Today’s Trending Stocks: LendingClub, Tesla, Facebook, and More

With the U.S. economy strong, and crude prices firming up, the US stock market is trading lower amid the start of the earnings season, which kicked off with Alcoa posting results below expectations.

Meanwhile, among other stocks that are trending today are LendingClub Corp (NYSE:LC), Facebook Inc (NASDAQ:FB), Pacific Biosciences of California (NASDAQ:PACB), NVIDIA Corporation (NASDAQ:NVDA), and Tesla Motors Inc (NASDAQ:TSLA). Let’s take a look at the latest developments surrounding these stocks and assess the hedge fund sentiment towards them.

At Insider Monkey, we track around 750 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on, can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see the details here).

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Traders are watching the price action around LendingClub Corp (NYSE:LC) today after Wedbush analyst Henry Coffey initiated coverage on the stock with an ‘Underperform’ rating and a $3.75 price target. Given that shares of LendingClub closed at over $6 on Monday, Coffey is predicting substantial downside ahead. John Burbank‘s Passport Capital initiated a new stake of over 3 million shares in LendingClub Corp (NYSE:LC) during the second quarter.

Facebook Inc (NASDAQ:FB) is trending after it launched ‘Workplace’, which is basically Mark Zuckerberg and Co’s answer to Slack. Although Workplace doesn’t require a Facebook social profile, companies will have to pay between $1 to $3 monthly per active user to use the service. If Facebook’s Workplace succeeds, the social media company could have a strong beachhead in Enterprise to grow from. Among the funds we track, 148 were long Facebook Inc (NASDAQ:FB) at the end of June, down by 16 funds from the previous quarter.

Pacific Biosciences of California (NASDAQ:PACB) shares are around 5% in the red after its peer, Illumina, Inc. (NASDAQ:ILMN), reported soft preliminary third-quarter revenue. For the three months, Illumina estimates its sales came in at $607 million, or considerably lower than management’s previous third quarter revenue guidance of $625-$630 million. According to Illumina, the shortfall was driven by a larger than anticipated year-over-year decline in high throughput sequencing instruments. Therefore, some investors are afraid that demand for Pacific Biosciences’ products might also be softer-than-expected. A total of 22 funds tracked by Insider Monkey owned $154.72 million worth of Pacific Biosciences of California (NASDAQ:PACB)’s stock, which accounted for 25.20% of the float on June 30.

On the next page, we examine why NVIDIA Corporation and Tesla Motors are trending.

NVIDIA Corporation (NASDAQ:NVDA) is in the spotlight after Electrek reported that Tesla Motors Inc (NASDAQ:TSLA) will likely use NVIDIA’s CUDA, a parallel computing platform, to power its end-to-end computer vision framework that is intended to take data from camera sensors and compute it through image processing to better control Tesla vehicles. If the system works out, demand for NVIDIA’s chips could grow. The smart money was relatively optimistic on NVIDIA as the number of funds from our database with holdings in NVIDIA Corporation (NASDAQ:NVDA) rose by seven quarter-over-quarter to 50 at the end of June.

In other autonomous driving related news, Tesla Motors Inc (NASDAQ:TSLA) founder and CEO Elon Musk tweeted out after Germany’s Transport Ministry labeled Tesla’s Model S’ autopilot function as a ‘considerable traffic hazard’ according to an internal report.

@Cocoanetics @heiseonline Not actually based on science. Objective data shows Autopilot is safer than manually driven cars.

— Elon Musk (@elonmusk) October 10, 2016

Although it is on the bleeding edge in terms of autonomous driving features, Tesla has been criticized for adopting the tech too early. Hopefully, with more data and better technology, the autopilot will be mistake free over time. A total of 36 funds tracked by us owned shares of Tesla Motors Inc (NASDAQ:TSLA) at the end of June, down by three funds from the previous quarter.

Disclosure: none