3 Meme Stocks With Too Much Potential to Be Trending on r/WallStreetBets


  • Here are three meme stocks that shouldn’t be meme stocks.
  • Bloom Energy (BE): A clean energy innovator at the front of a booming market.
  • ON Semiconductor (ON): A chipmaker that has stood its ground through strong volatility.
  • SoFi Technologies (SOFI): A fintech innovator leading us away from the banking crisis.
meme stocks - 3 Meme Stocks With Too Much Potential to Be Trending on r/WallStreetBets

Source: Marcus Krauss / Shutterstock.com

Anyone who follows the volatile world of meme stocks knows that the company on the r/WallStreetBets radar can change quickly. While some stocks can trend across social media one day only to disappear the next, some companies rarely fall from their spots atop the most discussed companies across digital investing forums. Companies like GameStop (NYSE:GME) and AMC Entertainment (NYSE:AMC) will always be on the lists of top meme stocks. Even when favorites like Bed Bath & Beyond (OTCMKTS:BBBYQ) are forced to delist from major exchanges, they still keep the attention of the r/WallStreetBets crowd.

Popular meme stocks are often largely unprofitable and should typically be avoided. A dangerous groupthink mentality has helped fuel this craze. As InvestorPlace markets analyst Thomas Yeung reports:

“Consider Mullen Automotive (NASDAQ:MULN), an electric vehicle (EV) startup that routinely sits in the top-five most-mentioned stocks on Stocktwits.

From a fundamental standpoint, there’s little that’s attractive about Mullen. Since going public in 2021 through a reverse merger, the company has managed to burn through at least $210 million of cash without delivering a single Mullen FIVE. Instead, it has provided a constant stream of questionable press releasesenormous shareholder dilution and outsized pay packages for insiders.”

As Yeung notes, Mullen remains one of the most consistently popular meme stocks, despite its apparent inability to demonstrate sustainable growth. However, several companies that have risen in popularity on digital investing forums lately don’t fit the traditional meme stock profile. On the contrary, they offer investors exposure to key markets poised to keep growing throughout 2023 and beyond. Here are three companies that are too profitable to be trending on r/WallStreetBets.

Meme Stocks: Bloom Energy (BE)

Bloom Energy logo at their headquarters in Silicon Valley
Source: Sundry Photography / Shutterstock.com

This fuel cell technology innovator does have one meme stock qualification: it’s been declining steadily for months. However, investors shouldn’t be fooled. Bloom Energy (NYSE:BE) isn’t a fallen tech company whose best days are behind it. It’s a leader in a booming sector that will only grow throughout the decade. Recent data indicates it is expected to reach $36.41 billion in 2029, expanding at a compound annual growth rate (CAGR) of 29.7%. That means significant growth potential for the companies at the top of the sector. Hydrogen technology is helping propel the clean energy revolution forward, and Bloom’s solid oxide fuel cells generate clean power on site.

Part of the stock’s recent declines has been due to a $500 million offering last week. While this news didn’t help share prices initially, Morgan Stanley analysts recently described the selloff as “overdone,” citing Bloom’s significant upside potential. As InvestorPlace‘s Louis Navellier notes, “BE stock offers pure-play exposure to the hydrogen economy’s future growth.” That’s an accurate assessment of the company, but it doesn’t sound like a meme stock characterization. Nevertheless, Bloom has been rising in popularity on r/WallStreetBets lately, and according to ApeWisdom, it received no negative comments.

ON Semiconductor (ON)

In Ultra Modern Electronic Manufacturing Factory Design Engineer in Sterile Coverall Holds Microchip with Gloves and Examines it.
Source: Shutterstock

It’s no secret that ON Semiconductor (NASDAQ:ON) has been enjoying an excellent year. ON stock is up more than 36% year-to-date (YTD), demonstrating consistent growth through turbulent markets. It recently caught the eye of Bank of America analyst  Vivek Arya who made a bullish prediction, issuing a $100 price target for ON, forecasting an upside of more than 21%. That may seem bold, but ON stock has been one of the most consistent performers among chipmakers, holding steady even as demand for its products has faltered. As InvestorPlace contributor Alex Sirois states:

“A big factor in the firm’s success is its alignment with growth industries. ON Semiconductor is deeply aligned with the automotive sector. The company’s automotive sector revenues increased by 38% in the most recent quarter, accounting for a record 50% of revenues. ON Semiconductor should see similar performance throughout the remainder of 2023 with flat growth but, again, that’s very strong growth when taken in a relative sense.”

While its sentiment on r/WallStreetBets may not be as positive as Bloom Energy’s, ON has still received 63% positive comments over the past 24 hours. According to Best Stocks, short interest is rising, but that doesn’t take away from the company’s growth potential.

Meme Stocks: SoFi Technologies (SOFI)

Silhouette of person holding mobile phone with SoFi (SOFI) logo shown in background
Source: shutterstock.com/rafapress

One of the most controversial meme stocks out there, SoFi Technologies (NASDAQ:SOFI), isn’t receiving as much attention from the r/WallStreetBets crowd as Bloom or ON. However, this fintech innovator always seems to be on their radar. Granted, all smart investors should be watching SOFI stock carefully. While it hasn’t performed well recently, there’s little doubt that the banking crisis has created ample opportunity for companies in the digital finance space. SoFi is changing how young people handle their finances, giving them the tools to do it all digitally. For that reason, InvestorPlace‘s Luke Lango predicts gains of up to 24X for SOFI stock over the coming decade.

Lango isn’t the only expert who sees SoFi as a valuable growth play. Navellier has also flagged it as a key way to “bet on a banking sector comeback,” citing it as a top pick for contrarian investors. In that, we see why it may have caught the attention of the r/WallStreetBets crowd. But even if the stock has strong contrarian appeal, it still offers genuine value and strong growth potential. SoFi is well positioned to help lead U.S. markets out of the banking crisis, and when it does, share prices will soar. The company may have fallen enough to consistently trend on Reddit, but that doesn’t mean it can’t rebound on its own.

On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Article printed from InvestorPlace Media, https://investorplace.com/2023/05/3-meme-stocks-with-too-much-potential-to-be-trending-on-r-wallstreetbets/.

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