Memes are simply images and videos with humorous text included that tend to spread rapidly across the internet. Combine them with stocks and you get wallstreetbets. That’s where the majority of meme stock information is communicated. For an easier-to-navigate listing of meme stocks investors can go here. That’s where all of the companies discussed below were found. These shares are not risky overall despite the reputation that investing in meme stocks may have. There are a few bets to be sure. But those are substantiated using the reasoning of the commenters which is logical. That said, let’s get into those meme-worthy and investment-grade shares.
When investing in meme stocks, Nvidia (NASDAQ:NVDA) is far and away the most talked about stock on memestocks.org. It also happens to be a highly respected firm with a lot of positives worth understanding. Meme stocks have a reputation for being risky. Nvidia, despite being one of the largest companies globally, is certainly risky, too. It carries a beta of 1.77 meaning it moves much faster than the markets overall. It produces rapid gains but also produces rapid losses when the market reverses. That said, Nvidia is currently riding a massive upswell. In fact, it has more than doubled in 2023 after beginning at $148. It currently trades for $311, not far from pandemic highs of $324 reached in late 2021.
A lot of the wallstreetbets discussion centers on whether NVDA is a bubble stock ready to pop. It’s certainly more than fully priced currently. But NVDA is the AI chip king and it should be able to ride that for some time until data suggests otherwise.
When also talking about investing in meme stocks, AMD (NASDAQ:AMD) is a strong one to consider. Along with Nvidia, it’s also part of the AI story. The idea is that companies will make their own chips as well and buy from AMD. One particular commenter references Nvidia’s CUDA GPU programming platform and its eroding moat. If and when that position deteriorates, AMD should logically be able to grab back a piece of the pie. Even better, AMD is projected to continue to grow this year and next. Tech stocks have stabilized after a dismal 2022.
Microsoft (NASDAQ:MSFT) is another solid bet when investing in meme stocks. Like the previous companies discussed above, most of the conversation around MSFT focuses on the AI boom these days. Even better, this year, the company should report around $211 billion in revenues. That would represent a 1.8% increase over 2022’s $207.6 billion in sales. It’s a modest bump but investors have to remember that the pandemic accelerated tech to unsustainable growth levels.
Here’s the kicker: Microsoft is expected to grow to $235 million in sales by 2024. That would represent 11% growth if correct and arguably justifies all the AI hype ongoing now about MSFT. It’s also very easy to argue that Microsft is entering another pandemic-like growth opportunity based on its AI investment in OpenAI. That makes a lot of sense.
Halozyme Therapeutics (HALO)
Halozyme Therapeutics (NASDAQ:HALO) is one of the most referenced companies on wallstreetbets. The biotech stock is also a fundamentally sound investment. In fact the company is well past breaking even and produces net gains on a GAAP basis. And, it’s also growing rapidly with a 38% increase in revenues year over year. That growth is expected to continue this year and through 2024. The positive news for investors is that there’s 50% upside beyond current prices remaining for HALO stock(3).
Western Alliance Bancorp (WAL)
Western Alliance Bancorp (NYSE:WAL) is the only stock on this list that is considered high-risk. Wallstreetbets investors think WAL shares have a chance to produce returns for a few reasons. After its collapse, it remains a value based on the target price for one. But they were more interested in the fact that ‘Big Short’ investor Michael Burry took big positions in regional banks in the first quarter. That included 125,000 shares of Western Alliance Bancorp. One commenter rightly noted that we have no idea of his continued ownership, hedging strategy, or calls and puts. Instead, we only know that he established a position.
Deposits continue to be the primary concern in discussing regional banks. WAL stock appears to be healthy from that perspective. Deposits have grown by $1.8 billion quarter-to-date with insured deposits accounting for 79% of all deposits. Only 68% of deposits were insured as of March 31.
Investors don’t hear much regarding Caterpillar (NYSE:CAT) stock these days. There’s no infrastructure bill being considered that could spur growth. Likewise, there’s not an overall growth boom at all that would catalyze development and heavy equipment sales. Instead, there’s a sense of foreboding backed by fears of a recession. That would spell big trouble for CAT as sales would almost certainly slump.
So the markets continue to view Caterpillar through that lens, seeking any signals in either direction. When the company last released earnings in late April, the signs were positive. Sales increased by 17%, margins increased from 13.7% to 17.2%, and CAT topped prior guidance.
The company has been able to not only increase its sales volumes but also the prices of its products. That may seem to be counterintuitive given how expensive heavy-duty equipment is but that’s what has happened. CAT stock prices have fallen nonetheless since the release on continued macroeconomic fears. Buy for the dividend income and steady price and disregard overarching fear.
Public cloud firm Snowflake (NYSE:SNOW) and its stock have had a very strong 2023. Share prices have risen from $124 to $176. That resurgence is largely explained by a rebound in tech stocks as Fed rate hikes taper downward.
As it stands now, The Fed is likely to halt rate hikes later this year. That will result in surging tech stocks and a renewed focus on growth stocks rather than value stocks. That’s why Snowflake is likely to continue to receive positive market reception.
The company reported $2.066 billion in revenues in 2022. Sales are expected to reach $2.87 billion this year. 38% annual growth is near the 40% hypergrowth threshold. And Snowflake is expected to see $3.91 billion in sales in 2024. That’s about 36% growth. Yes, it loses a lot of money still. But it has high margin product and as soon as losses show signs of narrowing it’ll really surge.
On the date of publication, Alex Sirois 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.