The meme stock rally of 2021 with go down in the books of financial history as one of its most interesting time periods. It all started with GameStop (NYSE:GME) stock skyrocketing by 400% in one week in January 2021. Other meme stocks joined the rally with AMC Entertainment (NYSE:AMC) going ballistic and rocketing 1,200% higher.
However, with the tightening of monetary policies and revised growth expectations, the meme stock rally fizzled out. An important point to note is that the markets have discounted the rate hike factor. The S&P 500 index has been trending higher year-to-date. If the positive momentum sustains, I would not be surprised if the meme stock frenzy is back in the coming quarters.
The 2021 craze showed that multibagger returns can be a matter of weeks or few months. It therefore makes sense to consider exposure to potential meme stocks before the onset of the rally. It’s difficult to make an entry that is guaranteed to deliver multibagger returns. But, I think these three meme stocks to buy are good candidates to deliver robust returns at the blink of an eye.
Marathon Digital (MARA)
Anything related to cryptocurrencies is well known to attract the attention to meme stock investors. Marathon Digital (NASDAQ:MARA) stock seems like an interesting pick for a stellar rally. It’s worth noting that MARA stock has corrected from recently hitting its 52-week high of $19.88 to current levels below $14. Further, with short interest that’s 21% of free-float, MARA stock is positioned for a big reversal rally.
On the fundamental front, Marathon reported revenue and earnings miss for Q2 2023. That’s one reason for the stock trending lower. However, it’s worth noting that the company reported an operational hash rate of 17.7EH/s as of Q2 2023. Further, the installed hash rate has increased to 21.8EH/s. With sustained growth in mining capacity, the outlook remains optimistic.
Another important point is that Bitcoin (BTC-USD) seems to be in a consolidation mode around $30,000. With halving due in 2024, I expect the cryptocurrency to surge higher. If the surge happens it will translate into multibagger returns from MARA stock by the end of 2024.
Lucid Group (LCID)
Lucid Group (NASDAQ:LCID) is another name among meme stocks to buy for quick returns. In the last 12 months, LCID stock has plunged by 66%. However, the short interest in the stock remains high at 22% of the free-float. With the stock looking oversold and considering the short interest, I believe a big short squeeze rally is on the cards. The rally is likely to be bigger than expected if the meme stock euphoria is back.
From a business perspective, there are few factors that can support the rally. First, the commencement of deliveries for Lucid Air Sapphire is due in Q4 2023. It’s likely that the company’s deliveries growth will accelerate in the second half of the year.
Lucid has also boosted its balance sheet with a current cash buffer of $6.25 billion. With strong financial flexibility, the company seems to be on-track to commence deliveries of Lucid Gravity towards the end of 2024. Cash burn will however remain a concern.
Solid Power (SLDP)
Solid Power (NASDAQ:SLDP) is another stock that has been in a downtrend in the last 12 months. However, I believe that in a meme stock rally scenario, SLDP will skyrocket.
As an overview, Solid Power is working towards the commercialization of solid-state batteries. Even with some steady progress, it’s unlikely that commercialization will come before 2026. However, there are few potential catalysts on the horizon. These catalysts coupled with possible meme stock action can translate into multibagger returns in SLDP stock.
As an example, Solid Power will be delivering EV cells to automotive partners for valuation testing in 2023. Positive news on that front can be a big stock upside trigger. Further, the company has signed an agreement with BMW (OTCMKTS:BMWYY) to license its cell manufacturing technology. This will allow parallel research and development activity, which can potentially accelerate the commercialization.
On the date of publication, Faisal Humayun did not hold (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.
