Reddit Stocks: What meme stocks are trending today? – September 15, 2023

US futures

• Dow Jones Industrial Average is up 0.2%
• S&P 500 is up 0.1%
• Nasdaq 100 is down 0.1%

US futures are mixed today. Stocks are finding support from yesterday’s flurry of economic data that pointed to a resilient US economy without stoking fears about further interest rate increases, although tech stocks are suffering after reports surfaced that semiconductor giant TSMC is delaying purchases of new high-end chipmaking equipment because of its cautious stance on demand.

The economic calendar this afternoon is headlined by industrial production figures and the preliminary Michigan consumer sentiment reading.

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. Arm
2. Tesla
3. NVIDIA
4. Carvana
5. C3.ai
6. Apple
7. Adobe
8. Netflix
9. AMC Entertainment
10. Advanced Micro Devices

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. Iovance Biotherapeutics
3. Tesla
4. Ford
5. Radius Global Infrastructure I
6. Better Home & Finance
7. Tilray
8. Unity Software
9. Apple
10. AMC Entertainment

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

Let’s have a look at the top stocks to watch today.

Arm stock keeps climbing after IPO

British semiconductor firm Arm closed up 25% on the first day of trading after completing its blockbuster IPO amid strong demand for its stock and is trading up another 1% before the bell today.

That means Arm’s valuation has jumped from $54.5 billion at the IPO to around $61 billion in premarket trade today. The positive start will raise hopes that the IPO market will be revived following a two-year drought, with others like Instacart, Klaviyo and Birkenstock also preparing listings and many more in the pipeline. Notably, Instacart appears to have become more confident as a result after lifting its IPO price range to $28 to $30 from its previous range of $26 to $28, according to reports, which could give the ecommerce giant a valuation of around $10 billion.

However, that valuation means Arm’s price-to-earnings ratio has inflated to over 123x based on its profits in the most recent financial year – over four times the average across the tech-heavy Nasdaq 100! You can find out why Arm has earned such a bumper premium and my analysis on whether it will be able to keep it in Can Arm Stock Maintain or Grow its Premium Valuation?

Notably, Japanese firm Softbank, which still ultimately controls Arm after the listing with a stake of around 90%, didn’t gain ground despite the bumper Arm valuation.

Arm IPO fails to boost US chipmakers

Arm may have been welcomed back by the markets but the successful debut didn’t translate to a big boost for the broader semiconductor space, with the Philadelphia Semiconductor Index edging up just 0.7% yesterday. Big names NVIDIA and AMD are trading 0.2% to 0.3% lower before the bell today.

TSMC delays delivery of new chipmaking tools

Sentiment among chip stocks is being hurt today after TSMC, which is seeing its shares on the NYSE fall 0.5% in premarket trade, on news that it has told suppliers to delay delivering new high-end chipmaking equipment as it remains worried about future demand, according to unnamed sources speaking to Reuters.

A cautious outlook for demand for chips has prompted it to tell companies like Dutch outfit ASML, which is down 3%, to push back delivery timelines but the sources said this is expected to be a short-term issue. That comes after TSMC said back in July that it was grappling with the lacklustre recovery in China and softer demand.

US automakers hit by UAW strike

Ford, General Motors and Stellantis are down up to 0.8% before the bell today after members of the United Auto Workers started to strike because they failed to agree a new deal for members before the deadline.

Workers have now walked out of at least one factory at each company, stoking fears that production of new vehicles could be disrupted. The union and automakers have struggled to find an agreement as workers push for inflation-busting wage increases while carmakers try to limit costs.

Carvana stocks jumps thanks to UAW strike

Meanwhile, Carvana shares are up 1.5% and set to open at 15-month highs after booking its biggest daily gain in two months yesterday, as investors bet that used car retailers will benefit if strike action hits output of new cars.

Is China’s economy finally gaining momentum?

Chinese stocks listed on American exchanges such as Alibaba, Baidu, Pinduoduo and JD.com are trading higher, up to 0.6%, after the latest economic data out of China came in stronger than expected to revive hopes that the economy is gaining traction. Industrial production and retail sales both jumped in August while unemployment dipped.

Lockheed and Northrop Grumman hit by China sanctions

Lockheed Martin is flat and Northrop Grumman is up 0.2% after the two defence giants were hit by new sanctions by China after supplying weapons to Taiwan.

The Chinese foreign ministry outlined the sanctions  and called on the US to “abide by the one-China principle” and cease all military liasons with Taiwan or risk “a resolute and forceful retaliation by the Chinese side,” said ministry spokesperson Mao Ning.

High bar sees Adobe stock fall despite record sales

Adobe shares are down 3.7% at $531.97 despite delivering record sales in the latest quarter and beating expectations, with its outlook failing to impress and possibly leaving investors disappointed AI isn’t providing a bigger tailwind yet.

The software giant has risen almost 64% since the start of 2023 and is one of the best performers in the Nasdaq 100 as a result, which set expectations high ahead of the update. Revenue grew 10% from last year to $4.89 billion to hit a new record high and adjusted EPS jumped 20% to $4.09, coming in ahead of the $4.86 billion in sales and $3.98 in earnings forecast by analysts.

Adobe said it is targeting sales of $4.98 billion to $5.03 billion in the fourth quarter, which was aligned with the $5.00 billion forecast but potentially disappointing for those investors that were hoping it would outline higher targets thanks to the influx of work from AI.

Adobe said it is “unleashing a new era of AI-enhanced creativity around the world”. Analysts also grew more optimistic about how AI, as well as higher prices coming into force in November, can accelerate Adobe’s sales growth going forward. Morgan Stanley said the prospects from generative AI are “impressive” while RBC applauded Adobe for finding a balance between new AI opportunities while growing margins and delivering profitable growth. Several analyst also flagged that its outlook may be conservative, showing some believe it could deliver another beat in the fourth quarter.

Among the brokers to raise their target price this morning was Goldman Sachs to $625, Piper Sandler to $640, Barclays to $640 and BofA Global Research to $660.

Disney gets $10 billion offer for TV networks

Disney shares are up 0.9% after receiving a $10 billion bid for its ABC TV network, FX and National Geographic cable channels as well as local stations from Byron Allen, according to one of his spokespeople.

Disney has openly said it is willing to sell its TV networks and is thought to have also held preliminary talks about selling ABC to Nexstar Media, according to a Reuters report yesterday.

Disney shares have gained ground for five consecutive sessions since hitting their lowest level since 2014, as the House of Mouse struggles to turn its fortunes around.

Apple moves to address radiation issues in France

Apple shares are up 0.2% this morning. The stock hit a four-week low yesterday and tested the support zone that has been in play for several months before bouncing back amid a broader rally in equity markets.

The company said it plans to update software on iPhone 12s in France in an effort to resolve a dispute after French regulators banned sales of the device after tests showed it was emitting radiation levels above allowed thresholds. The Agence Nationale des Fréquences demanded Apple fix the issue through a software update, which Apple has agreed to do despite denying claims that the handset isn’t safe.

Amazon drops from 17-month highs

Amazon shares are down 0.9% after hitting 17-month highs yesterday.

The company appointed former Intuit CEO Brad Smith to its board this week, which has stirred discussions about Amazon’s ongoing push into healthcare, while Bloomberg reported that Amazon is making a big effort to fill the void in the logistics market following a retreat from Shopify earlier this year.

Tesla stock hits 2-month high

Tesla shares are trading 0.7% higher and set to open at their highest level in almost two months after the electric vehicle maker found new momentum from its AI prospects this week.

The company is on course to book its biggest weekly gain in three months! The next big test could come at around $285, which would see the stock test the falling trendline that can be traced back to the all-time highs we saw back in November 2021! On the downside, we may see some support emerge at $258 considering the 20-day moving average and 61.8% retracement have converged at this price, which is also aligned with the ceiling that limited the stock’s gains in early September.

The stock has found renewed momentum around its AI prospects and the opportunities that could stem from its self-driving technology, which has pushed the share price higher and widened the gulf as earnings estimates continue to fall as Tesla sacrifices profitability for volumes.

Nikola hits September-high on hydrogen trucks

Nikola shares are up almost 15% and at their highest level in September, building on yesterday when it booked its biggest daily in two months after popping 32% and rebounding from recent lows. The company has been hit recently following fires involving its battery-powered trucks, but has found some much-needed momentum after CEO Steve Girsky said the company will begin selling its hydrogen fuel-cell trucks in late September or early October.

Netflix stock to suffer worst week in 11 months

Netflix shares are up 0.4% after slumping to one-month lows yesterday, with the streaming giant on course to suffer its worst weekly loss since October 2022!

The selloff, with the stock down 9.7% since last week’s close, is down to concerns over profitability. Chief financial officer Spencer Neumann spoke at a Bank of America conference this week when he reiterated sales are set to be “flat to slightly down” in the third quarter and that operating margins will be between 18% to 20%, falling short of the 22% expected by Wall Street.

The main concern is the amount of revenue Netflix is earning from each user. For example, subscriber growth is being led in Asia, but this is also where it squeezes out the least revenue per user. Plus, it said some are still shifting to cheaper subscriptions as it continues to crackdown on password sharing, while its new advertising-supported tier is still not generating significant financial rewards.

Moderna’s new Covid-19 vaccine approved in UK

Moderna shares are up 0.7% after UK regulators gave the green light for its updated Covid-19 vaccine that is targeting new variants. That follows on from European regulators giving their approval to the new jab.

The move means the UK now has two approved vaccines targeting the XBB.1.5 subvariant, with the other being made by Pfizer.

Moderna shares have unsuccessfully tested the falling trendline that can be traced back to May during the past two sessions, suggesting it has found some fierce resistance at current levels.

Unity Software jumps from September-lows on upgrade

Unity Software is up 2.4% at $36.55 and rebounding from September-lows after being upgraded to Buy from Neutral by BofA, which said concerns that new price hikes will cause customers to leave will be countered by the “incremental monetisation opportunity” and that other headwinds around topline growth “are well understood” and reflected in Unity’s valuation.

AMC investors divided over dilution and liquidity

AMC Entertainment shares are down 0.1% before the bell. The cinema chain initially gained ground yesterday after it raised $325.5 million in new equity, which improved liquidity and helped cool any fears about its liquidity and debt-ladened balance sheet as it continues its prolonged recovery from the pandemic.

However, the stock gave back all those gains and ended up closing down over 1%, below the $8.92 price it sold the most recent batch of shares for, as investors weighed-up the fact they have been diluted even further following the recent APE conversion that significantly watered-down their interests.

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