Reddit Stocks: What meme stocks are trending today? – July 25, 2023

US futures

• Dow Jones Industrial Average is up 0.1% and set to open at a 17-month high
• S&P 500 is up 0.1%
• Nasdaq 100 is up 0.3%

Earnings remain under the spotlight today considering the economic calendar is fairly subdued before things pick up for the rest of the week, when all eyes are on the Federal Reserve’s interest decision tomorrow before attention turns to the ECB on Thursday and the BoJ on Friday. We have the S&P/Case-Shiller home price data and CB consumer confidence out this morning, followed by the API crude oil stock change later.

Most discussed Reddit stocks

Below is a list of the top 10 most mentioned US stocks on the WallStreetBets thread on Reddit over the last 24 hours, according to data from Quiver Quantitative. Exchange-Traded Funds (ETFs) and other instruments have been excluded:

1. AMC Entertainment
2. Tesla
3. Microsoft
4. NVIDIA
5. Carvana
6. C3.ai
7. Visa
8. Snap
9. Meta
10. Sirius XM Holdings

Most active US stocks before the bell

Below are the most active stocks with a valuation of at least $500 million before the bell, based on trading data taken from Bloomberg:

1. AMC Entertainment
2. Tesla
3. General Motors
4. Nikola
5. SoundHound AI
6. Rivian
7. WeWork
8. Lucid Group
9. JetBlue Airways
10. Spotify

US premarket winners and losers

Here are the stocks worth at least $500 million experiencing the sharpest movements in premarket trade, according to data from Bloomberg:

Top US stocks to watch

Microsoft is up 0.9% ahead of results out after markets close today. The company has proven more resilient than its Big Tech rivals thanks to its diversified business model and it appears to be carving out an early lead in the race for artificial intelligence supremacy. Earnings are expected to grow at their fastest pace in 18 months thanks to easier comps and a tighter grip on costs. Its cloud computing arm is already processing AI workloads and it has recently outlined pricing plans for its first commercial AI tools, showing it is ready to monetise. Still, investors have not yet assigned huge value to Microsoft’s valuation. Meanwhile, markets are more confident than ever that Microsoft will complete its takeover of Activision Blizzard, even if they have had to extend the deadline as they try to overcome the last of the regulatory hurdles. You can find out more in our Microsoft Q4 Earnings Preview.

Alphabet is up 0.6% and also reports after the closing bell. The company has risen almost 36% since the start of the year but has underperformed its Big Tech rivals and the broader Nasdaq 100 due to its dependence on advertising and its failure to convince the markets that AI is an opportunity and not a threat. This should be a turning point, with earnings set to grow for the first time in 18 months. Sales growth is starting to accelerate thanks to easier comps but the ad market remains vulnerable. Google Cloud will please investors if it can turn out its second consecutive quarter of profits, an aptly-timed move as the industry suffers from a slowdown in spending. Alphabet must demonstrate it can be a leader in AI and convince markets that the technology will be a catalyst, with markets worried after Microsoft declared war on Google’s search engine. It recently merged its DeepMind and Brain units together – which should fuel future product launches - and it has recently relaunched its Bard AI chatbot in Europe after addressing security concerns, while also introducing it into other countries like Brazil. You can read more in our Alphabet Q2 Earnings Preview.

Snap is down 0.2% this morning ahead of earnings later today. Snap is up over 43% this year and this surge in value may be tested. We have already seen the share price pullback from one-year highs recently. Revenue is forecast to be down 5.3% from last year at $1.05 billion. Snap is expected to have ended June with over 395 million daily active users on its platform, up 14% from a year ago and growing from the 383 million it had at the end of March. But revenue per user remains under pressure due to softer ad conditions. Snap is particularly geared toward smaller and mid-sized businesses, which may prove more vulnerable to the increasingly challenging economic climate. Watch ad pricing as there are some green shoots here, although a recovery looks unlikely before the end of this year. Snap is forecast to report an adjusted Ebitda loss of $61.7 million, turning from a $7 million profit the year before. That would be the first quarterly loss in almost two years! It is also set to burn through cash. That is worrying considering the comps are easy following the pressure we saw on financials in 2022. The outlook suggests more losses and sales declines are to come in the third quarter, with a partial recovery seen emerging in the final three months of the year.

Meta is up 1.2% at $295 ahead of results out tomorrow, with the stock having had its target price raised to $350 from $280 by Mizuho this morning. This could be a big quarter for Meta, and one that could be needed to maintain the stellar gains booked in 2023 following the heavy selloff we saw last year. Earnings are forecast to grow for the first time in 18 months as comps are ironed-out and it reaps rewards from its aggressive cost-cutting. Its new Threads platform is taking off as it leverages its Instagram base. Plus, there is a chance Meta could stir up some excitement about its AI prospects amid reports it is preparing to launch a commercial version of its own AI model that can create text, imagery and code. A full preview will be released on our News & Analysis page later today. Meta shares could be influenced beforehand by results out from its Big Tech rivals and Snap.

Spotify is down 7.3% and at a six-week low after adding more users than anticipated in the latest quarter. It had 551 million users at the end of June, ahead of the 526.8 million forecast by analysts, with premium subscribers that generate the bulk of its revenue rising 17% to 220 million and also coming in ahead of the 216.6 million estimate. However, revenue of EUR3.18 billion came in just short of the EUR3.21 billion expected, which may raise questions about revenue. Notably, Spotify introduced its first price increase for premium subscribers just this week. Its outlook for subscriber growth in the current quarter was also rosier than anticipated.

Visa is up 0.1% ahead of results out after markets close today. The determination of consumers to keep travelling regardless of the economic climate should keep cross-border transactions elevated, countering the cooling spending in the US. Visa is expected to report a 10.8% year-on-year rise in revenue to $8.1 billion in the third quarter, which would mark a new record, and adjusted EPS is forecast to rise 6.7% to $2.11. Payment volumes are set to grow 7%. Notably, Mastercard is expected to deliver faster growth across all three metrics when it reports results later this week and is trading marginally higher before the bell today.

NVIDIA is up 0.8% at $449.70, with the stock continuing to rally after Mizuho bumped up its target price to $530 yesterday and said the chipmaker could unlock $300 billion in AI-related revenue by 2027! Analyst Vijay Rakesh said NVIDIA is ‘dominating’ the market for AI servers and that he expects it to maintain a significant slice of the market even as competition catches up. The broker said NVIDIA could earn $25 billion to $30 billion in AI revenue this year.

Tesla is up 1.5%. The electric carmaker revealed in a regulatory filing yesterday that it sold $7.9 billion worth of vehicles outside its two biggest markets in the US and China during the second quarter of 2023, up from just $3.5 billion the year before to show how its international expansion is gaining traction. That means it made over 31.5% of its sales outside of those two markets in the period, up from just 20.7% a year ago. That revelation comes as Indonesia’s minister for coordinating investment and maritime affairs said he plans to meet CEO Elon Musk on August 3, just after it finalises the incentives it will offer to the electric vehicle industry.

Smaller EV maker Nikola is being heavily traded once again this morning and is down 0.4% this morning. The company plunged yesterday after a truck that caught fire back in June reignited over the weekend. The truck remained at its headquarters for monitoring following the initial fire on June 23.

General Motors is up 1.8% after sales beat expectations in the latest quarter and allowed it to raise expectations for the full year. The automaker said revenue jumped to $44.7 billion to beat the $42.6 billion forecast while adjusted Ebit of $3.2 billion met expectations. General Motors said it is now expecting adjusted Ebit of $12 billion to $14 billion in 2023, up from its previous range of $11 billion to $13 billion. It also upped its cashflow guidance. The raised outlook comes as General Motors cuts investment and keeps lowering costs as it tries to refocus on profitability, which is also being aided by stronger demand and higher prices than General Motors thought it could achieve.

General Electric is up 4.5% and at levels not seen since the start of 2018! The company raised its full year outlook as it banks on reaping rewards from buoyant demand for air travel, which should aide demand for spare parts and servicing. The company is now aiming for adjusted EPS of $2.10 to $2.30 per share this year, a significant hike from its previous range of $1.70 to $2.00. That came as adjusted EPS of $0.68in the latest quarter smashed the $0.46 forecast from Wall Street.

3M is up 2.3% and at its highest level in over three months despite sinking to an almighty loss in the latest quarter because of the cost of legal claims over so-called ‘forever chemicals’ polluting water systems. The firm said it made a loss per share of $12.35 in the latest quarter compared to a $0.14 profit the year before. The company was hit by a $10.3 billion settlement over the impact of its chemicals on water systems last month. Adjusted EPS that stripped out that hit came in at $2.17 compared to $2.45 the year before as sales declined over 4%. Still, 3M raised its full year outlook because of its ‘operational execution and cost discipline’. It is now targeting annual adjusted EPS of $8.60 to $9.10 compared to its original goal of $8.50 to $9.00.

UPS is up 0.2% as it prepares to resume talks with the Teamsters union that represents over 300,000 of its workers today in the hope of striking a new deal before the existing one runs out at the end of this month. This will mark the first talks since they broke down earlier this month.

AMC Entertainment shares remain volatile, with the stock down 7.7% after popping 33% yesterday. Meanwhile, its APE preferred shares are up 3.3% after losing ground yesterday. The sharp moves are in response to a Delaware court judge blocking the company’s proposed deal that would have seen AMC pay holders of ordinary shares in return for approval for its plans to convert APE shares into ordinary stock and potentially dilute existing shareholders, scuppering the hopes of those playing the arbitrage bet. The judge said it was unfair because it would settle future legal claims from preferred shareholders, some of which were not included in the lawsuit. AMC has now refiled the settlement so it would only waive the rights of those involved in the lawsuit to try to address the judge’s concerns. AMC has said getting this sorted is ‘critical’ and warned that the ‘risk of financial collapse is not whimsical’.

Sirius XM Holdings is flat today after freefalling following last week’s surge, when a short-squeeze resulted in an explosion in trading volumes.

Carvana is up 0.5% at $46.45. Stephens upped its target price on the used car retailer to $42 from $9 this morning as it gained confidence it can make a comeback after positing surprise positive adjusted Ebitda and striking a deal to restructure its debt.

Coinbase is up 1% while Marathon Digital and Riot Platforms are up 0.5% to 0.9%. Bitcoin slumped to a one-month low yesterday and is struggling to recoup ground today, trading at around $29,150.