In this article, we will discuss the 11 Best Reddit Stocks to Invest In.
In finance, cognitive biases tend to affect investor decision-making, says Austin Barbosa, CFA, senior analyst in Client Portfolio Management at iA Global Asset Management. Among such biases, confirmation bias is particularly pervasive. This bias refers to the inclination to favour information aligning with pre-existing beliefs while, at the same time, also discounting contradictory evidence. Confirmation bias gets exacerbated by echo chambers on social media platforms, in which algorithm-fueled content personalization results in an environment reinforcing investors’ views.
To provide a brief context, an echo chamber in social media means an environment in which people are mainly exposed to opinions, information, and views which reinforce existing beliefs. Renowned social media platforms such as X (formerly Twitter) and Reddit remain mainly prone to such dynamics, primarily among younger retail investors, which affects market dynamics.
Social Media’s Impact on Financial Decisions
Interplay between confirmation bias and echo chambers resulted in significant financial phenomena over the past few years, says Barbosa. One critical point in this regard focuses on GameStop — the rally of 2024. This stemmed from the re-surfacing of Keith Gill on Reddit and X after a break of ~3 years. The return of Keith resulted in a sudden increase in GameStop’s stock price, increasing by over 70% in a single day and touching a peak of ~$31, only to fall by more than 50% in just a few days, as per Barbosa.
Reuters, while referring to the comments made by Steve Sosnick (Chief strategist at Interactive Brokers), highlighted that this is a characteristic of a pattern which has been evolved in GameStop’s trading — the stock’s price tends to increase, then after it settles down or witnesses a correction, Gill’s persona again emerges via social media post.
Even in the cryptocurrency market, social media platforms such as X and Reddit resulted in speculative hype, mainly during bull runs, says Barbosa. Several market enthusiasts bought into projects such as Cardano (ADA) without understanding the risks. Then Cardano saw a significant decline, falling over ~40% from its 2024 peak, highlighting uncertainty and volatility.
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What Should be The Strategy?
Austin Barbosa, CFA believes that platforms such as X and Reddit also provide significant value to stay informed. While X provides access to breaking news and expert opinions, Reddit enables in-depth discussions and diverse community insights. Instead of relying on a single subreddit, it is of utmost importance to explore several other finance-oriented communities which provide different viewpoints. If an investor engages with diverse perspectives, it will help prevent the pitfalls of group thinking, providing a broader understanding of overall market dynamics. It is important to supplement the information sources through trusted and reliable financial news outlets, and market research reports.
With these thoughts in mind, let us now have a look at the 11 Best Reddit Stocks to Invest In.
Image by Sergei Tokmakov Terms.Law from Pixabay
Our Methodology
To list the 11 Best Reddit Stocks to Invest In, we sifted through Reddit threads and narrowed our list to the 11 best stocks by selecting the trending ones. Next, we chose the ones that are popular among hedge funds. Finally, the stocks were arranged in ascending order of their hedge fund sentiments, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
11 Best Reddit Stocks to Invest In
11. Clear Secure, Inc. (NYSE:YOU)
Number of Hedge Fund Holders: 27
Clear Secure, Inc. (NYSE:YOU) operates a secure identity platform under the CLEAR brand name. Analyst Joshua Reilly of Needham maintained a “Buy” rating on the company’s stock, retaining the price objective of $45.00. The analyst’s rating is backed by factors including Clear Secure, Inc. (NYSE:YOU)’s strong performance in Q4 2024. The company’s revenue came in at $206.3 million, reflecting a rise of 20.7%, while total bookings were $228.9 million, up 17.2%. The analyst remains optimistic about Clear Secure, Inc. (NYSE:YOU), thanks to attractive valuation as well as expected improvements in customer experience.
Such enhancements can lead to increased net member retention across the fiscal year. Also, the analyst noted that the estimates for H2 2025 don’t account for potential benefits due to expected price increases, demonstrating that there can be more upside. Overall, the analyst remains optimistic, focusing on Clear Secure, Inc. (NYSE:YOU)’s strategic position and growth prospects. As per Ken Cornick, Co-Founder, President and CFO of Clear Secure, Inc. (NYSE:YOU), the company remains well-placed to compound Total Bookings, Revenue, EBITDA and FCF in 2025 and beyond. For Q1 2025, the company expects revenue of $207 million – $209 million and total bookings of $202 million – $204 million. For the full year, it anticipates healthy revenue and total bookings growth with expanding margins.
10. DTE Energy Company (NYSE:DTE)
Number of Hedge Fund Holders: 35
DTE Energy Company (NYSE:DTE) is engaged in the energy-related businesses and services. Ross Fowler, an analyst from Bank of America Securities, maintained a “Buy” rating on the company’s stock and the associated price target remained same at $143.00. The rating is backed by the company’s strong financial performance and strategic initiatives. DTE Energy Company (NYSE:DTE)’s operating earnings for 2024 came in at $1.4 billion, or $6.83 per diluted share as compared to 2023 operating earnings of $1.2 billion, or $5.73 per diluted share. Fowler opines that the company has placed a robust EPS guidance for 2025, which hints at confidence in their financial growth prospects.
For 2025, it expects 2025 operating EPS of $7.09 – $7.23. DTE Energy Company (NYSE:DTE)’s improved earnings, due to factors including increased rates and renewable energy gains, contributed significantly to its annual performance. The overall outlook is positive, thanks to higher capital spending as well as potential growth from data center development. Therefore, this strategic positioning, together with robust EPS growth guidance and further upside due to tax credits, supports the analyst’s rating.
Elsewhere, analysts at Jefferies updated their financial outlook on DTE Energy Company (NYSE:DTE), raising its price objective from $129.00 to $143.00, and maintaining a “Hold” rating. The price target increase stems from a combination of industry factors and DTE Energy Company (NYSE:DTE)’s specific financial guidance. The company’s progress in 2024 places it well to support Michigan’s economic growth by powering the rise of data centers and the electrification of vehicles.
9. Antero Midstream Corporation (NYSE:AM)
Number of Hedge Fund Holders: 38
Antero Midstream Corporation (NYSE:AM) owns, operates, and develops midstream energy assets in the Appalachian Basin. Analyst Kalei Akamine from Bank of America Securities maintained a “Buy” rating on the company’s stock, maintaining the price target at $46.00. The rating is backed by a combination of factors highlighting Antero Midstream Corporation (NYSE:AM)’s strong financial and operational performance. The analyst believes that the company witnessed an operationally robust quarter, with adjusted EBITDA remaining in line with the market expectations and capital expenditures coming in significantly lower than expected, leading to a notable free cash flow beat. Notably, the drilling and completion capital came in at $620 million in FY 2024, a 32% decline from the prior year.
Antero Midstream Corporation (NYSE:AM) generated FCF of $73 million in 2024, despite being unhedged with Henry Hub averaging $2.27 per Mcf. The analyst further highlighted that the financial discipline is moving the company’s net debt in a positive direction, offering a pathway to potentially eliminating net debt by the end of 2025. Additionally, Antero Midstream Corporation (NYSE:AM)’s 2025 guidance demonstrates modestly improved production levels and reduced capital expenditure estimates, reflecting efficient operational execution. The company’s 2025 drilling and completion capital budget is $650 – $700 million. Antero Midstream Corporation (NYSE:AM)’s net production is expected to average between 3.35 and 3.45 Bcfe/d during 2025.
8. Crane Company (NYSE:CR)
Number of Hedge Fund Holders: 38
Crane Company (NYSE:CR) is engaged in manufacturing and selling engineered industrial products. DA Davidson analyst Matt Summerville maintained a “Buy” rating on the company’s stock and the price objective of $200.00. The company has demonstrated its business system and strategy deployment process, which the analyst believes are critical factors for Crane Company (NYSE:CR)’s ability to deliver continued, material relative outperformance. Elsewhere, Bank of America Securities analyst Ronald Epstein reiterated the bullish stance on the company’s stock, giving a “Buy” rating.
This rating is backed by a combination of factors demonstrating Crane Company (NYSE:CR)’s strong growth potential and operational excellence. As per the analyst, the company’s strategic approach to M&As, aided by a strong financial position with significant capital for investment, places Crane Company (NYSE:CR) well for future expansion. Its disciplined capital allocation strategy, emphasising high-margin businesses with unique technologies, aids the potential for continued success. The company has significantly increased its leadership in the authentication market, with the OpSec integration progressing as anticipated and the acquisition of De La Rue Authentication Solutions remaining on track to close in Q2 2025. For FY 2025, Crane Company (NYSE:CR) expects adjusted EPS of between $4.00 – $4.30.
7. MicroStrategy Incorporated (NASDAQ:MSTR)
Number of Hedge Fund Holders: 44
MicroStrategy Incorporated (NASDAQ:MSTR), doing business as Strategy, offers AI-powered enterprise analytics software and services. The Q4 2024 marked its largest ever increase in quarterly bitcoin holdings, resulting in the acquisition of 218,887 bitcoins for $20.5 billion, since Q3 end. Looking ahead, MicroStrategy Incorporated (NASDAQ:MSTR) is optimistic about enhancing shareholder value via strategic initiatives in Bitcoin and AI technologies. The company remains well-placed to continue its growth and transformation efforts, thanks to the strong investor backing and an emphasis on transparency and value creation.
There has been optimism around MicroStrategy Incorporated (NASDAQ:MSTR)’s future prospects, thanks to several potential growth drivers. The expected increase in institutional adoption of Bitcoin can support the company, as it places itself as a critical vehicle for Bitcoin exposure in the public markets. MicroStrategy Incorporated (NASDAQ:MSTR)’s software business can also act as a long-term growth driver. The pivot to cloud-based offerings can offer opportunities for future growth in this segment. Talking about its software business, in Q4 2024, its subscription services revenues sat at $31.9 million, demonstrating a 48.4% growth YoY.
Greenlight Capital, an investment management firm, published the Q4 2024 investor letter. Here is what the fund said:
“There is an open debate as to whether Bitcoin will at some point enter the mainstream as an official currency. In fact, there is a bill before Congress for the U.S. to establish a “Strategic Bitcoin Reserve” and buy one million Bitcoins over five years. The bill’s purpose appears to be the use of public funds to ramp up the price of Bitcoin, thereby enhancing the wealth of existing Bitcoin holders. This seems a dubious use of taxpayer funds, but the new administration has a lot of Bitcoin-owning supporters, so it might happen. More likely, cooler heads will decide that the government should not borrow another trillion dollars in the bond market to speculate in Bitcoin and that there is, in fact, nothing strategic about doing so.
One of the biggest owners of Bitcoin is MicroStrategy Incorporated (NASDAQ:MSTR). While MSTR owns a small software business, its principal pursuit is buying Bitcoin. In practice, MSTR is an investment company that buys and holds Bitcoin.2 MSTR trades at a large premium to the value of the underlying Bitcoin it holds. The idea is to raise money from new investors at a premium and use the proceeds to buy more Bitcoin. Since the Bitcoin that MSTR buys costs less than the Bitcoin-implied value of MSTR’s stock, the new investment is dilutive to new investors but accretive to existing investors. MSTR’s promoters have labeled the return to existing investors created by this scheme the “Bitcoin yield”. As Bitcoin itself yields nothing, the Bitcoin yield is simply a measure of the Ponzi finance’s effectiveness. Lately, it has been pretty effective.”
6. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 64
Palantir Technologies Inc. (NASDAQ:PLTR) is engaged in building and deploying software platforms for the intelligence community to help in counterterrorism investigations and operations. Investment firm William Blair upped the company’s stock from “Underperform” to “Market Perform” as a result of the recent decline in its stock price. Notably, the company’s stock has seen a decline of ~30% in the past month. William Blair likes Palantir Technologies Inc. (NASDAQ:PLTR)’s strong revenue growth and operating margins. In Q4 2024, the company’s revenue saw an increase of 36% YoY and 14% quarter-over-quarter to $828 million.
Looking ahead, the firm anticipates Palantir Technologies Inc. (NASDAQ:PLTR) to win new contracts with the U.S. government. The company’s Artificial Intelligence Platform (AIP) possesses the potential to be a game-changer when it comes to enterprise AI adoption. The platform’s capability to integrate, secure, and manage data while offering AI-powered insights places it as a comprehensive solution for companies focusing on leveraging AI throughout operations. Palantir Technologies Inc. (NASDAQ:PLTR)’s success in implementing AIP throughout industries, such as healthcare, manufacturing, retail, and supply chain, exhibits its versatility and potential for increased adoption.
Baron Funds, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“Two software stocks that the Fund did not own, Palantir Technologies Inc. (NASDAQ:PLTR) and AppLovin Corporation, each gained more than 100% and accounted for 52% of the Benchmark’s gain during the quarter. At year end 2024, Palantir was valued at approximately 200 times its expected 2024 earnings, while AppLovin was valued at 80 times. The market cap of each exceeded $100 billion, and the two stocks represented nearly 8% of the Index. Neither company met our criteria for investment. The total impact on relative performance from Palantir and AppLovin was about 7 times higher than we have seen historically for two securities that are unique to the Benchmark, showing just how unparalleled the event was and something that we believe is unlikely to be repeated.”
5. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 96
Advanced Micro Devices, Inc. (NASDAQ:AMD) operates as a semiconductor company. Aaron Rakers, an analyst from Wells Fargo, reiterated a “Buy” rating on the company’s stock. The associated price target was same at $140.00. The analyst’s rating is backed by a combination of factors that highlight the company’s strategic positioning and growth prospects. One of the main reasons is Advanced Micro Devices, Inc. (NASDAQ:AMD)’s focus on expanding its data center GPU offerings, mainly with the upcoming ramp of the CDNA 4-based MI350X, which can enhance AI training capabilities. The analyst opines that this move forms part of a broader portfolio strategy targeted at capturing significant share in the data center market over time.
Furthermore, Advanced Micro Devices, Inc. (NASDAQ:AMD)’s momentum in the server CPU market, fueled by healthy enterprise demand and recovery in the cloud sector, remains a critical growth driver. The company’s capability to maintain and enhance its market share, mainly in hyperscale cloud applications, aids the positive outlook. The analyst sees Advanced Micro Devices, Inc. (NASDAQ:AMD) as having an attractive risk-reward profile considering its healthy positioning and strategic initiatives in the data center and server markets. Furthermore, as businesses and consumers continue to upgrade their systems, the company has a chance to capture a significant share of the PC CPU market. Notably, the refresh cycle is anticipated to fuel above-seasonal growth in the PC segment.
4. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 126
Tesla, Inc. (NASDAQ:TSLA) is engaged in designing, developing, manufacturing, leasing, and selling EVs, and energy generation and storage systems. Cowen analyst Michaeli gave a “Buy” rating on the company’s stock, setting its price objective of $388. While there are challenges, the list of game-changing level catalysts throughout EV, AV and robotics remains strong enough to tilt risk/reward favorably. Elsewhere, Morgan Stanley’s Adam Jonas remains optimistic about Tesla, Inc. (NASDAQ:TSLA)’s potential in the evolving landscape of AI and robotics. The analyst opines that this can offset its struggles in the EV market.
Reuters reported that Tesla, Inc. (NASDAQ:TSLA) has been fetching a valuation far above that of the world’s leading automotive and technology firms, considering the standard financial metrics. This is because several investors and analysts believe that Tesla, Inc. (NASDAQ:TSLA) is not really a car company at all, but an AI-pioneer that can unleash a revolution in robotaxis and humanoid robots. The company continues to focus on innovation and product development in a bid to maintain a competitive edge.
Baron Funds, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“Tesla, Inc. (NASDAQ:TSLA) designs, manufactures, and sells electric vehicles, related software and components, and solar and energy storage products. Shares rose on growth in the energy segment, the promise of new model launches in 2025, and increasing investor confidence in Tesla’s AI initiatives. Despite macroeconomic challenges, delivery data in major markets like China have shown considerable improvement. The energy and automotive segments demonstrated stronger-than-expected profitability. Tesla also expanded its advanced computing center in Texas, released improved version of its software-enhanced driving solution, and is set to launch new mass market vehicles years after the initial rollouts of Models 3 and Y. Expectations of deregulation under the incoming administration point to the potential acceleration of new technology rollouts, which could enhance Tesla’s leadership position in real world AI and bolster investor confidence that Tesla will benefit from these large and attractive growth opportunities.”
3. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 166
Analyst at Goldman Sachs, Michael Ng, gave a “Buy” rating on Apple Inc. (NASDAQ:AAPL)’s stock, with a consistent price target of $294.00. The firm’s stance was a result of the company’s introduction of the new iPhone 16e, which is the latest in the more budget-friendly iPhone SE lineup. The iPhone 16e debuts as the first smartphone incorporating Apple Inc. (NASDAQ:AAPL)’s own C1 cellular modem, hinting a strategic move. Despite the iPhone 16e’s higher-than-expected entry price of $599, Goldman Sachs believes that the launch is a positive step.
Notably, this new pricing is regarded as the potential driver for upgrade demand as well as sustained growth in Apple Inc. (NASDAQ:AAPL)’s customer base. Furthermore, the company’s services segment revenues are expected to see a strong growth due to the expanding installed base of Apple devices as well as increased user engagement in the Apple Inc. (NASDAQ:AAPL)’s ecosystem. Furthermore, the growth in services can also enhance the value proposition of the company’s hardware products. With users becoming more deeply integrated into Apple Inc. (NASDAQ:AAPL)’s ecosystem with the help of various services, they are expected to remain loyal to the brand.
Columbia Threadneedle Investments, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“The fund maintained a position in Apple Inc. (NASDAQ:AAPL) throughout the quarter through the release of the company’s new iPhone 16 in September. Company leaders were excited about the release of the new model, as this is the first model that will feature enhanced AI capabilities through the Apple Intelligence features. Sales for the first few weeks in October and November trailed behind year over year sales from the iPhone 15, as availability of Apple Intelligence was not compatible with all iPhone models. Apple announced a partnership with OpenAI that has allowed the integration of ChatGPT into the Apple ecosystem, separate from the core Apple Intelligence features. This partnership highlights continued progress from Apple to introduce AI capabilities into its products and we expect the iPhone 17 to have even more expansive AI capabilities, increasing potential demand for the new model that is on track to be released in 2025.”
2. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 174
TD Cowen analyst John Blackledge has maintained their bullish stance on Alphabet Inc. (NASDAQ:GOOG)’s stock, giving a “Buy” rating on March 10. The analyst’s rating is backed by the expected growth and strategic positioning of Google Cloud, mainly in the realm of GenAI. The analyst expects Google Cloud to significantly increase the GenAI revenue. The growth is expected to stem from the adoption of Alphabet Inc. (NASDAQ:GOOG)’s Gemini models, which continue to gain traction among developers and are regarded as a competitive advantage over AWS and Azure.
Furthermore, Blackledge noted the significant capital expenditure Alphabet Inc. (NASDAQ:GOOG) has been committing to its AI infrastructure, which can increase over the upcoming years. The investment focuses on addressing current capacity constraints as well as aiding the higher demand for Google Cloud’s AI offerings. Overall, the combination of such factors, which include the potential for GenAI to be a larger portion of Alphabet Inc. (NASDAQ:GOOG)’s overall revenue, supports the rating.
Columbia Threadneedle Investments, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“Alphabet Inc. (NASDAQ:GOOG) (parent company Alphabet) generated strong double-digit returns during the quarter, as the company’s tremendous innovation in AI, along with strength in its core business of search and advertising and a healthy focus on profit growth and shareholder friendly capital allocation, shifted investor focus away from ongoing litigation with the Department of Justice related to market dominance. In the month of December alone, Google released to the public Gemini 2.0, its most capable AI model yet, as well as new generative image and vision models. And if that was not enough, Google also announced progress in quantum computing. Once considered an AI laggard, the flurry of product announcements and AI development did not go unnoticed by the market and the stock reacted accordingly.”
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 223
The primary engine of NVIDIA Corporation (NASDAQ:NVDA)’s growth revolves around expanding AI and data center market. With companies throughout industries investing significantly in AI infrastructure, the company’s GPUs and specialized AI chips are in high demand. The roll out of the RTX Blackwell family as well as advancements in enterprise AI solutions such as the Cosmos platform exhibit NVIDIA Corporation (NASDAQ:NVDA)’s ability to develop new market opportunities.
NVIDIA Corporation (NASDAQ:NVDA)’s expansion into areas including robotics, automotive AI, and potentially Arm-based PC CPUs can result in significant new revenue streams. Such diversification efforts can help the company maintain its growth trajectory amidst increased competition in its core markets. NVIDIA Corporation (NASDAQ:NVDA)’s strong R&D capabilities, together with its extensive ecosystem of partners and developers, place it well to maintain the technology leadership in AI chips. Overall, the company’s focus on both hardware and software solutions for AI applications provides it a competitive edge in offering comprehensive solutions to customers.
Columbia Threadneedle Investments, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“NVIDIA Corporation (NASDAQ:NVDA) continued to outperform the market during the fourth quarter. The technology giant and top position in the fund delivered on sky-high expectations during the quarter and reported quarterly expectations that exceeded expectations. The red-hot company provided forward-looking expectations which were regarded as slightly lackluster as compared to prior quarters that smashed expectations. While the stock did churn a bit in the quarter, the AI giant remains top of mind for investors, especially as the company is on pace to satisfy the ‘staggering’ demand for its new product, Blackwell, which is poised to enter the market over the next year. The company’s position of owning all the major pieces of the evolving AI data center enables it to strengthen its competitive position and to define the technology roadmap for generations to come.”
While we acknowledge the potential of NVDA as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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