Top Reddit stocks to watch
Below is a list of the top 10 most mentioned US stocks on the WallStreetBets thread on Reddit over the last 24 hours on September 23, 2022, according to data from Quiver Quantitative. Exchange-Traded Funds (ETFs) have been excluded.
- Advanced Micro Devices
- Cassava Sciences
US futures are trading sharply lower today as fears about tighter monetary policy and an economic slowdown grips markets. The S&P 500 is down 1.4% while the Nasdaq 100 is 1.5%, with both indices trading around their lowest level in three months. This week’s interest rate hike, along with weaker economic projections from the Federal Reserve, has weighed on markets. Goldman Sachs said it now expects the S&P 500 to end 2022 at 3,600, a marked move from its previous target of 4,300 to reflect more aggressive rate hikes. You can find out more about how US markets will fare in Will the S&P 500 Continue to Suffer this Q3 Earnings Season?
Costco shares are down 3.3% before the bell at $471. The member-only big box retailer said revenue rose 15% in the fourth quarter to $72.1 billion while adjusted EPS rose 12% to $4.20. That came in ahead of the $72.0 billion in revenue and $4.17 in EPS pencilled-in by analysts. Although that was a welcome result in what is proving to be a challenging environment for retailers, Costco’s margin remains under pressure thanks to supply chain problems and rising costs. The fact inventory levels were some 26% higher than the year before has also fuelled concerns about profitability as it could lead to more promotional activity. Wall Street largely welcomed the update and said Costco is likely to raise the cost of its membership going forward, which should boost estimates. Stifel said things could remain choppy given the uncertain economic picture, but said Costco remains a best-in-class retailer. Oppenheimer cut its target price to $550 from $600 tis morning while JPMorgan trimmed its view to $550 from $589. DA Davidson bumped its target price up to $455 from $440.
FedEx shares are down 3.2% at $149.64 and eyeing fresh two-year lows after its plans to cut up to $2.7 billion in costs response to a sharper slowdown in demand than anticipated failed to allay the market’s fears around the US bellwether. The company revealed EPS dropped 21.3% in the latest quarter after issuing a warning last week. However, analysts remained cautious about the severe drop in earnings considering revenue was up 5.5% in the quarter. Analysts at Citi said ‘we don’t think management was successful in convincing investors that it has a credible plan it can execute on’. Morgan Stanley said there was not much explanation around why it missed expectations in the latest quarter and that ‘details in the plan was lacking’. Bloomberg Intelligence warned earnings estimates are likely to be volatile over the coming months as markets evaluate how much cost-cutting efforts can offset slower growth. Brokers slashed their target prices on the stock as a result, including Cowen to $185 from $230, Citi to $165 from $180, Credit Suisse to $236 from $246 and JPMorgan to $192 from $214.
Meta shares are down 1.4% this morning and trading at levels not seen since the pandemic-induced lows back in March 2020. Reports from the Wall Street Journal this week that it is planning to cut costs by at least 10% in the coming months, mostly by making job cuts, has failed to revive its fortunes. The company is trying to adapt to a world of slower growth and tougher competition. Unnamed sources suggested existing job cuts have been a prelude to deeper cuts to come, with this set to deliver the majority of savings in addition to those generated by reducing overheads and consulting budgets. The company had over 8,500 employees at the end of June, up almost one-third from the year before.
Microsoft shares are down 1.4% in premarket trade and trading at fresh 18-month lows. CEO Satya Nadella, speaking in an interview on Bloomberg Television, said that ‘we feel very, very confident’ about getting approval for its acquisition of video game maker Activision Blizzard after UK regulators said they were launching a longer review into the deal and its impact on competition earlier this month. However, markets remain doubtful considering Activision Blizzard shares are trading some 20% below the deal price. Meanwhile, Microsoft is set to hire 1,000 new members of staff in China despite a slowdown in the economy and widespread layoffs in the tech sector, according to the South China Morning Post. That will take its Chinese workforce to over 10,000 next year, with around 80% of its staff in the country working on R&D.
Apple shares are down 1.7% today. Apple Music is set to become the title sponsor of the infamous Super Bowl halftime show in February 2023, taking over from Pepsico which had headlined the intermission since 2013. The Super Bowl is one of - if not the - biggest television event of the year for Americans, with over 120 million people watching the last half time show. Financial terms were not disclosed but some reports suggest it will pay up to $50 million each year in what is thought to be a five-year deal.
Semiconductor stocks continue to struggle, with the Philadelphia Semiconductor Index trading at its lowest level in almost two years. AMD shares are down 2.5% and at their lowest level in over two years, while NVIDIA is down 2.7% and at 18-month lows. A slowdown in demand for gaming consoles and consumer electronics and the weight of the recent ban on exporting advanced chips to China has severely soured sentiment over the industry’s prospects. NVIDIA CEO Jensen Huang said this week that he believes there is still a large market for the company’s data centre chips in China despite the newly imposed restrictions and that the ‘vast majority of our customers are not affected’ by the ban.
Tesla shares are down 2.2% and at two-week lows in early trade today. The company has told the National Highway Traffic Safety Administration that it is recalling almost 1.1 million cars in the US amid a fault with the electric window, which will be fixed using an over-the-air software update. The problem pertains to the automatic reversal system not reacting correctly when met with an obstruction. An update was provided to new cars and those that were waiting to go out for delivery on September 13, Tesla said.
GameStop shares are down 1.4% before the bell and at two-week lows, putting the stock on course to book a fourth consecutive day of losses.
Cassava Sciences shares are down 3.5% this morning after popping to their highest level in almost a year yesterday. The company has caused hype around its drug in development aimed to treat Alzheimer’s disease. It is currently undergoing a Phase 3 trial involving over 400 patients and data so far suggests it is safe and well-tolerated. However, there are still plenty betting against the stock considering short interest remains high at around 35% of its free float, according to data from S3 Partners.
Other US movers to watch
Boeing shares are down 1.8% in extended hours and at their lowest level in over two months after agreeing to pay $200 million to settle civil charges from the SEC stemming from allegations it misled investors about the 737 MAX, which has been under tough scrutiny since being involved in two fatal crashes. However, the company did not admit or deny any of the SEC’s findings.
Ford shares are down 3.5% today after announcing it will restructure its global supply chain just days after warning it would book up to $1 billion in additional costs in the current quarter. Creating reliable supplies of components, advancing use of technology and ‘world-class cost and quality execution’ will spearhead the plan, but a spokesperson said this was not related to the announcement made earlier this week that caused the biggest single-day plunge in Ford shares in over a decade.
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