In this article, we will take a look at the 10 Reddit stocks with biggest upside . To see more such companies, go directly to 5 Reddit Stocks with Biggest Upside.
Rising inflation and persistent rate hikes have finally started to show their real effects. As inflation eats into the savings of millions of Americans, their ability to pile into stocks, which went through the roof after the pandemic and caused an unprecedented rise in meme stocks and overall retail investing space, is subsiding. Last month a Bloomberg report cited a survey from the American Association of Individual Investors. The survey showed that individual investors are on the retreat while institutional investors have been piling into stocks. Bearish sentiment took over bulls for the first time since June, according to the survey. According to the survey, investors with a bearish view of the stock market for the next six months jumped to 35.9%, while those with a bullish view fell to 32.3%.
The overall stock market performance in August remained dismal, which caused retail investors to flee the markets and pull out their funds. On the other hand, according to data from Bloomberg, courtesy of Bank of America, institutional investors and hedge funds bought $4.4 billion worth of shares in a single week in August, which was the largest inflow in two months among the clients of Bank of America.
The report said that while individual investors fled the markets, they remained excited about Nvidia and Apple, along with some other mainstream companies that have become very famous on Reddit.
However, chances are that individual investors will come back to the market once the doubts around the Fed’s future policy on inflation are cleared and inflation begins to recede. The Bloomberg report cited Citigroup Inc.’s Scott Chronert, who said that if S&P 500 falls to 4,200-4,300, an attractive entry point could be created for investors. The report also quoted HSBC Holdings Plc strategist Max Kettner, who said that he was awaiting a “renewed selloff to scale up the firm’s US equity exposure.”
Luis Louro / shutterstock.com
Our Methodology
For this article we conducted a broader-level survey of mainstream financial media and consulted over 10 credible financial websites to see which stocks popular on Reddit investing threads have the biggest upside potential. Most of these sources surveyed famous Reddit investing threads like Investing, WSB, Stocks, among many others, to see which stocks Redditors were piling into and then analyzed the best of these stocks.
Reddit Stocks with Biggest Upside
10. NIO Inc. (NYSE:NIO)
Number of Hedge Fund Holders: 19
Chinese EV company NIO Inc. (NYSE:NIO)’s shares have lost about 50% in value over the past one year. But Redditors are still betting NIO Inc. (NYSE:NIO) would grow in the future. NIO Inc. (NYSE:NIO) recently jumped after the company posted strong delivery numbers for August. NIO Inc. (NYSE:NIO)’s deliveries in August 2023 saw an 81% rise on a year-over-year basis.
As of the end of the second quarter of 2023, 19 hedge funds tracked by Insider Monkey had stakes in NIO Inc. (NYSE:NIO). The most significant stakeholder of NIO Inc. (NYSE:NIO) during this period was Ray Dalio’s Bridgewater Associates which owns a $32 million stake in the company.
9. Chindata Group Holdings Limited (NASDAQ:CD)
Number of Hedge Fund Holders: 22
Data center solutions company Chindata Group Holdings Limited (NASDAQ:CD) ranks 9th in our list of the best Reddit stocks with upside.
As of the end of the second quarter of 2023, 22 hedge funds in Insider Monkey’s database of 910 hedge funds were long Chindata Group Holdings Limited (NASDAQ:CD).
In a latest earnings call Chindata Group Holdings Limited (NASDAQ:CD) talked about its future plans:
“…On the second half, there is going to be — we’re probably going to spend RMB4 billion or RMB6 billion further. I think — we think that this potential upside or increased spending will be a good news for everybody. Why it’s good news? Because this is driven by the progress of some incremental pipeline project, new project, which company is optimistic to obtain in the second half of this year.
And these pipeline projects may bring better revenue and EBITDA for future years. Not necessarily this year 2023, but future year in 2024 and ’25, beyond previous estimate. In addition, and a large — a significant portion of this incremental pipeline projects, again not the projects we have disclosed, these projects are actually driven by our overseas business. In other words, overseas projects will have a larger-than-expected shares and that basically means the increase of the unit CapEx accordingly. So obviously, the timing of the spending may vary around late 2023 or start of — beginning of 2024. So part of the $1.3 billion you saw in those privatization documents and a very small part of it, may be a carryover 2024 to spend. But on an aggregated level, if you combine 2023 and 2024 CapEx together, it should stay the same.”
Read the full earnings call transcript here.
8. C3.ai, Inc. (NYSE:AI)
Number of Hedge Fund Holders: 23
C3.ai, Inc. (NYSE:AI) is one of those stocks that saw huge gains earlier this year amid the AI boom. Many said most of the gains came on the back of speculations and due to the company having “ai” in its name. Recently, C3.ai, Inc. (NYSE:AI) said it won’t turn profitable until the fiscal fourth quarter of 2024. Wedbush Securities analyst Dan Ives lowered his price target to $42 from $50 for C3.ai, Inc. (NYSE:AI) but maintained an Outperform rating.
Ives believes increased spending in the near term would be an issue but he sees the “investment profile as near-term pain for long-term gain and speaks to the building pipeline c3 is seeing in the field.”
Hedge fund DE Shaw has over $32 million worth of PUT positions on C3.ai, Inc. (NYSE:AI) as of the end of the June quarter.
7. DTE Energy Company (NYSE:DTE)
Number of Hedge Fund Holders: 27
Detroit-based energy company DTE Energy Company (NYSE:DTE) ranks 7th in our list of the best Reddit stocks with upside potential. DTE Energy Company (NYSE:DTE) has lost about 24% in value over the past 12 months. Barclays recently published a bullish note on the broader utilities and power industry and named several stocks it likes in the space. Barclays likes DTE Energy Company (NYSE:DTE) due to regulatory de-risking through H2 2023.
As of the end of the second quarter of 2023, 27 hedge funds tracked by Insider Monkey had stakes in DTE Energy Company (NYSE:DTE).
DTE Energy Company (NYSE:DTE)’s management in second quarter earnings call talked about DTE’s guidance:
“Through the performance of our portfolio, we have plans to achieve the midpoint of our operating EPS guidance range for DTE and we’ll update the business unit guidance after the summer weather plays out. Our guidance does assume historically average weather for the remainder of the year without the normal contingency that we typically build into the plan. Our team has really made excellent progress identifying and implementing the opportunities in onetime O&M reductions across the company while ensuring the reliability and safety that our customers expect. This allows us to continue to deliver for all our stakeholders. The performance this year will allow us to continue to be very well positioned to achieve our long-term EPS growth and the premium returns that our shareholders have come to expect from us.”
Read the full earnings call transcript here.
6. Tesla Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 79
Tesla Inc. (NASDAQ:TSLA) remains one of the favorite stocks of Redditors. After all said and done, Tesla Inc. (NASDAQ:TSLA) remains a dominant player in an industry that is nowhere to go but up. Recently, Tesla Inc. (NASDAQ:TSLA) shares jumped after Morgan Stanley upgraded the stock. Morgan Stanley’s analyst Adam Jonas likes Tesla Inc. (NASDAQ:TSLA)’s AI potential on the back of the company’s much-hyped Dojo supercomputer. Jonas thinks the supercomputer could give a whopping $500 billion boost to Tesla Inc. (NASDAQ:TSLA)’s market cap as he thinks the system has the potential to open up new revenue streams, thanks to the adoption of robotaxis and software services.
As of the end of the second quarter of 2023, 79 hedge funds tracked by Insider Monkey reported owning stakes in Tesla Inc. (NASDAQ:TSLA). The biggest hedge fund stakeholder of Tesla Inc. (NASDAQ:TSLA) was Catherine D. Wood’s ARK Investment Management which owns a $1.3 billion stake in the company.
Baron Partners Fund made the following comment about Tesla, Inc. (NASDAQ:TSLA) in its Q2 2023 investor letter:
Many factors contributed to the strong performance of our largest Disruptive Growth position, Tesla, Inc. (NASDAQ:TSLA), in the period. Investors’ concerns regarding Tesla in 2022 continue to dissipate, and the company’s business has continued to grow materially, although at below peak margins. Tesla’s deliveries in China are recovering. The company’s newest factory in Texas has ramped production and should contribute to improved domestic sales and margins. U.S. government policies have lowered the cost to own Tesla vehicles, while also reducing the company’s battery production expenses.
We continue to believe that Tesla is only scratching the surface of its potential. We regard announced partnerships between Tesla and its competitors in the quarter as important. In early June, Tesla agreed to provide Ford Motors access to Tesla’s electric vehicle (EV) charging technology and network. Other traditional and pure EV manufacturers, including General Motors, Rivian, and Volvo, quickly followed suit. We expect additional charging partnerships to ensue. In our view, these relationships validate Tesla’s charging technology and infrastructure as superior to other standards. Consolidation around a single technology should accelerate charging infrastructure deployment, diminish the risk of Tesla’s technology becoming obsolete, and lessen a key concern of hesitant EV purchasers. EV adoption is at a tipping point. And Tesla, with its approximately 60% domestic market share of EVs, should be the most important beneficiary of this shift…” (Click here to read the full text)
Click to continue reading and see 5 Reddit Stocks with Biggest Upside.
Suggested articles:
Disclosure: None. 10 Reddit Stocks with Biggest Upside is originally published on Insider Monkey.
