Reddit Stocks: What meme stocks are trending today? – October 27, 2023

US futures

• Dow Jones Industrial Average is down 0.3%
• S&P 500 is up 0.1%
• Nasdaq 100 is up 0.6%

US futures are mixed this morning, with tech stocks gaining ground as US treasury yields ease, ahead of key inflation data out this morning. The economic calendar today is headlined by US PCE out shortly, followed by Michigan consumer sentiment and a speech from the Federal Reserve’s Michael Barr.

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. Amazon
2. NVIDIA
3. Visa
4. Meta
5. Tesla
6. C3.ai
7. Intel
8. Apple
9. Microsoft
10. Enphase Energy

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. Amazon
2. Nikola
3. Tesla
4. Intel
5. Palantir
6. SoFi
7. Ford
8. IonQ
9. Enphase Energy
10. Stellantis

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.

Amazon rises as AWS growth stabilizes

Amazon is up 6.6% this morning and rebounding from five-month lows at $127.40 after beating expectations in the third quarter while its profit-driving cloud computing business appears to be stabilising after 18 months of the brakes coming down on growth.

Net sales rose 13% in the quarter to $143.1 billion, coming in ahead of the $141.6 billion forecast. Operating income soared to $11.2 billion from only $2.5 billion the year before and smashed the $7.7 billion forecast.

Results were flattered by weak comparatives but trends improved across the board. Amazon Web Services sales grew 12%, which was a tad below the previous quarter and forecasts. But CEO Andy Jassy said the business is stabilising, raising hopes that we have reached the bottom. Ecommerce was also stronger than expected and advertising also impressed.

Amazon’s outlook for the fourth quarter was just about enough to keep investors happy. It is targeting net sales of $160 billion to $167 billion, but Wall Street is looking for it to hit the very top-end of that range. It is eyeing $7.0 billion to $11.0 billion of operating profit, providing a rather wide range that compares to the $8.7 billion forecast by Wall Street.

Wall Street welcomed the results and are now expecting AWS growth to accelerate in 2024, boosted by growing demand for AI. Among those to raise their target price this morning included Telsey Advisory to $165, JPMorgan to $190, Barclays to $190, TD Cowen to $180 and Evercore ISI to $195.

Intel rises as turnaround efforts pay off

Intel shares are up 7.5% today and recovering from two-month lows after a rosy outlook impressed the markets and installed confidence that it is executing its turnaround plan and starting to reap rewards.

The chip firm said it is targeting $14.6 billion to $15.6 billion of sales and adjusted EPS of around $0.44. That was upbeat versus the $14.4 billion in sales and $0.31 in EPS predicted by analysts. That was accompanied by a big beat in the third quarter, when it reported $14.2 billion in sales and $0.41 in EPS compared to the $13.5 billion and $0.21 pencilled-in by analysts.

Intel is confident that it is over the worst of the slump in the PC market, although its data centre business continues to struggle as more spending shifts to more advanced AI chips from the likes of NVIDIA.

Wall Street was, generally speaking, receptive to the update but there were no big upgrades, apart from HSBC which moved it to Hold from Reduce. Target prices nudged slightly higher.

That is also helping provide support to other chipmakers, with NVIDIA up 1.5% and AMD up 2%.

Wall St bullish on Meta despite uncertain outlook

Meta shares are up 0.9% following the slump we saw yesterday when a warning that the outlook for 2024 is uncertain due to limited visibility on the economy and rising geopolitical tensions.

Brokers were largely impressed by the quarterly results this week, including its AI investments, improving engagement and the efficiencies driven through its aggressive cost-cutting.

Citigroup this morning became the latest broker to raise its target price in wake of the results to $425 from $385.

Microsoft gives back gains in wake of results

Microsoft shares are up 0.9% today at $330.90, largely where the share price stood before it released its quarterly results this week. The stock popped over 3% in wake of its update that showed its cloud-computing business is outpacing rivals and its diverse business model is paying-off but plunged 3.8% yesterday amid the broader selloff that hit tech stocks.

Microsoft’s cloud business grew much faster than rivals in the third quarter of 2023. Intelligent Cloud revenue grew 19% and its Azure unit grew at an even faster pace of 29%, far outpacing the 12% growth at larger rival AWS and coming in favourable versus the 22% delivered by smaller competitor Google Cloud. That has reinforced Microsoft as the early winner from AI.

Meanwhile, Alphabet is up 0.4% and rebounding from three-month lows after failing to impress this earnings season. This is set to be the worst week for the stock in about a year!

Apple stock hits 6-month low

Apple is down 0.1% and at its lowest level in almost six months as markets fret ahead of its quarterly results next week, when all eyes will be on how demand for its new iPhone 15 and array of other hardware is faring in a tough economic climate and its performance in China amid fears Huawei is gaining ground. Keep an eye on our News & Analysis page for an earnings preview next week.

Meanwhile, Masimo Corp is up over 10% after Apple was found to be infringing its patented technology in certain Apple Watch models, said the US International Trade Commission.

Exxon Mobil and Chevron miss forecasts

Exxon Mobil is trading marginally higher this morning. The oil giant missed expectations in the latest quarter, but impressed with strong cash generation and a dividend hike.

Adjusted EPS dropped to $2.27 from $4.45 the year before in the third quarter thanks to lower prices, although the bottom-line improved sequentially given the recent rise in oil. The company boosted its dividend more than anticipated to $0.95 from $0.91 and said it remains on course to buyback $17.5 billion worth of shares in 2023. Cash generation was strong, aided by faster than expected cost-cutting benefits.

The results come as Exxon Mobil embarks on two major acquisitions, one of Pioneer Natural Resources and the other of pipeline operator Denbury.

Fellow oil giant Chevron is down 2.4% after its earnings also came in lower than expected at $3.05 compared to the $3.71 forecast. The company, which is also pursuing a mega acquisition of Hess Corp, said it has returned a record amount to shareholders this year.

JPMorgan CEO to sell shares in 2024

JPMorgan is down 1% after announcing chief executive Jamie Dimon plans to sell some of its shares in the largest US bank next year.

Dimon and his family intend to sell 1 million of their 8.6 million shares in the bank, which said this is for “financial diversification and tax-planning purposes”. Dimon “continues to believe the company’s prospects are very strong,” JPMorgan added.

Ford hits 2023-lows as outlook is pulled

Ford is down 3.7% and at its lowest level in 2023 after withdrawing its full-year forecast as it calculates the cost implications of its recently-struck deal with the United Auto Workers union, which will significantly raise costs.

The automaker has become the first of the three major automakers that have been hit by weeks of strike action. Workers are now returning to Ford factories but the deal still needs to be ratified. Ford has agreed to a 25% pay rise for 57,000 workers for over four years. That is set to weigh on margins, and is also prompting it to slow its electric vehicle strategy.

Rival General Motors, which is down 0.3% this morning, also withdrew its guidance this week because of the uncertainty posed by strikes. The third automaker Stellantis, which is up 0.7% today, reports results next week.

Tesla reverses some price cuts in China

Tesla shares are up 1.5% and rebounding after closing at five-month lows yesterday as fears about softer demand and lower profitability continue to weigh on Tesla’s lofty valuation.

The electric vehicle maker has raised the price of its Model Y Performance in China by about $2,000, reversing price cuts that were made just months ago. The most-advanced model is now priced at CNY363,900, up from CNY349,900. That followed on from the cut of the same value being introduced only in August.

Enphase Energy slumps to 3-year lows

Enphase Energy is down 18% and at its lowest level since September 2020 after becoming the latest casualty from the solar industry after posting a weak outlook, applying further pressure on other solar stocks.

Enphase Energy said revenue in the fourth quarter will be just $300 million to $350 million, which was nowhere near the $577 million forecast by analysts. Sales also came in short of expectations in the third quarter, although it did beat at the bottom-line.

That is the latest solar firm to disappoint amid a glut of inventory and softening demand in Europe and, to a lesser degree, the US.

Other solar stocks are falling as a result, with SolarEdge, Sunrun, Sunnova Energy and First Solar all trading down anywhere between 1% to 7%.

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