Reddit Stocks: What meme stocks are trending today? – September 18, 2023

US futures

• Dow Jones Industrial Average is down 0.1%
• S&P 500 is down 0.2%
• Nasdaq 100 is down 0.3%

Week Ahead: Central banks and flash PMIs

It is a quiet start for the economic calendar, but all eyes are on central banks later this week as the Federal Reserve, Bank of England and Bank of Japan all make their next interest rate decision. We also have flash PMI figures and inflation data out from the UK, Canada, Europe and Japan.

Find out what to expect from all these major events in the Week Ahead.

Oil prices hit fresh 10-month high

Markets are keeping a close eye on oil prices because there are concerns that this could fuel a revival in inflation. The price of a barrel has seen a mild rise over the weekend, with Brent and WTI both edging up to fresh 10-month highs as bets have risen over the last three weeks that the market will remain tight for the rest of 2023 thanks to extended production cuts from Saudi Arabia and Russia and declining inventories in the US. Higher, albeit potentially premature, hopes that the Chinese economy may finally be starting to gain some traction following pockets of better data is also helping the demand outlook.

“Today, Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, will speak at the World Petroleum Congress. Comments on the kingdom’s crude oil policies will be watched closely, as the kingdom appears to be pushing oil to $100 a barrel,” said our analyst Fiona Cincotta.

You can read Fiona’s analysis on oil and EUR/USD in Two Trades to Watch.

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. C3.ai
2. NVIDIA
3. Tesla
4. Arm
5. Apple
6. American Strategic Investment
7. Carvana
8. General Motors
9. Eni
10. Ryder System

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. MSP Recovery
2. Nikola
3. Marathon Digital
4. Apple
5. Tesla
6. Palantir
7. Riot Platforms
8. NVIDIA
9. Lucid Group
10. Tilray

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.

Can Arm stock maintain its premium valuation?

British semiconductor designer Arm went public last week and swiftly gained ground after popping 25% on its first day of trading on Thursday. However, we saw a more volatile session on Friday when the stock initially gained ground before reversing to close down 4.5%. The stock is down 2.6% before the bell this morning at $59.17, giving it a valuation of around $56.5 billion compared to its IPO price tag of $54.5 billion, or $51 per share.

Arm’s valuation looks lofty no matter what metric you use, which raises the question of whether it will be able to maintain its premium. Arm generated $524 million in net income in the last financial year that ran until the end of March 2023, or $0.52 per share. That puts its price-to-earnings ratio in the region of 113x!

Arm is underpinning that valuation on a new strategy focused on selling more comprehensive, advanced and financially-rewarding chip designs rather than the business today, heightening the pressure on it to deliver.

You can read more on this in Can Arm Maintain or Grow its Premium Valuation?

Can Instacart IPO add more momentum?

Hot on the heels of the Arm listing is ecommerce giant Instacart, officially trading as Maplebear and set to raise up to $660 million today before shares start trading on Tuesday, according to Bloomberg.

The company is set to price its IPO at $28 to $30 a share, which would give a valuation in the range of $9 billion to $10 billion. That was raised from the initial range of $26 to $28, suggesting there was strong enough demand for Instacart to try and squeeze out a higher valuation. That is all the more significant considering its valuation is set to fall from loftier levels when it was private, having earned a $39 billion valuation back in 2021. The drop in value comes despite Instacart turning profitable in 2022.

You can find out more in Everything You Need to Know About the Instacart IPO.

This will also be closely-watched as more IPO contenders like Birkenstock and Klaviyo prepare to list in the coming weeks. Klaviyo also decided to raise its IPO fundraising target today, building hopes that investors have strong appetite for new listings and that the IPO market is coming back to life.

NVIDIA stock hits 1-month low

NVIDIA shares are down 2% and set to open at their lowest level in a month. That is amid a broader selloff in chip stocks, with the Philadelphia Semiconductor Index also slumping to one-month lows today.

NVIDIA is now down over 11% from the all-time highs we saw at the end of August.

Optimism lifted by Apple iPhone 15 pre-orders

Apple shares are trading marginally higher today after two analysts said early pre-order data for the recently-launched iPhone 15 are better than expected, lifting hopes the new handset can revive demand.

Both Morgan Stanley and Wedbush said pre-orders are running ahead of what they anticipated, with consumers thought to be increasingly opting to buy the priciest Pro Max model that received the most upgrades. That is significant as only the Pro Max saw its price increased, which is set to help iPhone revenue grow this cycle.

Morgan Stanley said that figures out from China are also better than feared amid reports of a potential ban and a rise in popularity of Huawei. It said all of this is encouraging given the “extreme negative investor sentiment” and said we could see a short-term recovery in the share price if these numbers remain stable or improve further.

Apple is also set to start rolling-out the iOS 17 update today, introducing several new features.

Can US automakers end the UAW strike?

General Motors, Ford and Stellantis are down 0.1% to 1.6% today as the strike by the United Auto Workers union enters its fourth day, raising the pressure on the automakers to strike a deal and end the industrial action.

Union members are fighting for inflation-busting pay rises while companies are trying to limit expenses at a time when inflationary pressures and the costly transition to electric vehicles are weighing on their results. UAW president Shawn Fain said on Sunday that progress was slow after negotiations restarted over the weekend and didn’t rule out expanding the strike beyond just three plants at present.

Carvana on steadier footing

The strike action isn’t bad news for all. Used car retailer Carvana tested their highest level in over a year when strike action erupted last week before pulling back on Friday. The stock is up 0.8% this morning at $52.61 after Wedbush upgraded the stock to Neutral.

Wedbush said its recent debt exchange should give it some vital breathing room and that there is upside for profitability in the second half of 2023. It raised its price target to $48 from $40, but still sees it as overvalued.

Countries woo Tesla to set up shop

Tesla, also seen as a beneficiary of the strike action hitting its traditional rivals, is down 1% amid reports the electric carmaker is in early talks about building a factory in Saudi Arabia, according to unnamed sources speaking to the Wall Street Journal.

The company is thought to have been enticed by offers from Saudi Arabia to help it secure the key metals and minerals it needs for its vehicles from different countries, including the Democratic Republic of Congo. This could include the government providing financing to commodities trader Trafigura so it can take-on a cobalt and copper project in the DRC that could help supply Tesla, the report said.

Notably, the Saudi Arabia Public Investment Fund is the controlling shareholder of smaller rival Lucid Group, which is up 0.2% this morning.

Meanwhile, Turkish president Recep Tayyip Erdogan invited Tesla to set up a factory in the country when he met CEO Elon Musk in New York, according to the presidential office.

Airbnb and Blackstone join the S&P 500

Travel accommodation platform Airbnb shares are down 0.6% and asset manager Blackstone is down 0.3% as both prepare to join the S&P 500 today and begin trading as part of the index when the opening bell rings.

Will Disney sell its Indian TV and streaming units?

Disney shares are up 0.3% amid news it has held preliminary talks about selling its TV networks and streaming services in India with multiple buyers, including Reliance Industries, according to unnamed sources speaking to Bloomberg.

This could see it sell Disney Star altogether, or break it up into several smaller deals. There is everything from sports rights to its local streaming service Disney + Hotstar up for grabs. That follows on from previous reports that Reliance’s joint venture with Paramount was interested in taking a stake in the business. No deal is guaranteed, the report said.

Disney is hoping M&A can help it revive its fortunes and reports that it is in talks about several deals, including selling its US TV networks, and this has helped lift the share price for six consecutive sessions since hitting its lowest since 2014!

Pfizer sees 24% of Americans getting Covid jab

Pfizer shares are up 0.1% after chief financial officer David Denton said he expects an uptake rate of about 24% for its Covid-19 vaccination this year during a conference.

Reuters reported this suggests about 82 million people will get the jab. That follows on from rival Moderna, which is down 0.3%, saying it expected to sell 50 million to 100 million doses of its jab this fall.

C3.ai stock hits 4-month low

C3.ai shares are down 1.3% after closing at their lowest level in almost four months on Friday, with the stock having lost the love of the markets since the over-zealous buying spree of AI stocks started to temper in August.

Joby Aviation to build base in Ohio

Joby Aviation is up 0.6% after announcing plans to build a factory in Ohio that will be able to produce up to 500 air taxis each year, in the latest sign that the ambitious company is stepping closer to making its plans a reality.

The company will invest up to $500 million into the plant, which will hire up to 2,000 workers. It is expected to benefit from up to $325 million in incentives, and could qualify for loan support as a clean energy project.

Alteryx stock “too cheap to ignore”

Alteryx is up almost 4% at $36.23 and testing six-week highs after it was upgraded to Overweight from Equal-Weight by Morgan Stanley, which said the software company is undervalued based on its growth and profit potential – stating the stock is “too cheap to ignore”.

The broker said the company struggled in the first half because customers pulled back on spending rather than more intense competition, which should allow it to reap rewards when budgets finally recover.

Bitcoin hits September-highs

Bitcoin popped over 2% today to surpass the $27,000 threshold, marking its highest level since the end of August. That is providing support to cryptocurrency stocks like Marathon Digital and Riot Platforms, which are both trading over 4% higher today.

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