Reddit has become a hub for social-media driven traders and investors that have proven their ability to move the markets, injecting huge volatility into stocks like GameStop and AMC. But what stocks are grabbing attention on Reddit today?
Top Reddit stocks to watch
Below is a list of the top 10 most mentioned US stocks on the WallStreetBets thread on Reddit over the last 24 hours on February 8, 2023, according to data from Quiver Quantitative. Exchange-Traded Funds (ETFs) and other instruments have been excluded.
- C3.ai
- NVIDIA
- Tesla
- Microsoft
- Bed Bath & Beyond
- Amazon
- Jacob’s Solutions
- Meta
- Apple
- Enphase Energy
US futures are trading lower today. The Dow Jones Industrial Average is down 0.2% while the S&P 500 is down 0.3%. The tech-heavy Nasdaq 100 is trading 0.1% lower. Markets are digesting comments from Fed chair Jerome Powell yesterday, when he said he expects inflation to ease significantly in 2023 while warning that the terminal rate of interest rates may need to climb higher than what markets have priced-in following data last week that showed the jobs market remains extremely strong.
Microsoft is up 1.8% this morning at $272.30 and set to open at its highest level since late August after unveiling its own plans to unleash artificial intelligence to improve its services as the race for AI supremacy kicks off. It is upping its investment in OpenAI, the company behind the hugely popular AI-driven chatbot ChatGPT and using its products to thrust its Bing search engine into the modern era and improve its web browser. ‘This technology is going to reshape pretty much every software category,’ said CEO Satya Nadella. Bing will be powered using OpenAI’s open language model, which is thought to be more advanced than the one running ChatGPT. The new Bing is now available as a preview that allows users to submit a limited number of questions and there is a waitlist to gain full access, with a view of opening it up to millions of people in the coming weeks. The update was welcomed by analysts, with some raising their price target on the stock this morning including Piper Sandler to $290 from $247, Jefferies to $310 from $275, DA Davidson to $325 from $280, JPMorgan to $305 from $265 and Oppenheimer to $280 from $265.
That unveiling came just one day after rival Alphabet, which is down 0.7% this morning, said it will launch own chatbot service named Bard and allow AI to drive its core search engine. The company, which currently has a monopoly over search, has been under pressure to introduce its own AI products amid address fears that new services like the hugely successful ChatGPT could leapfrog its existing services. Bard is being introduced to select users before being publicly released in the coming weeks, when it will face its first test as markets weigh up how it stacks up against ChatGPT and other services. ‘Bard seeks to combine the breadth of the world’s knowledge with the power, intelligence and creativity of our AI,’ said CEO Sundar Pichai. Bard is underpinned by Google’s AI named LaMDA, which the company says requires less computing power that should allow it to serve more users. ChatGPT has been inundated with requests since launch and has had to turn away demand.
Another stock that has been gaining ground thanks to the surge in interest in artificial intelligence is C3.ai, which is up 1.9% in premarket trade. The company lost ground for the first time in six sessions yesterday but has more than doubled in value since the start of 2023. The company recently unveiled a suite of generative AI products that can ‘rapidly locate, retrieve, and present all relevant data across the entire corpus of an enterprise’s information systems.’ The company said the new suite ‘integrates the latest AI capabilities from organizations such as Open AI, Google, and academia, and the most advanced models, such as ChatGPT and GPT-3 into C3 AI’s enterprise AI products.’ The company plans to release third quarter earnings on January 31.
NVIDIA is up 1% and on course to open at its highest level since April as the chipmaker gains ground on hopes it too can be a major beneficiary of any offtake in AI as its chips are used to provide the computing power needed for the technology. Analysts at Bloomberg Intelligence said yesterday that NVIDIA, alongside other firms including Arista, Cisco and Juniper, could all reap rewards as Big Tech ramps-up investment in AI and machine learning. It says that AI networking is forecast to be a $8.5 billion market by 2027 compared to just $1.6 billion in 2022.
Apple shares are down 0.7% before the bell, which will send the stock down from three-month highs. The iPhone maker is reported to have rolled-out its eagerly awaited buy now, pay later service to its tens of thousands of retail employees as a precursor to a public launch. The service is named Apple Pay Later and allows shoppers to split transactions into monthly instalments and represents a major push further into financial services. Meanwhile, local media in South Korea said the company will launch Apple Pay in the country, although a precise timeframe was not provided.
Meta is down 0.6% this morning after closing at its highest level in over seven months yesterday. The social media giant is reported to have told many managers and directors to transition to new roles as individual contributors or risk losing their jobs as it tries to restructure management and become a more efficient business. Bloomberg, citing unnamed sources, said this will be communicated by high-level managers over the coming weeks. Meta has already said it is cutting 13% of its workforce and has named 2023 as the ‘Year of Efficiency’ as it tries to protect profitability amid a slump in growth. Elsewhere, Democrat senator Mark Warner and Republic Marco Rubio have sent a letter to Meta voicing their concerns over growing numbers of developers in countries such as China, Russia, Iran and North Korea and the idea that they could have access to sensitive user data.
Meanwhile, US president Joe Biden is calling for new legislation to rein-in the power of Big Tech after urging congress to pass bipartisan legislation that aims to ‘strengthen antitrust enforcement and prevent big online platforms from giving their own products an unfair advantage’.
CVS Health is up 0.5% after the company beat expectations in the latest quarter. The company reported adjusted EPS of $1.99, ahead of the $1.92 forecast. A fall in admissions due to Covid-19 helped lower medical costs at its insurance business. The company reiterated its full year outlook. CVS also confirmed reports it has made a $10.6 billion offer for Oak Street Health, which is up 3.9% today at $35 compared to the offer price of $39.
Coty is down 0.5% despite raising its guidance for the full year. The company said price increases twinned with resilient demand for cosmetics had increased its confidence even if the wider macro environment remains challenging. It said it now expects annual adjusted EPS of $0.35 to $0.36, up from its previous range of $0.32 to $0.33. That came as Coty reported a 3% fall in quarterly revenue to $1.52 billion, which was just ahead of estimates. The stock has ripped over 58% higher in the past three months.
Chipotle is down over 5% and falling from five-month highs after growth failed to impress the markets in the latest quarter. Comparable sales at its restaurants rose 5.6% from last year, but this was much slower than the 7.1% pencilled-in by Wall Street. EPS of $8.29 also fell short of the $8.90 forecast. The firm said it is attracting more wealthier customers as it refuses to ‘chase people with discounts’. It said traffic had improved in January and said comparable sales should grow by high single-digits in the current quarter.
Chemicals giant DuPont is trading marginally lower this morning after hitting 11-month highs yesterday. The firm said it expects the reopening of China to provide a boost in the second half of 2023. The firm said ‘China coming back on its own from … this artificial Covid thing alone is going to help with demand’. China accounts for around one-fifth of its sales. However, DuPont’s outlook was disappointing. It said revenue will be between $12.3 billion to $12.9 billion this year, just shy of the $12.91 billion forecast. Guidance for annual adjusted EPS fared better at $3.50 to $4.00 compared to the $3.86 estimate.
Disney is up 0.3% before the bell ahead of first quarter earnings out after markets close today. It will be the first set of results since Bob Iger made a surprise return as chief executive with the board hoping he can once again revive the company’s growth prospects. We should see Iger outline his vision for the House of Mouse, which will be key as activist investor Nelson Peltz continues to circle and push for a board seat. Disney’s theme parks and resorts should deliver their best results since the start of the pandemic, but all eyes will be on its streaming services as pressure builds to make it profitable. You can find out more, including the numbers to look out for today, in our Disney Q1 Earnings Preview.
Uber is up 5.5% and poised to open at its highest level since April ahead of quarterly results out after the close. Uber needs to convince investors that demand can hold up in 2023, especially as fears of recession build. Wall Street expects gross bookings to climb 19% from last year to $30.7 billion. While strong, that would mark the sixth consecutive quarter of slower growth as food delivery demand continues to ease after exploding during the pandemic and the recovery seen in ride-hailing has begun to moderate. Even its freight business, which has been delivering year-on-year sales growth of 200% to 400% over the past year, will see that grind to 55% in the fourth quarter. Revenue is forecast to rise 47% to $8.5 billion and adjusted Ebitda is expected to come in at $618.6 million, marking a new record as profitability continues to improve. However, tighter margins in its food delivery and freight divisions could weigh on earnings. The outlook for the first quarter of 2023 will be influential, with markets looking for gross bookings of $31.8 billion and adjusted Ebitda of $609.6 million.
Tesla is down 0.2% and falling from its highest level in over three months. CEO Elon Musk has announced that it will present the third phase of his ‘master plan’ at an investor day on March 1. The original plan was presented back in 2006 and we are still in the second phase, and the third is expected to include updates on its next-generation platform for its electric vehicles and plans to make vehicles more affordable. Meanwhile, Tesla sold 66,051 vehicles that were made in China in January, according to the China Passenger Car Association. That is up over 18% from December, when production was temporarily halted. It comprised of 26,843 cars sold domestically, and this increased its market share to 12.5% in January from 9.5% the month before, according to Reuters. Notably, the increase in sales came amid a broader 38% slump in the market.
Delta Air Lines is up 0.4% this morning after announcing it will raise the pay for its employees by 5% from the start of April as it tries to retain staff and attract new ones. This applies to ground workers and flight attendants across the world.
Online marketplace eBay is trading marginally higher in premarket trade after announcing it plans to lay off 500 workers, representing about 4% of its global workforce. That makes it the latest tech firm to cut jobs in response to the tougher environment.
Bed Bath & Beyond is up 2.3% today and is likely to remain volatile. The troubled homeware retailer raised $225 million in an equity offering yesterday and could receive up to another $800 million if warrants are exercised, providing vital funds needed to stave-off bankruptcy and give it more time to turn the business around. The company had warned it would file for bankruptcy without the injection of cash, with Hudson Bay Capital reported to be the anchor investor. The money will give it some time to revive its fortunes, although how long will depend on how much it can reduce its cash burn and improve sales. With this in mind, Bed Bath & Beyond has a lot of work to do considering it burnt through over $300 million in the last quarter alone. The offering will be highly dilutive to shareholders and there are still major questions hanging over the company’s future. The clock has been ticking for Bed Bath & Beyond to raise some cash but securing the money will only reset the clock. With that in mind, and taking a more positive view, this could give it more time to minimise the damage and try to find another solution to its problems – like a takeover or asset sale.
Enphase Energy is up 9.4% at $250 and set to open at a three-week high after beating expectations in the latest quarter. The solar energy outfit posted record quarterly revenue of $724.7 million. That was up 14% from the year before and beat the $706.5 million forecast. Adjusted EPS climbed to $1.51 from $1.25 last year, which was also ahead of expectations. Enphase’s outlook was also rosier than markets had anticipated after it said revenue would come in between $700 million to $740 million in the first quarter of 2023, ahead of the $690.5 million pencilled-in by Wall Street. Brokers largely welcomed the results. Truist Securities said the rosier outlook was impressive considering the macro headwinds. JPMorgan said Europe is driving the company at the moment but warned visibility in the US remains clouded. Cowen & Co raised its target price to $341 from $335 this morning, Barclays upped its view to $257 from $251 and Susquehanna cut its target to $275 from $365.
Jacob’s Solutions is in play after its results were released yesterday. Revenue rose 12.4% from the year before in the first quarter to $3.8 billion and adjusted EPS was up 7% at $1.67. Its backlog also grew, albeit by a tepid 1%, to $28.3 billion as gains in People & Places and PA Consulting countered a steep drop in demand for Critical Mission Solutions. Cashflow was also strong, with 100% of operating cashflow currently being converted. It reiterated its full year outlook.
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