Whether he’s rebranding social media company Twitter as X, launching the Cybertruck at electric vehicle maker Tesla (NASDAQ:TSLA), or sending supplies to the international space station via rockets made by commercial space concern SpaceX, Elon Musk is a busy man and technology visionary.
He’s also a controversial figure who is known for promoting cryptocurrencies and conspiracy theories, as well as sparring online with politicians and other tech leaders. He’s reportedly going to fight Meta Platforms (NASDAQ:META) CEO Mark Zuckerberg at an upcoming event to be streamed online.
Because of all these things, Elon Musk has amassed a considerable fan base around the world. Legions of retail investors hang on Musk’s every word and often replicate his actions, including when it comes to investing. This is often beneficial, and sometimes detrimental, to the fan base. But love him or hate him, there’s no denying Elon Musk’s influence.
Here are three stocks to buy if you are an “Elmo” fan boy.
Shopify (SHOP)
Musk might fuse his appetite for risk with his love of technology and take a position in e-commerce company Shopify (NYSE:SHOP). This investment does look risky after Shopify recently reported a second-quarter net loss of $1.3 billion. Yet, despite the hefty Q2 loss, SHOP stock is up more than 60% this year and has been recovering following a post-pandemic selloff.
Many analysts remain bullish on SHOP stock, especially since the recent Q2 loss was almost entirely due to restructuring costs incurred after the company laid off 20% of its workforce and sold its logistics business called “Flexport.” Beyond the net loss, Shopify’s revenue in Q2 of this year actually rose, gaining 30% from a year earlier to reach $1.7 billion. Some notable names on Wall Street see a bright future for Shopify, with CNBC commentator Jim Cramer saying that the company has become the de facto Amazon for small businesses.
PayPal (PYPL)
Elon Musk came to prominence as a co-founder of financial technology company PayPal (NASDAQ:PYPL) back in 2000. The PayPal Mafia, including Musk and tech visionaries Peter Thiel and Max Levchin, sold the pioneering payments company to eBay (NASDAQ:EBAY) in 2002 for $1.5 billion. Musk used proceeds from the $100 million he made on PayPal’s sale to found spaceflight services company SpaceX and invest in Tesla. Given his history with PayPal, Musk might take a position in the company with the stock down 14% YTD.
In 2015, eBay spun off PayPal, making it an independent publicly traded company. Lately, the stock has struggled with declining profit margins, sparking growth concerns. PayPal just released its Q2 earnings, which managed to beat Wall Street forecasts but showed declining margins and offered middling forward guidance, ultimately sending PYPL stock lower. Analysts drew a red circle around news that PayPal’s operating margins were 21.4% in Q2, down from 22.7% in this year’s first quarter. Still, Musk might buy PayPal stock with it down 33% in the last 12 months.
Netflix (NFLX)
Streaming giant Netflix (NASDAQ:NFLX) reports its quarterly earnings on the same day as Tesla, and Musk might be tempted to buy the dip after NFLX stock sold off 7% following the company’s Q2 print.
Netflix’s share price has recovered somewhat since the company announced its Q2 numbers on July 19. Over the past 12 months, NFLX stock has increased 86%, including a 48% gain so far in 2023. Musk might appreciate that Netflix added 5.9 million net new subscribers during Q2, which crushed the 1.9 million that Wall Street had forecast.
The latest subscriber additions marked the company’s best quarter since the depths of the pandemic in 2020. Netflix had a total of 238.4 million subscribers worldwide as of June 30 this year. The impressive gains were overshadowed by forward guidance that calls for revenue of $8.52 billion in the current third quarter, which was lower than the $8.67 billion that analysts had penciled in.
Musk is sure to like that Netflix has disrupted its own business by cracking down on password sharing and launching an advertising tier on its platform.
On the date of publication, Joel Baglole 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.
