Reddit Stocks: What meme stocks are trending today? – August 1, 2023

US futures fall

• Dow Jones Industrial Average is down 0.1%
• S&P 500 is down 0.3%
• Nasdaq 100 is down 0.4%

US futures are trading lower today as the recently winning streak that has left all three major indices lingering near recent highs takes a breather.

Another wave of earnings came out this morning and more will follow after the close today, headlined by chipmaker AMD. Meanwhile, markets have become increasingly confident that we are approaching peak interest rates and that the Federal Reserve can deliver a soft landing, but they are awaiting more economic data to gauge whether both theories are true. Today, we have the ISM manufacturing survey and JOLTs job openings, which will set the stage for the more closely-watched non-farm payrolls this Friday.

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. Palantir
2. SoFi
3. Advanced Micro Devices
4. C3.ai
5. Visa
6. Apple
7. NVIDIA
8. Disney
9. NIO
10. Tesla

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. Nikola
2. Uber
3. Palantir
4. IonQ
5. SoFi
6. Rivian
7. Lucid Group
8. Tilray
9. Lilium
10. Tesla

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

Caterpillar is up 0.3% and at fresh all-time highs after beating expectations in the latest quarter. The manufacturer of industrial equipment – often seen as a bellwether for the broader economy – reported adjusted EPS of $5.55 in the latest quarter, well ahead of the $4.54 forecast by Wall Street. It said revenue will continue to grow in the second half compared to last year and said margins should be toward the top end of expectations over the full year.

Merck is up 2.2% today after performing better than anticipated in the latest quarter, prompting it to raise its full year outlook. The pharmaceutical giant reported sales of $15.0 billion in the quarter, up from $14.6 billion the year before and ahead of the $14.4 billion forecast. The beat was delivered by its cancer immunotherapy drug Keytruda and its HPV vaccine named Gardasil, countering the drop in demand for its Covid-19 drug. Keytruda sales are being driven in North America while growth in Gardasil sales was aided by China. Merck reported an adjusted loss per share of $2.06, solely because of a hefty charge related to its acquisition of Prometheus Biosciences, but this was smaller than what analysts predicted. Merck lifted its annual sales and EPS view for the rest of the year.

Pfizer is down 1.1% and on the cusp of testing 2023-lows after revenue in the latest quarter fell short of expectations as demand for its Covid-19 vaccine continues to wane. The pharmaceutical giant said revenue plunged 54% from last year to $12.7 billion, following a 53% drop in sales of its Covid-19 drugs named Paxlovid and Comirnaty. That was below the $13.3 billion forecast by analysts. Stripping out its Covid-19 products, revenue was up around 5% from the year before. Adjusted EPS in the quarter was down 67% to $0.67. Pfizer narrowed its revenue guidance for the year and reiterated its earnings outlook.

Meanwhile, Uber is up 4.6% and at a one-year high after delivering its first ever operating profit of $326 million in the latest quarter. The ride-share and food delivery firm has reported after tax profits before thanks to gains on its investments and disposals, but the operating profit is a landmark as it shows its day-to-day activities are profitable. Adjusted Ebitda jumped to $916 million and that came in well ahead of the $844.5 million forecast. Its guidance for adjusted Ebitda of $975 million to $1.03 billion in the third quarter was also rosier than the $919 million pencilled-in by analysts. We also heard reports from Electrek yesterday that suggested Uber is buying 100 Model Ys from Tesla to deploy across Tokyo in Japan.

Advanced Micro Devices is trading marginally higher today ahead of results out after markets close. The semiconductor stock is expected to report an 18.8% fall in revenue to $5.3 billion to mark the second consecutive quarter of lower sales. Weak demand for gaming and other hardware remains the key problem but markets are hopeful we could see a recovery toward the end of this year and into 2024. The bigger concern may be a slip in datacentre chips, which is expected to see a rare slip in sales of 5.8% this quarter. Adjusted EPS at the bottom-line is set to fall for a fourth consecutive quarter, this time by 45% to $0.57. However, earnings should return to growth in the second half as comparatives normalise. NVIDIA has stolen all the headlines as the eruption of AI grabs the imagination of the markets in 2023, leaving AMD and others in the dust. However, AI is too large a breakthrough to be monopolised by just one business and eyes are on how the rest of semiconductor space can catch-up. Commentary around AI will be key given the rest of AMD’s business remains under pressure.

One of the key things to watch out for in AMD’s results is whether it has been able to retain the market share gains it has made in recent years as NVIDIA gobbles up AI-related contracts and after its biggest rival when it comes to computer processes, Intel, said last week that it is starting to win orders again after ceding share. Their shares are likely to be influenced by the AMD results today, with Intel down 0.5% after briefly hitting a one-year high yesterday and NVIDIA is down 0.4%.

Apple is down 0.2% at $196 after TD Cowen raised its target price on the stock to $220 from $195 this morning, becoming the latest broker to suggest there is still significant upside potential as the share price continues to linger around all-time highs! Apple reports results on Thursday, when Wall Street believes Apple will report a 1.7% year-on-year fall in sales and deliver a tepid 0.3% increase in EPS. Demand for devices is still falling and the quarter is usually seasonally weak as we await for the next iPhone model to be launched this September. Meanwhile, Foxconn is on the radar after Bloomberg reported that the company, also known as Hon Hai Precision and Apple’s largest supplier, plans to increase investments in southern India by $1.2 billion to build two new factories there as part of its expansion to reduce reliance on China.

Disney is up 0.4% and at a two-week high. The House of Mouse is grabbing attention after the Financial Times reported that CEO Bob Iger has brought back two former executives – Kevin Mayer and Tom Staggs – as advisers to help build a strategy of what to do with its TV networks, including ESPN. The reports suggest they will examine the strategic options for ESPN, having already said it wants to find a partner to help drive it forward.

Meta is trading marginally lower this morning after the Financial Times reported the social media giant is preparing to launch new AI-powered chatbots that will have different personalities to interact with users as soon as this September. They are designed to provide a new search function and offer recommendations to users.

Amazon is trading marginally lower after announcing it will invest around $7.2 billion in its cloud-computing datacentres in Israel through to 2037 as it introduced its services in the country. Its entry into Israel, making it the 32^nd country it has entered. Amazon reports results on Thursday when markets forecast we will see a 8.5% year-on-year rise in revenue and a huge improvement in profits as comparatives become easier. The main focus will be on Amazon Web Services, which generates the bulk of profits. Cloud revenue is expected to grow 10% from last year to $21.7 billion, marking the sixth consecutive quarter of slower growth as businesses scale-back their IT spending, with markets not expecting this to start growing again until late 2023. There are hopes that Amazon can counter softer enterprise spending with new AI demand, although this may take time. However, markets will also be looking at how its ecommerce business is performing as they focus on how the US and global economy is faring and how consumer spending is faring.

Tesla is down 0.5% before the bell. The company is thought to be asking for almost $100 million from the US government in return for building nine charging stations that will be able to serve electric semi-trucks along a route between the southern border of Texas to northern California, according to Bloomberg. The report, citing emails, said Tesla is proposing building eight charging stations at each stop to serve its own Semi and another four that could serve models made by rivals.

Nikola is up 5.6% and at 2023-highs after JB Hunt agreed to buy 13 of its electric trucks yesterday. The initial order is for 10 battery-electric trucks and three powered by a hydrogen fuel cell. The first trucks will be delivered this month.

Rivian is down 1.3% today at $27.10 after Cantor Fitzgerald downgraded the electric vehicle maker to Neutral from Overweight as the recent rally pushed its valuation too high and because of intensifying competition within the market. It raised its price target to $29 from $27.

Exxon Mobil is down 0.1% today and falling from a one-month high hit yesterday, when we heard reports from Blomberg that it was in talks with Tesla, Ford and Volkswagen about striking a potential deal to supply them with the key lithium they need for electric vehicle batteries.

Marathon Petroleum is up 0.7% today after following its peers by reporting a sharp drop in earnings in the second quarter as refining margins contracted. EPS of $5.32 per share plunged from $10.95 the year before, but came in comfortably ahead of the $4.58 pencilled-in by analysts.

NIO is down 2% and falling from a 10-month high after the Chinese electric vehicle maker revealed it delivered 20,462 vehicles in July, more than double what it shifted the year before and marking a significant uplift from the 10,707 vehicles delivered the month before. That means it has now shipped just over 75,000 vehicles in total since the start of 2023. The significant month-on-month uptick in deliveries is down to the new ES6. Over 10,000 ES6s were delivered in July alone after it was launched in late May, and today’s update will reinforce hopes that deliveries will ramp-up as it releases new models.

Palantir is down 0.6% as the AI-induced rally that sent the stock to fresh 20-month highs stalls. The recent rally found renewed momentum after a note out last week from Wedbush, which initiated coverage on the company with an Outperform rating as it predicted Palantir will become a ‘major player in the AI revolution over the next decade’. The company announced it has won a contract to provide its software platform to help the US Department of Defense improve coordination with commercial spectrum licenses.

SoFi is down 3.1% at $11.10 as its valuation remains lofty compared to broker expectations, despite several brokers raising their target price on the stock this morning, including Credit Suisse to $9.50, Stephens to $12, Jefferies to $15, and BofA Global Research to $11.50. Meanwhile, KBW downgraded the fintech firm to Underperform despite raising its target price to $7.50, with the recent rally having pushed its valuation higher. BTIG also cut its target price this morning to $13 from $14.

Virgin Galactic is down 2.6% and falling from one-month highs ahead of results out after markets close today. This will be the first set of results since it launched commercial operations after completing its inaugural space flight in late June, with the next one pencilled-in for later this year. Still, the company is burning through cash and analysts believe its operating outflow will come in at $130 million during the quarter, which will reduce its cash position. Free cashflow is forecast to see an outturn of $137 million. Its quarterly adjusted Ebitda loss is forecast to come in at $134 million.

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