2017, after it met expectations in the first quarter but lowered its outlook for the rest of the year as it braces for slower growth in China and wider Asia, while also reflecting the risk that rising geopolitical tensions in the Middle East could disrupt its business.

The beauty products maker said it is now expecting net sales to be down 9% to 11% in the second quarter and said it is expecting sales to either rise 1% or fall by up to 2% over the full year. It lowered its annual EPS goal to $2.17 to $2.42 from its previous range of $3.50 to $3.75. Sales fell slightly more than anticipated in the first quarter but adjusted EPS of $0.11, while down heavily from the year before, was welcome considering analysts had forecast a loss.

Norwegian Cruise hit by Middle East conflict

Norwegian Cruise Line is trading marginally lower this morning after lowering its outlook as conflict in the Middle East and wildfires in Maui disrupts operations and forces it to cancel or reroute trips.

The cruise line operator said it is now aiming for annual adjusted EPS of $0.73, down from its previous goal of $0.80. That came as it reported record third quarter sales of $2.5 billion and adjusted EPS of $0.76, which was ahead of its $0.70 target.

“Looking ahead, while we are prudently moderating short term expectations and keeping a close eye on rapidly evolving global macroeconomic and geopolitical events, we remain encouraged by our strong forward booked position and robust pricing and are focused on sustaining this momentum as we close out 2023,” said Norwegian Cruise Line.

Rivals Carnival and Royal Caribbean Cruises are both trading marginally lower in premarket trade

SunPower hits 3-and-a-half year low

SunPower shares are down almost 12% this morning and set to open at their lowest level since April 2020 after becoming the latest solar stock to temper its full year outlook and disappoint the markets.

The company said revenue declined 9.3% in the latest quarter to $432 million and this was short of the $453.2 million forecast by analysts. It turned to a loss of $0.18 per share from a $0.72 profit the year before and came in shy of estimates. SunPower said it is now expecting adjusted Ebitda to come in between a profit of $25 million and a $35 million loss, having previously targeted $55 million to $75 million of earnings.

Wayfair’s improvement fails to impress

Wayfair is down 1.9% after revealing that it continued to lose customers in the third quarter, taking the shine off an improvement in its results.

The furniture retailer said it delivered adjusted Ebitda of $100 million in the period, turning from a $124 million loss the year before. It remained in the red at the bottom-line but its adjusted loss per share narrowed to $0.13 from $2.11, coming in smaller than the $0.44 loss pencilled-in by Wall Street. However, the number of active customers declined 4.3% to 22 million.

“Wayfair is now in a place where we can drive profitability while simultaneously investing for growth,” said CEO Niraj Shah.

PayPal stock: Q3 earnings preview

PayPal shares are down 0.1% ahead of third quarter earnings out after markets close today. US consumer spending remains resilient and PayPalshould be the latest payments firm to deliver solid results, albeit plagued by the uncertain economic outlook.

Total payment volumes are seen rising 14% from last year thanks to the resiliency of consumers determined to keep shopping. Net revenue is forecast to rise 7.9% to $7.38 billion and adjusted EPS is expected to increase 13.9% to $1.23, at the top-end of its guidance range as growth and cost-cutting help margins improve sequentially.

User numbers may stay stable, but the focus is on engagement and encouraging existing users to utilise its services more often. New CEO Alex Chriss has a chance to install confidence, although it may be too early for any major changes considering he has only been in the job for just over a month.

Arista Networks pops to all-time high!

Arista Networks is up 0.8% at $202 after surging over 14% and hitting new all-time highs yesterday, when markets applauded its beat in the third quarter and rosier than expected outlook.

The stock had lost some heavy ground leading up to the results after major customer Meta warned the outlook for 2024 was uncertain and spooking investors that Arista’s revenue could suffer as a result, but the stock has regained all that ground and more with its bullish outlook.

Wall Street embraced the results. Morgan Stanley upgraded the stock to Overweight and lifted its target price to $220 and flagged it as an AI play. Several brokers lifted their target price, including Goldman Sachs to $223, Needham to $215, UBS to $195 and Barclays to $226.

Apple stock: Q4 earnings preview

Apple shares are up 0.1% this morning as investors brace for fourth quarter results due out after markets close tomorrow.

Eyes will be on how strong initial demand has been for the new iPhone 15, especially in China amid concerns it has fallen out of favour amid the rise in popularity of the new Huawei Mate 60 series and heightened geopolitical tensions between the US and China.

Apple has already warned that revenue will be down for a fourth consecutive quarter in the final three months of its financial year. Sales of its flagship iPhone, which accounts for about half of its revenue, are predicted to rise 2.3% from last year and services growth is accelerating, but that will not be enough to counter the ongoing weakness in demand for iPads, Macs and wearables. Wall Street hopes new products can revive growth in the new financial year, so Apple’s outlook will be closely watched.

You can find out what you need to know in our Apple Q4 Earnings Preview.

Tesla value slumps $130 billion on demand woes

Tesla shares are up 1.6% this morning. The electric vehicle maker has fallen over 17% and seen over $130 billion wiped-off its valuation since it released its last set of quarterly results that showed signs of softening demand despite a series of price cuts have that hammered profitability, followed by a series of warnings from the supply chain suggesting sales could be weakening as we approach 2024.

The stock hit a fresh five-month low yesterday before rebounding, with the stock currently testing a key psychological level of $200.

Several companies including Panasonic and ON Semiconductor have issued updates since Tesla’s results that suggests demand for things like batteries and chips from the automotive market is waning, raising fears that companies like Tesla could struggle to keep their factories busy even after slashing prices.

The deterioration to the industry outlook has also been weighing on smaller electric vehicle stocks. Rivian is up 0.2% after recently hitting four-month lows while Lucid Group is up 0.2% and not far above all-time lows.

WeWork stock slumps on bankruptcy fears

WeWork is down over 43% today after the Wall Street Journal reported the flexible office space provider plans to file for bankruptcy next week, according to unnamed sources. WeWork is currently holding discussions with lenders in an effort to shore-up its balance sheet and is downsizing its portfolio.

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