In this article, we discuss the 12 best meme stocks to invest in.
Retail trading has increased dramatically as a result of zero-commission online trading platforms and fractional share trading. In a Bloomberg TV interview, Citadel Securities Execution Services director Joe Mecane stated that retail investors accounted for 25% of stock market activity in mid-2020. According to Deloitte, retail trading has the same equity trading as mutual funds and hedge funds combined in early 2021.
Internet platform Reddit has a special importance in this rise of retail investing. Reddit’s “WallStreetBets” thread is used by millions of young investors who band together to invest in what are often known as “meme stocks.”
GameStop is perhaps the biggest embodiment of the meme stock craze that is taking over the US markets over the last few months. Thousands of Redditors joined hands to buy GameStop Corp. (NYSE: GME) to counter institutional investors who shorted the videogame retailer stock, causing hedge funds to incur billions in losses this year. GME stock is up over 1000% year to date.
Luis Louro / shutterstock.com
The rise of retail investors worsened the situation for the hedge fund industry, which was already wavering. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Our Methodology
With this context in mind, here is our list of the 12 best meme stocks to invest in. They were picked keeping in mind the hype around the companies on Reddit forum WallStreetBets.
Labelling the stocks in this list as “meme stocks” does not mean all stocks mentioned here lack any fundamentals or business models. We called them meme stocks because they are extremely popular among Reddit investors.
Some of the meme stocks that are gaining momentum at the time of this writing include AMC Entertainment Holdings, Inc. (NYSE: AMC), Clover Health Investments, Corp. (NASDAQ: CLOV), Palantir Technologies Inc. (NYSE: PLTR), Affirm Holdings, Inc. (NASDAQ: AFRM), and SoFi Technologies, Inc. (NASDAQ: SOFI). These are the stocks that are most frequently discussed on WallStreetBets, a 10-million-strong Reddit forum.
We ranked these stocks based on the number of hedge funds having stakes in them, according to our data of over 873 hedge funds. We also included analyst ratings for each company to help readers make more informed investment decisions.
Best Meme Stocks To Invest In
12. Rocket Lab USA, Inc. (NASDAQ: RKLB)
Number of Hedge Fund Holders: N/A
Percentage gain in the past month: 75.99%
We start our list of the 12 best meme stocks to invest in with California-based aerospace company Rocket Lab USA, Inc. (NASDAQ: RKLB). The company develops and launches satellites and spacecraft for commercial, academic, defense, and civil markets. Rocket Lab USA, Inc. (NASDAQ: RKLB) has completed 21 launch missions, some of which were for NASA, the US Space Force (USSF), and the US Air Force.
On August 25, Rocket Lab USA, Inc. (NASDAQ: RKLB) completed its merger with Vector Acquisition Corporation (Nasdaq: VACQ). On September 8, Rocket Lab USA, Inc. (NASDAQ: RKLB) was secured a multi-launch contract from Kinéis, a French IoT connectivity provider, to deploy 25 satellite constellations across five dedicated Electron flights. The launch is set to begin in the second quarter of 2023.
The company has a market cap of $6.5 billion. In the first half of 2021, Rocket Lab USA, Inc. (NASDAQ: RKLB) recorded a revenue of $29.5 million, up 237% year over year. Shares of Rocket Lab USA, Inc. (NASDAQ: RKLB) skyrocketed 43.44% in the past three months.
11. Hut 8 Mining Corp. (NASDAQ: HUT)
Number of Hedge Fund Holders: 4
Percentage gain in the past month: 49.93%
Hut 8 Mining Corp. (NASDAQ: HUT) is a cryptocurrency mining company based in Toronto that ranks 11th on the list of 12 best meme stocks to invest in. Hut 8 Mining Corp(NASDAQ: HUT) offers blockchain infrastructure and technology solutions for bitcoin mining.
The company has a market cap of $1.91 billion. In the second quarter of 2021, Hut 8 Mining Corp. (NASDAQ: HUT) reported an EPS of -$0.14, missing estimates by -$0.16. The company’s second-quarter revenue came in at $26.81 million and beat revenue estimates by $4.54 million.
At the end of the second quarter of 2021, 4 hedge funds in the database of Insider Monkey held stakes worth $2.01 million in Hut 8 Mining Corp. (NASDAQ: HUT), up from 0 in the previous quarter.
Just like GameStop Corp. (NYSE: GME), AMC Entertainment Holdings, Inc. (NYSE: AMC), Clover Health Investments, Corp. (NASDAQ: CLOV), Palantir Technologies Inc. (NYSE: PLTR), Affirm Holdings, Inc. (NASDAQ: AFRM), and SoFi Technologies, Inc. (NASDAQ: SOFI), Hut 8 Mining Corp. (NASDAQ: HUT) is a good stock to invest in, according to market analysts.
10. Vinco Ventures, Inc. (NASDAQ: BBIG)
Number of Hedge Fund Holders: 5
Percentage Gain in past five days: 258.13%
Vinco Ventures, Inc. (NASDAQ: BBIG) is an acquisition company based in Pennsylvania that ranks 10th on the list of 12 best meme stocks to invest in. The company is involved in consumer product research and development and offers a web-based platform and operation for connecting product innovators with potential licensees.
Vinco Ventures, Inc. (NASDAQ: BBIG) shares increased 14.8% on September 8 following the release of its 2021 Annual Proxy details and a corporate update.
The company has a market cap of $719 million. The company’s second-quarter revenue came in at $2.69 million. Vinco Ventures, Inc.’s (NASDAQ: BBIG) gross margin increased to 36.06%, up from 22.59% in the same quarter in 2020. Shares of Vinco Ventures, Inc. (NASDAQ: BBIG) increased 450% in the past twelve months.
At the end of the second quarter of 2021, 5 hedge funds in the database of Insider Monkey held stakes worth $3.26 million in Vinco Ventures, Inc. (NASDAQ: BBIG), up from 1 in the previous quarter worth $59,000.
Just like GameStop Corp. (NYSE: GME), AMC Entertainment Holdings, Inc. (NYSE: AMC), Clover Health Investments, Corp. (NASDAQ: CLOV), Palantir Technologies Inc. (NYSE: PLTR), Affirm Holdings, Inc. (NASDAQ: AFRM), and SoFi Technologies, Inc. (NASDAQ: SOFI), Vinco Ventures, Inc. (NASDAQ: BBIG) is gaining popularity among Reddit investors.
9. Dynavax Technologies Corporation (NASDAQ: DVAX)
Number of Hedge Fund Holders: 15
Percentage gain in the past month: 32.95%
Dynavax Technologies Corporation (NASDAQ: DVAX) is a California-based biopharmaceutical company, and it ranks 9th on the list of 12 best meme stocks to invest in. Dynavax Technologies Corporation (NASDAQ: DVAX) developed the HEPLISAV-B hepatitis B vaccine.
Dynavax Technologies Corporation (NASDAQ: DVAX) saw its stock rise 14.4% after Taiwan-based biotechnology company Medigen Vaccine Biologics Corporation announced the launch of their COVID-19 vaccine MVC-COV1901.
On August 31, H.C. Wainwright analyst Edward White maintained a Buy rating on Dynavax Technologies Corporation (NASDAQ: DVAX) and increased his price target to $23 per share from $20 previously, highlighting the company’s ingredient offering for COVID-19 vaccines.
The company has a market cap of $2.03 billion. In the second quarter of 2021, Dynavax Technologies Corporation (NASDAQ: DVAX) reported an EPS of $0.02, beating estimates by $0.06. The company’s second-quarter revenue came in at $52.77 million and beat revenue estimates by $4.27 million.
At the end of the second quarter of 2021, 15 hedge funds in the database of Insider Monkey held stakes worth $101 million in Dynavax Technologies Corporation (NASDAQ: DVAX), up from 14 in the previous quarter worth $81.3 million.
Out of the hedge funds being tracked by Insider Monkey, hedge fund firm Partner Fund Management is a leading shareholder in Dynavax Technologies Corporation (NASDAQ: DVAX), with 2,990,770 shares worth more than $29 million.
Just like GameStop Corp. (NYSE: GME), AMC Entertainment Holdings, Inc. (NYSE: AMC), Clover Health Investments, Corp. (NASDAQ: CLOV), Palantir Technologies Inc. (NYSE: PLTR), Affirm Holdings, Inc. (NASDAQ: AFRM), and SoFi Technologies, Inc. (NASDAQ: SOFI), Dynavax Technologies Corporation (NASDAQ: DVAX) is gaining momentum on the back of interest from Reddit investors.
8. AMC Entertainment Holdings, Inc. (NYSE: AMC)
Number of Hedge Fund Holders: 21
Percentage gain in the past month: 49.87%
Theatre giant AMC Entertainment Holdings, Inc. (NYSE: AMC) ranks 8th on the list of 12 best meme stocks to invest in. The Kansas-based movie house has operated 593 domestic theatres and 335 international theatres as of June 30, 2021.
AMC Entertainment Holdings, Inc. (NYSE: AMC) saw its stock rise 13% in the second week of September on the back of solid weekend box office results, with Shang-Chi and the Legend of the Ten Rings smashing holiday box office records with a $90 million four-day debut.
The company has a market cap of $22.60 billion. In the second quarter of 2021, AMC Entertainment Holdings, Inc. (NYSE: AMC) reported an EPS of -$0.71, beating estimates by $0.25. The company’s second-quarter revenue came in at $444.70 million and beat revenue estimates by $62.59 million. The stock has gained 58% in the previous months and 744% in the last twelve months.
At the end of the second quarter of 2021, 21 hedge funds in the database of Insider Monkey held stakes worth $404 million in AMC Entertainment Holdings, Inc. (NYSE: AMC), up from 19 in the previous quarter worth $34 million.
Out of the hedge funds being tracked by Insider Monkey, Illinois-based hedge fund firm Citadel Investment Group is a leading shareholder in AMC Entertainment Holdings, Inc. (NYSE: AMC) with 8,406,600 shares worth more than $476 million.
Heartland Advisors mentioned AMC Entertainment Holdings, Inc. (NYSE: AMC) in its Q2 2021 investor letter:
“AMC is up a whopping 2,500% since the beginning of the year. Even AMC management seems stunned by the mind-boggling rise in its shares as witnessed by the following quote from a prospectus the company filed to issue more shares.
‘We believe that the recent volatility and our current market prices reflect market and trading dynamics unrelated to our underlying business, or macro or industry fundamentals, and we do not know how long these dynamics will last.’
We too don’t believe that prices are tied to valuation metrics for the theater and entertainment company. At current levels, shares of AMC are trading at roughly 63X sales. It’s a steep price for a company that has been losing money for years and isn’t expected to turn a profit in the coming year. No wonder insiders have cashed in on the mania and unloaded over $200 million in stock since March.
Hope is not a strategy
While valuations for AMC are an extreme example, speculative fever is running rampant. Investors have been clamoring to pay premium prices in hopes that the current goldilocks moment of low interest rates, easy sales comparisons and low inflation will go on forever. The appetite for pricey unicorns in a quest for quick gains was a drag on performance for your portfolio, and the Fund modestly underperformed the benchmark for the period.
Despite stratospheric valuations in many areas of the market, attractive valuations still exist if you know where to look. A good place to start is among small caps.
Looking at price to sales metrics, as shown below, smaller businesses are trading at discount levels versus their large counterparts not seen since the dotcom bubble. Price to sales is one of the metrics we look at when examining businesses. Over the years, it has served as an effective tool in identifying compelling opportunities when incorporated with other fundamentals.”
7. Clover Health Investments, Corp. (NASDAQ: CLOV)
Number of Hedge Fund Holders: 23
Percentage gain in the past month: 94.89%
Clover Health Investments, Corp. (NASDAQ: CLOV) is a Tennessee-based healthcare company, and it ranks 7th on the list of 12 best meme stocks to invest in. Clover Health Investments, Corp. (NASDAQ: CLOV) provides health plans to Medicare-eligible clients.
On September 2, Clover Health Investments, Corp. (NASDAQ: CLOV) received a Neutral rating and a $10 price target from Citi analyst Ralph, noting the company’s Medicare Advantage penetration.
The company has a market cap of $3.63 billion. In the second quarter of 2021, Clover Health Investments, Corp. (NASDAQ: CLOV) reported an EPS of -$0.78, missing estimates by -$0.64. The company’s second-quarter revenue came in at $412.47 million, an increase of 140% year over year, and beat revenue estimates by $207.09 million.
At the end of the second quarter of 2021, 23 hedge funds in the database of Insider Monkey held stakes worth $1.41 billion in Clover Health Investments, Corp. (NASDAQ: CLOV).
Out of the hedge funds being tracked by Insider Monkey, San Francisco-based hedge fund firm Greenoaks Capital is a leading shareholder in Clover Health Investments, Corp. (NASDAQ: CLOV), with 96,331,338 shares worth more than $1.28 billion.
6. Cameco Corporation (NYSE: CCJ)
Number of Hedge Fund Holders: 25
Percentage gain in the past month: 38.96%
Cameco Corporation (NYSE: CCJ) is a Canadian uranium producer, and it ranks 6th on the list of 12 best meme stocks to invest in. Cameco Corporation (NYSE: CCJ) sells uranium to be used as fuel in nuclear power reactors.
On September 7, Raymond James analyst Brian McArthur maintained an Outperform rating on Cameco Corporation (NYSE: CCJ) and increased his price target to C$29 per share from C$25 previously. Cameco Corporation (NYSE: CCJ) saw its shares rise 6% on September 10 as uranium prices rose and uranium stocks rallied.
The company has a market cap of $9.73 billion. In the second quarter of 2021, Cameco Corporation (NYSE: CCJ) reported an EPS of -$0.08, missing estimates by -0.03. The company’s revenue in the second quarter came in at $286.50 million. The stock has gained 82%, year to date, and 123% in the previous year.
At the end of the second quarter of 2021, 25 hedge funds in the database of Insider Monkey held stakes worth $587 million in Cameco Corporation (NYSE: CCJ), down from 30 hedge funds in the previous quarter worth $492 million.
Out of the hedge funds being tracked by Insider Monkey, Florida-based investment firm Kopernik Global Investors is a leading shareholder in Cameco Corporation (NYSE: CCJ) with 9.2 million shares worth more than $175 million.
5. Affirm Holdings, Inc. (NASDAQ: AFRM)
Number of Hedge Fund Holders: 25
Percentage gain in the past month: 88.68%
Affirm Holdings, Inc. (NASDAQ: AFRM) is a California-based fintech company that ranks 5th on the list of 12 best meme stocks to invest in. Affirm Holdings, Inc. (NASDAQ: AFRM) runs a digital and mobile-first commerce platform in the US and Canada.
On September 10, BofA analyst Jason Kupferberg maintained a Buy rating on Affirm Holdings, Inc. (NASDAQ: AFRM) and increased his price target to $119 per share from the previous $82 following the company’s Q4 report and FY’22 guidance.
The company has a market cap of $24.67 billion. In the third quarter of 2021, Affirm Holdings, Inc. (NASDAQ: AFRM) reported an EPS of -$1.00, missing estimates by -$0.73. The company’s third-quarter revenue came in at $230.66 million and beat revenue estimates by $32.45 million.
At the end of the second quarter of 2021, 25 hedge funds in the database of Insider Monkey held stakes worth $823 million in Affirm Holdings, Inc. (NASDAQ: AFRM), down from 32 in the previous quarter worth $582 million.
Out of the hedge funds being tracked by Insider Monkey, New York-based hedge fund firm Thrive Capital is a leading shareholder in Affirm Holdings, Inc. (NASDAQ: AFRM) with 3,935,366 shares worth more than $265 million.
4. Palantir Technologies Inc. (NYSE: PLTR)
Number of Hedge Fund Holders: 26
Percentage gain in the past month: 14.66%
Software firm Palantir Technologies Inc. (NYSE: PLTR) ranks 4th on the list of 12 best meme stocks to invest in. Palantir Technologies Inc. (NYSE: PLTR) develops software solutions by using AI and machine learning.
On August 13, Wolfe Research analyst Alex Zukin maintained a Peer Perform rating on Palantir Technologies Inc. (NYSE: PLTR) and increased his price target to $25 per share from the previous $20, following the company’s strong Q2 results.
The company has a market cap of $52 billion. In the second quarter of 2021, Palantir Technologies Inc. (NYSE: PLTR) reported an EPS of $0.04, beating estimates by $0.01. The company’s second-quarter revenue came in at $375.64 million, an increase of 49.1% year over year, and beat revenue estimates by $14.54 million. The stock has gained 12%, year to date.
At the end of the second quarter of 2021, 26 hedge funds in the database of Insider Monkey held stakes worth $1.36 billion in Palantir Technologies Inc. (NYSE: PLTR), down from 32 in the previous quarter worth $1.14 billion.
Out of the hedge funds being tracked by Insider Monkey, New York-based hedge fund firm ARK Investment Management is a leading shareholder in Palantir Technologies Inc. (NYSE: PLTR) with 30,681,798 shares worth more than $808 million.
In its Q2 2021 investor letter, Guardian Fund mentioned Palantir Technologies Inc. (NYSE: PLTR) and discussed its stance on the firm. Here is what the fund said:
“The success of the private sector to innovate in order to help people through the lockdowns and to produce vaccines at record speed at scale has been impressive. The fact that almost every public institution was struggling to be effective no matter how hard some of the people worked, shows the fundamental need of the public sector to become data-driven and invest in data infrastructure.
Government institutions have to partner with enterprises such as Palantir to become digital native. The public sector will always struggle to attract the most talented engineers as compensations cannot be justified with tax money and therefore this must be a partnership with specialized private enterprises. This is a great opportunity for Palantir especially as it has already
shown to be capable of working with demanding and complex public institutions entrusting it to work on the most critical and sensitive matters.
The news section of Palantir’s website gives insight in where new business is coming from. The main opportunity is in enterprise software and the faster onboarding time and increased self-service of clients is a positive sign. We believe Palantir is becoming one of the more important global software companies.
In addition, Palantir has quietly become a significant investor, investing well over USD 200 million in eight companies. Thereby, it is following the lead of companies like Tencent, Alphabet, and Shopify of establishing valuable investment portfolios.”
3. The Beauty Health Company (NASDAQ: SKIN)
Number of Hedge Fund Holders: 33
Percentage gain in the past month: 39.52%
The Beauty Health Company (NASDAQ: SKIN) is an aesthetic technology manufacturer based in California that ranks 3rd on the list of 12 best meme stocks to invest in. The Beauty Health Company (NASDAQ: SKIN) sells non-invasive skin-enhancing and detoxification systems globally.
On September 1, Piper Sandler analyst Erinn Murphy maintained an Overweight rating on The Beauty Health Company (NASDAQ: SKIN) and increased his price target to $33 per share from the previous $27.
The company has a market cap of $3.71 billion. In the second quarter of 2021, The Beauty Health Company (NASDAQ: SKIN) reported an EPS of $0.09, beating estimates by $0.07. The company’s second-quarter revenue came in at $66.51 million and beat revenue estimates by $17.30 million.
At the end of the second quarter of 2021, 33 hedge funds in the database of Insider Monkey held stakes worth $665 million in The Beauty Health Company (NASDAQ: SKIN), up from 0 in the previous quarter.
Out of the hedge funds being tracked by Insider Monkey, San Francisco-based hedge fund firm Redmile Group is a leading shareholder in The Beauty Health Company (NASDAQ: SKIN) with 6,353,246 shares worth more than $106 million.
2. SoFi Technologies, Inc. (NASDAQ: SOFI)
Number of Hedge Fund Holders: 39
Percentage gain in the past month: 2%
SoFi Technologies, Inc. (NASDAQ: SOFI) is a San Francisco-based fintech company and it ranks 2nd on the list of 12 best meme stocks to invest in. SoFi Technologies, Inc. (NASDAQ: SOFI) manages an online finance platform.
On September 9, Credit Suisse analyst Timothy Chiodo initiated coverage of SoFi Technologies, Inc. (NASDAQ: SOFI) with a Neutral rating and a $16.50 price target.
The company has a market cap of $12.12 billion. In the second quarter of 2021, SoFi Technologies, Inc. (NASDAQ: SOFI) reported an EPS of -$0.48, missing estimates by -$0.42. The company’s second-quarter revenue came in at $231.27 million and beat revenue estimates by $12.67 million. The stock has gained 23%, year to date.
At the end of the second quarter of 2021, 39 hedge funds in the database of Insider Monkey held stakes worth $1.78 billion in SoFi Technologies, Inc. (NASDAQ: SOFI), up from 0 in the previous quarter.
Out of the hedge funds being tracked by Insider Monkey, California-based hedge fund firm Silver Lake Partners is a leading shareholder in SoFi Technologies, Inc. (NASDAQ: SOFI) with 38,515,543 shares worth more than $738 million.
1. Academy Sports and Outdoors, Inc. (NASDAQ: ASO)
Number of Hedge Fund Holders: 45
Percentage gain in the past month: 27.77%
Topping the list of 12 best meme stocks to invest in is Academy Sports and Outdoors, Inc. (NASDAQ: ASO). The company is based in Texas and offers sporting goods and outdoor recreational products in the US.
On September 10, Loop Capital analyst Daniel Adam maintained a Buy rating on Academy Sports and Outdoors, Inc. (NASDAQ: ASO) and increased his price target to $58 per share from $45 previously, highlighting the company’s solid Q2 results fueled by consistently strong demand in the categories of fitness, footwear, apparel, and team sports.
The company has a market cap of $4.1 billion. In the second quarter of 2021, Academy Sports and Outdoors, Inc. (NASDAQ: ASO) reported an EPS of $2.34, beating estimates by $0.92. The company’s revenue in the second quarter came in at $1.79 billion and beat estimates by $125.64 million. The stock has gained 121%, year to date.
At the end of the second quarter of 2021, 45 hedge funds in the database of Insider Monkey held stakes worth $709 million in Academy Sports and Outdoors, Inc. (NASDAQ: ASO), up from 37 in the previous quarter worth $409 million.
Out of the hedge funds being tracked by Insider Monkey, a New York-based hedge fund firm, Samlyn Capital is a leading shareholder in Academy Sports and Outdoors, Inc. (NASDAQ: ASO) with 2,759,933 shares worth more than $113 million.
You can also take a peek at Billionaire Jeffrey Talpins’ Top 5 Stocks Picks and Top 10 Stocks to Buy Today According to Stephen Perkins’ Toronado Partners.
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Disclosure: None. 12 Best Meme Stocks to Invest In is originally published on Insider Monkey.
