Reddit Stocks: What meme stocks are trending today? – September 5, 2023

US futures

• Dow Jones Industrial Average is flat
• S&P 500 is down 0.2%
• Nasdaq 100 is down 0.4%

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. Tesla
2. NVIDIA
3. C3.ai
4. Apple
5. AMC Entertainment
6. Visa
7. Wayfair
8. Eli Lilly
9. Loews
10. Grupo Televisa

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. Nikola
2. Tesla
3. Better Home & Finance
4. Palantir
5. Apple
6. Uranium Energy
7. Lucid Group
8. Tilray
9. IonQ
10. NVIDIA

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 deliveries in China ramped-up in August

Tesla shares are trading marginally higher before the bell. We discovered yesterday that its Shanghai plant sold 84,159 vehicles in August, according to the latest figures out from the China Passenger Car Association. That was over 9% higher than last year and, more importantly, over 30% higher than what we saw in July. That was significantly ahead of the broader market, but that growth still lagged the likes of Chinese outfit BYD, which saw deliveries jump 57.5% from last year to over 274,000.

Meanwhile, analysts at UBS have predicted that Chinese electric vehicle makers will gradually eat away at Western automaker’s market share over the coming years, warning they could see their slice of the global automotive market contract to just 58% by 2030 from around 81% today. In the same timeframe, Chinese makers – led by BYD – are expected to see their share double to about 33%, UBS said, while Tesla is forecast to see its share rise from 2% today to about 8% by the end of this decade.

VinFast loses over $100 billion in value

VinFast shares are down 11.9% today and on course to lose ground for a sixth consecutive session, with the Vietnamese electric vehicle maker now down almost 70% from the peaks we saw late last month. The company, which is still in the red and aiming to produce just 50,000 vehicles this year, was briefly the world’s third most valuable automaker when its valuation peaked at over $180 billion but it has since crashed back down to reality and today is worth closer to $68 billion.

It is still the sixth most valuable automaker globally at today’s valuation, ahead of powerhouses like BMW, Volkswagen and Ferrari. The company went public through a SPAC last month but only has a tiny free float available, which has made it vulnerable to sharp and volatile movements since listing.

Goldman Sachs: NVIDIA and AI stocks can keep rallying

NVIDIA is down 0.9% this morning, having briefly opened at fresh all-time highs on Friday before pulling back. Goldman Sachs said that the hype around AI is still in its early stages and that the sector is likely to keep outperforming the wider market, stating that there are no signs of a bubble following the stellar rally we have seen in AI stocks in 2023.

Goldman Sachs said valuations in the AI sector are not as stretched as they have been in previous bubbles and that the early winners have “unusually strong balance sheets and returns on investment”.

The broker outlined 11 stocks that it believes will be near-term winners from AI, including NVIDIA, Marvell Technology, Microsoft, Meta and Adobe. That comes in wake of Goldman Sachs publishing a list of companies that it thinks could be big beneficiaries over the long-term but have not yet seen a material boost in value since the technology ripped through Wall Street earlier this year, which included names like Guidewire, Pinterest, MongoDB, Twilio and Snowflake.

Can Arm IPO revive the market?

We discovered this morning that British semiconductor designer Arm is aiming to raise up to $4.87 billion in its upcoming initial public offering, which will see it offer 95.5 million American depository shares priced at between $47 and $51 each.

The Financial Times reported last week that Arm is targeting an overall valuation of up to $55 billion, down from previous estimates that had put it as high as $80 billion. That is also down from the $64 billion valuation earned through a deal struck by Softbank to buy some shares in Arm that it didn’t already own ahead of the listing.

Current owner Softbank, which took the company private back in 2016 for $32 billion, will retain a stake of around 90.6% in Arm after the listing, which is also thought to have drawn demand from some of the biggest tech companies that are looking to act as cornerstone investors in the IPO, including Apple, NVIDIA, AMD, Alphabet, Intel and Samsung, according to media reports.

The IPO is being closely-watched considering there has been a drought of new listings over the past two years, with investors hoping Arm can provide a new catalyst and encourage more contenders – such as Instacart - to take the plunge. However, it will all boil down to valuations and, even with the reduced price tag, some may find Arm aiming too high. You can find out more about what this means for the broader market in Can Arm and Instacart Revive the IPO Market?

Alibaba and others fall on weak Chinese data

Alibaba, Baidu, JD.com and Pinduoduo are down 0.9% to 1.6% this morning. US-listed Chinese stocks have just celebrated their best weekly performance since July but are under pressure today after the latest Caixin Services PMI came in much softer than hoped, with the sector growing at its slowest pace in eight months during August.

Manchester United: Is it still up for sale?

Manchester United shares are down 8.7% in premarket trade after a report said the Glazer family, which has been trying to sell the football club since last year, has decided to pull the club off the market after failing to secure an adequate price tag.

The Mail on Sunday cited unnamed sources with close links to the Glazer family and said it may try to sell it again in 2025 when they hope market conditions will have improved. Qatari Sheikh Jassim Bin Hamad Al Thani and British billionaire Jim Ratcliffe were thought to be leading the race to buy the club.

NextGen Healthcare rises on takeover reports

NextGen Healthcare is trading up 7.7%  and is at fresh 2023-highs on reports it is being pursued as a takeover target by Thoma Bravo, according to Bloomberg. The pair are thought to be in advanced talks, according to unnamed sources, and a deal could be announced as soon as this week.

No final decision has been made and no deal is guaranteed, the sources said, and there is interest from other potential suitors too. NextGen provides cloud-based tech services to healthcare providers to help manage patient records.

Apple stock falls from 1-month high

Apple shares are down 1% today, falling from a one-month high after we saw a bearish Doji star form on Friday following a week of solid gains. That suggests the recent rally, which has seen it recover almost 9% since hitting three-month lows last month, may have run out of steam.

We discovered this morning that Foxconn, one of Apple’s largest suppliers, revealed overall sales fell 8% in August as demand for consumer electronics, including smartphones, remains subdued. However, it did say that “operations will gradually ramp-up” going forward as it posted a rosier outlook for the third quarter, underpinned by hopes that the launch of the new Apple iPhone 15 on September 12 will provide a new catalyst.

Blackstone and Airbnb to join the S&P 500

Blackstone is up 4.2% while Airbnb is trading 5.9% higher after it was confirmed they will both join the S&P 500 from the start of trading on September 18, replacing Lincoln National Corp and Newell Brands. That was announced late on Friday, so we are seeing markets getting their first opportunity to react today following the long weekend.

Visa and Mastercard at all-time highs

Visa is down 0.1% while rival Mastercard is flat this morning, with both ending last week at all-time record highs. Both stocks have rallied as payment volumes have remained healthy, helped by buoyant demand for cross-border travel, while reports they are preparing to raise fees for merchants could raise sales by hundreds of millions of dollars.

The RSI, especially for Mastercard, is on the cusp of entering overbought territory and we have seen some signs of greater resistance in recent sessions, which may make it more difficult to keep gaining ground from here.

Can Eli Lilly keep climbing to new all-time highs?

Eli Lilly is up 0.4% at $559.20 and is at fresh all-time highs this morning.

Notably, Berenberg said it sees further upside potential over the coming 12 months as it raised its price target on the pharmaceutical giant to $600 from $500 this morning.

Eli Lilly may be following its rival Novo Nordisk higher. The Danish company became Europe’s most valuable company after hitting all-time highs yesterday, when it launched its weight-loss and diabetes drug Wegovy in the UK. Eli Lilly is regarded as the biggest competitor and has also applied for its own drug, named Mounjaro, to treat obesity.

Disney pushes Hulu amid Charter dispute

Disney shares are trading marginally lower today, and still testing the recent multi-year lows, while Charter Communications is broadly flat. The pair have been under the spotlight since last week, when Disney pulled its channels from Charter’s Spectrum cable service, including its sports content, as the pair fail to agree on fees.

Charter Communications argues fees need to be looked at in light of the decline in traditional TV and the rise of streaming, while Disney is trying to get the most for its content. Disney said in a blog post yesterday that it hoped to strike a new deal with Charter, but simultaneously suggested Spectrum users missing its content sign-up to Hulu, in which it owns a majority stake.

“Despite the ongoing dispute, consumers have many other choices – such as Hulu + Live TV – that allow them to enjoy the great programming for which Disney Entertainment is known,” it said. “There’s no contract, no cable box, and no wait time to subscribe”.

Charter Communications has said it wants a “new collaborative video model” or has threatened to move on.

Qualcomm to supply chips to Mercedes and BMW

Qualcomm is trading down 0.7% after announcing it will supply chips to carmakers Mercedes and BMW that will be used to power infotainment systems in their vehicles as it tries to expand and diversify its income.

Qualcomm, like its rivals, has seen demand for chips used in the likes of smartphones come under pressure but has been growing its smaller automotive arm. It has said it expects to be generating about $4 billion in automotive sales by 2026 and around $9 billion by 2030.

Can C3.ai stock meet the AI hype?

C3.ai shares are down 0.7% today, with the company set to report quarterly results tomorrow. The bar has come down following the AI selloff we saw in August, but it remains high ahead of the update. The company has stirred plenty of excitement about its prospects, but pressure is building on it to start delivering.

Management are confident, but we are yet to see a tangible boost from AI. C3.ai is forecast to report a 9.6% rise in revenue in the first quarter to $71.6 million. That is a relatively underwhelming number for a small company that finds itself operating in the hottest space in the market right now. Investors will expect topline growth to start accelerating from this very low base going forward, so C3.ai will need to start converting and monetising all this new interest in AI as quickly as possible.

That growth may fail to get investors excited this quarter, especially as the rally in its share price has added around $2.4 billion to C3.ai’s valuation since the start of 2023. Therefore, a big beat could be needed (although unlikely considering consensus is in-line with its guidance), and/or an impressive outlook. 

You can find out more, including all the consensus numbers you need and our technical analysis on C3.ai stock, in our C3.ai Q2 Earnings Preview.

GameStop stock to face first test since shake-up

GameStop is down 0.5% ahead of second quarter earnings due out tomorrow and the company is still facing a big task. The video game retailer has been making losses for over three years now and is trying to escape the red, although markets don’t believe it will enter the black anytime soon.

That challenge is all the more difficult without growth. GameStop has seen sales decline over the past year and is expected to report just a 0.5% year-on-year rise in revenue in the second quarter. GameStop may still be loss-making but it is on the right path. Its net loss is predicted to come in at $49.4 million, which would be less than half the loss we saw last year. That is down to a sharper focus on costs and much lower spending. 

Notably, this will be the first set of results since there was a shake-up to the board. Ryan Cohen, the largest shareholder of GameStop, became executive chairman back in June after CEO Matt Furlong was let go. Meanwhile, Daniel Moore was appointed as its principal accounting officer and interim principal financial officer after Diana Saadeh-Jajeh resigned almost a month ago.

You can find out more, including all the consensus numbers to look out for and our latest technical analysis on GameStop, in our GameStop Q2 Earnings Preview.

Has AMC stock found the trough?

AMC Entertainment shares are down 0.5% today. The meme stock favourite has recovered 20% since hitting 32-month lows a week ago, having suffered one of its worst monthly performance after plunging over 70% in August as its reverse stock split and APE conversion plan wiped-out sentiment.

We saw an explosion in volumes when AMC hit that low and sank below the $11 threshold, but we have seen interest ease since then. That suggests that buyers were encouraged to re-enter at this level but not that interested in buying above here. The RSI remains in oversold territory to provide hope that the recovery has further to go, although some may still be put off by the fundamentals.

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