Markets are euphoric after clear signals from the Fed that it is ready to start cutting interest rates next year. Nick Timiraos, Chief Economics Correspondent at the Wall Street Journal, talked about an interesting point in a program on CNBC on December 14. Timiraos said that if we analyze CPI and PPI reports of the past few months, the six-month annualized inflation rate comes out to be a little bit below 2%, which is the Fed’s original inflation target. The journalist said that the Fed seems to have “picked up on that” important data point and categorically signaled the beginning of interest rate cuts next year. Timiraos believes that this is clearly the beginning of a pivot from the Fed and chances of another rate hike are thin.
“Bears are Trapped”
Jim Cramer, like many other financial analysts and investors, is also jubilant over the Fed’s signal. Cramer said that the bears never embraced the possibility that Jerome Powell could “engineer” a soft landing. He said that three rate cuts would mean “smooth sailing” for stocks. Cramer said that Powell’s worries that the economy is slowing is “good news” and the Fed is now investors’ “pal” instead of their “enemy.”
“Powell does not want to declare victory, I’ll declare victory for him,” Cramer said.
Methodology
As the Wall Street paints the town red, it’s time to look at some stocks Redditors as well as billionaires love. For this article we first listed down all stocks Redditors have been piling into this year. From this list we selected 12 stocks with the highest number of billionaire investors. We used Insider Monkey’s database of billionaire-owned stocks to find the number of billionaire investors for each stock. Some notable names in the list include Apple Inc (NASDAQ:AAPL), NVIDIA Corporation (NASDAQ:NVDA) and Microsoft Corporation (NASDAQ:MSFT).
Photo by AlphaTradeZone
12. Nio Inc – ADR (NYSE:NIO)
Number of Billionaire Investors: 8
Chinese EV company Nio Inc – ADR (NYSE:NIO) shares have lost about 24% year to date through December 13. Nio Inc – ADR (NYSE:NIO) recently announced to lay off 10% of its workforce, with Bloomberg reporting that Nio Inc – ADR (NYSE:NIO) plans to cut more jobs. These layoffs could target 20% to 30% of the total workforce, according to the Bloomberg report.
Out of the billionaires tracked by Insider Monkey, 8 billionaires had stakes in the Chinese company Nio Inc – ADR (NYSE:NIO). The biggest stakeholder of Nio Inc – ADR (NYSE:NIO) was Jos Shaver’s Electron Capital Partners which owns a $38 million stake in Nio Inc – ADR (NYSE:NIO).
11. AMC Entertainment Holdings Inc (NYSE:AMC)
Number of Billionaire Investors: 10
AMC Entertainment Holdings Inc (NYSE:AMC) remains popular on Reddit, even though the stock has seen a decline in its favorability on the social platform as Redditors feel the heat of the broader market decline and pile into safer stocks. In November AMC Entertainment Holdings Inc (NYSE:AMC) posted strong Q3 results. Adjusted EPS in the period came in at -$0.09, beating estimates by $0.16. Revenue in the period jumped about 45.2% year over year to $1.41 billion, surpassing estimates by $150 million.
A total of 10 billionaires tracked by Insider Monkey had stakes in AMC Entertainment Holdings Inc (NYSE:AMC). Some famous billionaires having stakes in AMC Entertainment Holdings Inc (NYSE:AMC) include D. E. Shaw, Ken Griffin, Mario Gabelli and Cliff Asness.
10. Lululemon Athletica Inc (NASDAQ:LULU)
Number of Billionaire Investors: 14
Lululemon Athletica Inc (NASDAQ:LULU) ranks 10th in our list of the best Reddit stocks according to billionaires. Recently, Lululemon Athletica Inc (NASDAQ:LULU) posted third quarter results. Adjusted EPS in the period came in at $2.53, beating estimates by $0.25. Revenue in the quarter increased by about 18.3% year over year to $2.2 billion, beating estimates by $10 million.
Goldman Sachs, in its 2024 outlook report, pointed to some trends that are going to benefit apparel and consumer stocks, including Lululemon Athletica Inc (NASDAQ:LULU).
“While near-term trends are likely still-volatile, we believe stronger consumer cash flow growth, healthier inventory levels, improved costing, and easier compares provide opportunities for stocks to outperform, led by margin-driven upside with optionality for earnings growth acceleration should top line sales growth inflect,” the report said.
In addition to LULU, billionaires are also piling into Apple Inc (NASDAQ:AAPL), NVIDIA Corporation (NASDAQ:NVDA) and Microsoft Corporation (NASDAQ:MSFT)
9. SPDR S&P 500 ETF Trust (NYSEARCA:SPY)
Number of Billionaire Investors: 15
Reddit investors are no longer betting on just meme stocks or companies like AMC Entertainment Holdings Inc (NYSE:AMC) or Gamestop. Wide market downturns have a caused a rise in popularity of broader market funds on the social media platform. That’s why SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is among the most popular ETFs on the platform.
Insider Monkey’s billionaire database shows that 15 billionaires had stakes in SPDR S&P 500 ETF Trust (NYSEARCA:SPY). Some notable of these billionaires are Israel Englander, Ken Griffin and Ray Dalio.
8. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Billionaire Investors: 17
Advanced Micro Devices, Inc. (NASDAQ:AMD) has time and again proved that it has the capability to catch up with its competition and do it fast. Advanced Micro Devices, Inc. (NASDAQ:AMD) recently garnered a lot of praise from the Wall Street after it revealed new chips that are used to train LLMs. Advanced Micro Devices, Inc.’s (NASDAQ:AMD) Instinct MI300X accelerator and the Instinct M1300A accelerated processing unit (APU) are expected to compete with NVIDIA Corporation (NASDAQ:NVDA) which has been flying higher and higher amid a wider notion that it dominates the AI chips market.
A total of 17 billionaires in Insider Monkey’s database reported owning stakes in Advanced Micro Devices, Inc. (NASDAQ:AMD). Some famous billionaires with stakes in Advanced Micro Devices, Inc. (NASDAQ:AMD) are Ken Fisher Philippe, Laffont and Israel Englander.
Artisan Global Opportunities Fund made the following comment about Advanced Micro Devices, Inc. (NASDAQ:AMD) in its Q2 2023 investor letter:
“Among our top contributors were Advanced Micro Devices, Inc. (NASDAQ:AMD), NU Holdings and Netflix. AMD’s data center CPUs are used in the cloud service provider (CSP) servers. In addition to the broader secular tailwind from cloud adoption, the company has a performance and pricing advantage over Intel, which we believe will enable it to continue capturing market share. However, the recent stock price rally was due to growing excitement around the company’s AI exposure. It will launch its new MI300 graphics processing unit (GPU) chip later this year to compete against the dominant market leader NVIDIA. Similar to its approach that won market share from Intel within the CPU market, AMD’s product will aim to provide similar performance at a more attractive price. AMD is already working with Microsoft and Meta, while Amazon publicly stated that it is evaluating AMD’s inferencing chips. Using assumptions around the total GPU market size, potential market share gains and price points, our research indicates this could be a $20 billion opportunity for AMD. That would nearly double its revenue. While the company has not historically missed many deadlines, there is execution risk as it works to manufacture and distribute these complex chips at scale, which, combined with an elevated valuation after the stock’s strong performance run, led us to trim the position.”
7. Broadcom Inc (NASDAQ:AVGO)
Number of Billionaire Investors: 17
Analysts and investors are watching Broadcom Inc (NASDAQ:AVGO) as they believe Broadcom Inc (NASDAQ:AVGO) would be one of the beneficiaries of the AI boom. Recently, the stock jumped after Citi started covering the stock with a $1,100 price target. Citi said Broadcom Inc (NASDAQ:AVGO) posted strong quarterly results which were helped by AI.
Analysts at Citi said that Broadcom Inc’s (NASDAQ:AVGO) sales from AI infrastructure could double from $4 billion in fiscal 2023 to over $8 billion in fiscal 2024.
ClearBridge Multi Cap Growth Strategy made the following comment about Broadcom Inc. (NASDAQ:AVGO) in its Q2 2023 investor letter:
“While the ClearBridge Multi Cap Growth Strategy has limited mega cap exposure, which has been a recent headwind to relative performance, we own several companies that stand to benefit from the explosive growth in generative AI. These holdings play key roles in building out the necessary infrastructure and helping customers leverage capabilities enabled by this emerging technology.
Semiconductor and software solutions provider Broadcom Inc. (NASDAQ:AVGO), for example, is an important supplier of networking chips that power ethernet switches and routers for connectivity between AI servers. The company sees quarterly revenue from this part of their business exceeding $1 billion in their fiscal third quarter, on a trajectory toward doubling over the course of the year.”
6. Tesla Inc (NASDAQ:TSLA)
Number of Billionaire Investors: 18
EV giant Tesla Inc (NASDAQ:TSLA) is among the most popular stocks on Reddit. Tesla Inc (NASDAQ:TSLA) is also gaining popularity among hedge funds and elite money managers. Despite concerns around the broader EV industry amid growth issues, Tesla Inc (NASDAQ:TSLA) stock managed to gain 128% year to date through December 13. Piper Sandler analyst Alexander Potter recently said in a note that while he believes the EV industry could face challenges in the short-term, his bullish thesis on the industry remains unchanged:
“While our new forecast does imply a modestly slower ramp between now and 2030, it’s important to note that our long-term expectations are unchanged. Specifically, we still think the auto sector will eventually reach 100% EV penetration, and we disagree with the notion that EV demand is approaching exhaustion,” Potter noted.
As of the end of the September quarter, 18 billionaires reported owning stakes in Tesla Inc (NASDAQ:TSLA).
In addition to Tesla, billionaires and Redditors also like Apple Inc (NASDAQ:AAPL), NVIDIA Corporation (NASDAQ:NVDA) and Microsoft Corporation (NASDAQ:MSFT).
Here is what White Brook Capital has to say about Tesla, Inc. (NASDAQ:TSLA) in its Q3 2023 investor letter:
“The magnificent seven, that underpin the S&P 500 performance, which includes Tesla, Inc. (NASDAQ:TSLA), now comprise almost 30% of the market capitalization of the S&P500. At least three of the seven stocks have heightened downside risk and suffer from already high penetration, weakening end markets, competitive risk, and lofty valuation. They have been remarkably resilient to increased interest rates and the potential for slowing growth. Small and midcap stocks, on the other hand, have been systemically penalized by fears of recession and continue to price that eventuality even as significantly better outcomes have become more probable. Today, it’s relatively easy to find attractive investments in this segment.”
5. Apple Inc (NASDAQ:AAPL)
Number of Billionaire Investors: 19
Apple Inc (NASDAQ:AAPL) ranks 5th in our list of the best Reddit stocks loved by billionaires. Earlier this month, the Wall Street Journal reported that Apple Inc (NASDAQ:AAPL) and its suppliers are planning to produce 50 million to 60 million iPhones in India per year over the next 2-3 years.
Out of the 910 hedge funds tracked by Insider Monkey, 134 hedge funds had stakes in Apple Inc (NASDAQ:AAPL). A total of 19 billionaires reported having stakes in Apple Inc (NASDAQ:AAPL) as of the end of the third quarter.
Hayden Capital made the following comment about Apple Inc. (NASDAQ:AAPL) in its third 2023 investor letter:
“Even Berkshire Hathaway’s most famous investment of the last decade – Apple Inc. (NASDAQ:AAPL) – was based on a similar set up. When Berkshire invested in 2016, Apple’s subscription revenues were just starting to cross ~10% of total revenues. Today, that figure is ~25%.
While operating income has grown +90% from 2016 to 2023, the valuation multiple itself has expanded by ~300%, from ~6x EV/EBIT to ~24x EV/EBIT today.
Investors have evolved their perception of Apple’s products – from that of a “fad” hardware company at risk of competition, to that of a “consumer staple”, a necessary part of a household’s budget…” (Click here to read the full text)
4. NVIDIA Corporation (NASDAQ:NVDA)
Number of Billionaire Investors: 29
NVIDIA Corporation (NASDAQ:NVDA) is gaining popularity across the board as it continues to see and expect huge demand for its AI chips.
A total of 29 billionaires in Insider Monkey’s database had stakes in NVIDIA Corporation (NASDAQ:NVDA). Some famous billionaires with stakes in NVIDIA Corporation (NASDAQ:NVDA) are Rajiv Jain, Ken Fisher, Ken Griffin and Steve Cohen.
Here is what White Brook Capital has to say about NVIDIA Corporation (NASDAQ:NVDA) in its Q3 2023 investor letter:
“The magnificent seven, that underpin the S&P 500 performance, which includes NVIDIA Corporation (NASDAQ:NVDA), now comprise almost 30% of the market capitalization of the S&P500. At least three of the seven stocks have heightened downside risk and suffer from already high penetration, weakening end markets, competitive risk, and lofty valuation. They have been remarkably resilient to increased interest rates and the potential for slowing growth. Small and midcap stocks, on the other hand, have been systemically penalized by fears of recession and continue to price that eventuality even as significantly better outcomes have become more probable. Today, it’s relatively easy to find attractive investments in this segment.”
3. Meta Platforms Inc (NASDAQ:META)
Number of Billionaire Investors: 32
Among the list of billionaires having stakes in Meta Platforms Inc (NASDAQ:META), Rajiv Jain, who has a net worth of $3.2 billion, takes the lead as his hedge fund GQG Partners owns a $3.3 billion stake in Meta Platforms Inc (NASDAQ:META).
Here is what Claret Asset Management has to say about Meta Platforms, Inc. (NASDAQ:META) in its Q3 2023 investor letter:
“We have mentioned in the last letter that the “magnificent seven”, including Meta Platforms Inc.,dominated the performance of the S&P 500. We might have left you with the feeling that we are bearish because we don’t find the Magnificent 7 attractive. Let us make it clear: we are just not so pessimistic as to believe there are only 7 growth opportunities in the entire global equity market. In fact, we are optimists and think opportunity is abundant. Just not in everyone’s current 7 favorite stocks.”
2. Amazon.com Inc (NASDAQ:AMZN)
Number of Billionaire Investors: 33
Amazon.com Inc (NASDAQ:AMZN) was a key part of the Magnificent Seven group that gained in 2023. Analysts believe Amazon has more room to run as Amazon.com Inc (NASDAQ:AMZN) would see huge demand of its AI products and features offered under the AWS umbrella. Amazon.com Inc (NASDAQ:AMZN) is also among the stocks loved by Jim Cramer.
Here is what White Brook Capital has to say about Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2023 investor letter:
“The magnificent seven, that underpin the S&P 500 performance, which includes Amazon.com, Inc. (NASDAQ:AMZN), now comprise almost 30% of the market capitalization of the S&P500. At least three of the seven stocks have heightened downside risk and suffer from already high penetration, weakening end markets, competitive risk, and lofty valuation. They have been remarkably resilient to increased interest rates and the potential for slowing growth.”
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Billionaire Investors: 34
Microsoft Corporation (NASDAQ:MSFT) tops our list of the best Reddit stocks to buy according to billionaires. Out of the 910 hedge funds tracked by Insider Monkey, 306 hedge funds had stakes in Microsoft Corporation (NASDAQ:MSFT). Our data shows that 34 of these funds were led or founded by billionaires.
Here is what White Brook Capital has to say about Microsoft Corporation (NASDAQ:MSFT) in its Q3 2023 investor letter:
“The magnificent seven, that underpin the S&P 500 performance, which includes Microsoft Corporation (NASDAQ:MSFT), now comprise almost 30% of the market capitalization of the S&P500. At least three of the seven stocks have heightened downside risk and suffer from already high penetration, weakening end markets, competitive risk, and lofty valuation. They have been remarkably resilient to increased interest rates and the potential for slowing growth. Small and midcap stocks, on the other hand, have been systemically penalized by fears of recession and continue to price that eventuality even as significantly better outcomes have become more probable. Today, it’s relatively easy to find attractive investments in this segment.”
Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also look at the 10 Reddit Stocks with Biggest Upside and the 12 Best Reddit Stocks To Buy Now.
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- 10 Reddit Stocks with Biggest Upside
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Disclosure. None. 12 Best Reddit Stocks According to Billionaires was initially published on Insider Monkey.
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