5 Best Reddit Stocks To Invest In

In this article, we will take a look at the 5 best Reddit stocks to invest in. If you want to see some more of the stocks, take a look at the 12 Best Reddit Stocks To Invest In.

5. Okta, Inc. (NASDAQ:OKTA)

Number of Hedge Fund Holders: 47

Okta, Inc. (NASDAQ:OKTA) is a San Francisco, California-based identity and access management corporation providing cloud-based software that aids companies in managing and securing user authentication into applications.

Investors think Okta, Inc. (NASDAQ:OKTA) is one of the best Reddit stocks to invest in because it could be an acquisition target for a bigger cybersecurity company. Furthermore, the Reddit community thinks that Okta, Inc. (NASDAQ:OKTA) stock is bottoming out and provides an attractive entry point to investors. On October 24, Michael Turits at KeyBanc gave Okta, Inc. (NASDAQ:OKTA) stock an Overweight rating with a target price of $70. The analyst anticipates strong Q3 2022 results on the back of survey data obtained from 35 value-added resellers (VARs) and other channel partners. Furthermore, the survey data revealed a stable IT budget growth for 2023 as well. The raised global threat environment due to the tensions between Russia and Ukraine, China, and the US will keep cybersecurity spending strong moving forward, playing in favor of companies like Okta, Inc. (NASDAQ:OKTA).

4. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)

Number of Hedge Fund Holders: 72

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is a Hsinchu, Taiwan-based designer and manufacturer of semiconductor chips.

The Reddit community is bullish on the stock as it is currently valued at the lower end of its historical range over the past ten years. The forward price-to-earnings ratio stands at 10.4, while the forward EV/EBITDA indicator is at 6.2, reflecting the lowest levels since 2016. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) has been termed as one of the best Reddit stocks due to the strong demand for the company’s offerings. Furthermore, the Reddit community thinks the current stock price has already factored in the geopolitical tension between the US and China regarding Taiwan. Meanwhile, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is working on hedging the geopolitical risk by expanding its operations in Japan. In a research note issued on October 14, Bruce Lu at Goldman Sachs gave Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) stock a target price of $89, along with a Buy rating.

Baron Funds shared its long-term bullish outlook on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q3 2022 investor letter. Here’s what the firm said:

“Semiconductor giant Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) detracted from performance due to the global macroeconomic slowdown and softening demand for consumer electronics. We retain conviction that Taiwan Semi’s technological leadership, pricing power, and exposure to secular growth markets, including high-performance computing, automotive, and IoT, will allow the company to deliver strong revenue growth over the next several years.”

3. Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 72

Tesla, Inc. (NASDAQ:TSLA) is an Austin, Texas-based EV giant under the leadership of Elon Musk. The company is at the third position on our list of the 12 best Reddit stocks to invest in.

The Reddit community has taken note of the recent sell-off in Tesla, Inc. (NASDAQ:TSLA), which provides an attractive entry point to investors. Following the sell-off, Ark Investment Management’s Cathie Wood has also taken fresh positions in the company during the last week. Ms. Wood and her team believe that Tesla, Inc. (NASDAQ:TSLA) has the potential to increase its total addressable market (TAM) by ten times if they introduce cheaper vehicle models. During the Q3 2022 earnings call, Mr. Musk revealed that the company is working on developing a variant that would be half in price as compared to the Model 3 and Model Y. Ark Investment Management’s team highlighted that a vehicle worth $60,000 only addresses 5% of the automobile market in the US. In contrast, if the price of the vehicle is $30,000, it would cater to 50% of the US market.

Here’s what Baron Funds said about Tesla, Inc. (NASDAQ:TSLA) in its Q3 2022 investor letter:

“Tesla, Inc. (NASDAQ:TSLA) makes fully electric vehicles (EVs), related software offerings, solar and energy storage products, and battery cells. After a tough second quarter that included a prolonged shutdown of one of Tesla’s key manufacturing facilities in Shanghai, the company demonstrated a significant 40% sequential increase in production volumes resulting in another quarterly record of production and deliveries. Despite the second quarter complexities, inflationary pressures, and production ramp-up of two new facilities (Berlin and Austin), the company exceeded Wall Street expectations in the second quarter. It maintained healthy 26% normalized gross margins, achieved industry-leading 18% adjusted operating income margins, and has generated over $14 billion of cash from operations over the past year. Moreover, due to Tesla’s high level of vertical integration and U.S. manufacturing capacity, the company is expected to be one of the key beneficiaries of the Inflation Reduction Act, qualifying for significant manufacturing and consumer-related incentives. We believe these incentives can add up to tens of billions of dollars over the coming decade, while also enhancing Tesla’s competitive advantage versus other automakers. The company also held its second artificial intelligence day, which presented continued advancements in its vehicle self-driving program and showcased its rapidly evolving humanoid robot developments (check out the Optimus videos on YouTube). We continue to believe Tesla is well positioned to benefit from complementary tectonic shifts in the automotive industry, including electrification, autonomous driving, and shared mobility. And, yes, Tesla is still effectively debt free, with over $18 billion of cash on its balance sheet, and investors are even speculating about a stock buyback, a far cry from worries of bankruptcy just a few years ago.”

2. Salesforce, Inc. (NYSE:CRM)

Number of Hedge Fund Holders: 116

Salesforce, Inc. (NYSE:CRM) is a San Francisco, California-based cloud-based provider of customer relationship management (CRM) software.

One of the reasons Salesforce, Inc. (NYSE:CRM) is considered one of the best Reddit stocks is because of the company’s $10 billion share buyback program. The Reddit community has taken note of the possibility that New York-based hedge fund Starboard Value LP would take a significant stake in the company in the near future. The hedge fund intends to find substantial value in Salesforce, Inc. (NYSE:CRM) after it has lost 40% of its value in the last year despite being a market leader. Furthermore, Salesforce, Inc. (NYSE:CRM) offers a long-term growth profile and an opportunity to expand margins. The hedge fund thinks that the stock price performance does not reflect the strong market leadership position of Salesforce, Inc. (NYSE:CRM).

Here’s what Oakmark Funds said about Salesforce, Inc. (NYSE:CRM) in its Q3 2022 investor letter:

“Salesforce, Inc. (NYSE:CRM) has become a dominant global player in sales, customer service, commerce and marketing software over the past 20 years. The company earns 80% gross margins and grows 20% organically. Plus, virtually all of its revenue is recurring. We see Salesforce as a great business that we’ve admired from afar for a long time. More recently, the organization has made some changes at the top that prompted us to take a closer look at the stock. New CEO Bret Taylor and CFO Amy Weaver are bringing a culture of financial discipline. We believe this renewed focus on profitability and capital return, combined with Salesforce’s strong underlying business characteristics, will yield strong results. The current valuation of 3.9x next year’s revenues represents a significant discount compared to publicly traded peers and recent private market values in the software space that have similar growth profiles. We view this discount as an opportunity to invest in a great business at a good value.”

Salesforce, Inc. (NYSE:CRM) was held by 116 hedge funds at the end of Q2 2022.

1. Visa Inc. (NYSE:V)

Number of Hedge Fund Holders: 166

Visa Inc. (NYSE:V) is a San Francisco, California-based digital payments provider through its credit, debit, and prepaid cards.

The company’s Q4 2022 results were widely discussed on Reddit as it outperformed revenue and earnings estimates for the period. Revenue increased from $6.56 billion in Q4 2021 to $7.79 billion in Q4 2022, surpassing the analysts’ forecast of $7.75 billion. Meanwhile, the adjusted EPS of $1.93 was six cents higher than the consensus estimates. Redditors also positively welcomed the company’s 20% increase in dividends and the announcement of a $12 billion share buyback plan. Following the quarterly results, James Fotheringham at BMO Capital gave Visa Inc. (NYSE:V) stock an Outperform rating along with a target price of $241 in an update issued to investors on October 27. The analyst considers Visa Inc. (NYSE:V) stock as an integral holding because it provides safety against inflation and recession, making it one of the best Reddit stocks to invest in.

Here’s what RiverPark Funds said about Visa Inc. (NYSE:V) in its Q3 2022 investor letter:

“We reinitiated a small position in Visa, which we had previously owned for years (selling out of the position at higher levels in February). We continue to believe that the long-term secular growth trend towards digital payments remains intact and has been further enhanced by the COVID crisis. The growth in debit cards, contactless payments, e-commerce, and now, buynow-pay-later (BNPL), are all driving digital payment penetration, and we continue to be impressed with the long-term growth potential of V (and our other payment holdings Mastercard, Adyen, and PayPal).”

You can also take a peek at the Best Biotech Stocks Under $10 and the Best Lithium Stocks To Buy.

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