In this article, we discuss 10 Reddit WallStreetBets stocks that are rising.
WallStreetBets is perhaps the most active investing forum on Reddit, where retail investors frequently discuss their latest calls, celebrate their gains, and bemoan their losses. WallStreetBets came into the spotlight during 2021, when the GameStop Corp. (NYSE:GME) short squeeze led to losses worth billions of dollars for the hedge fund managers who bet against the stock. Reddit’s WallStreetBets is famously referred to as the “GameStop Kingmaker”.
Reddit investors have changed the face of retail investing, and the community has proven to be a resilient force in the stock market. In 2021, the forum reported more than 100,000 active communities and there were over 430 million monthly active users.
While Reddit investors and the decade-old WallStreetBets forum has been criticized for creating meme stocks and driving up the prices of neglected stocks to insane levels, it shows the magnitude of influence that the Reddit community holds in the market. As the Reddit IPO nears, there are concerns in the market that Redditors will flock to the stock and drive the valuation and price up on hype alone, much like AMC Entertainment Holdings, Inc. (NYSE:AMC) and GameStop Corp..
In the last week, Redditors have been focused on a bunch of stocks that are gaining traction in the market, including Shopify Inc. (NYSE:SHOP), Alibaba Group Holding Limited (NYSE:BABA), and Tesla, Inc. (NASDAQ:TSLA), among others discussed in detail below.
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Our Methodology
We searched the Reddit WallStreetBets forum, picking stocks that have captured the interest of most Redditors over the past few days. These stocks have gained momentum in the market, and we have mentioned the increase in share price over the last five days as of March 23.
Data from 900+ elite hedge funds tracked by Insider Monkey in Q4 2021 was used to identify the number of hedge funds that hold stakes in each firm.
Reddit WallStreetBets Stocks That Are Rising
10. ContextLogic Inc. (NASDAQ:WISH)
Gain in Share Price in the Last 5 Days as of March 23: 25.13%
Number of Hedge Fund Holders: 13
ContextLogic Inc. (NASDAQ:WISH) is an e-commerce company with primary operations in Europe, North America, and South America. The digital marketplace, headquartered in San Francisco, connects merchants and users via its website. The stock has soared 25.13% in the last five days.
Although Redditors are flocking to ContextLogic Inc. to benefit from the upside in shares, Loop Capital analyst Laura Champine on March 22 downgraded ContextLogic Inc. to Hold from Buy with a price target of $2, down from $4. The analyst is concerned about inflation and the company’s increased exposure to Europe. It also appears that the management has its “hands full”. However, Champine believes that ContextLogic Inc. is “reasonably valued”, and the company is lowering advertising expenses and working on the platform’s value proposition, but at 0.4-times her expected 2022 revenue.
The hedge fund sentiment around ContextLogic Inc. is mixed. In Q4 2021, 13 funds reported owning stakes worth roughly $28 million in ContextLogic Inc., compared to 14 funds in the previous quarter, holding stakes in the company valued at $17 million.
Among the hedge funds tracked by Insider Monkey, Maple Rock Capital was the leading shareholder of ContextLogic Inc. in Q4, with 3.2 million shares worth over $10 million.
In addition to Shopify Inc., Alibaba Group Holding Limited, and Tesla, Inc., ContextLogic Inc. is currently popular among Redditors.
9. GameStop Corp. (NYSE:GME)
Gain in Share Price in the Last 5 Days as of March 23: 65.69%
Number of Hedge Fund Holders: 14
GameStop Corp. is an American retailer of gaming merchandise, video games, consumer electronics, and relevant accessories.
GameStop Corp. is hot on Reddit again, as the stock soared 65.69% in the last five days, and multiple Redditors posted gains worth thousands of dollars from their bullish calls. GameStop Corp. soared on March 23 when chairman Ryan Cohen purchased 100,000 shares of the company priced between $96.81 to $108.82.
On March 18, Wedbush analyst Michael Pachter lowered the price target on GameStop Corp. to $30 from $45 and kept an Underperform rating on the shares. The analyst believes that GameStop Corp. is on the right path with expanding its product offering to include PC games and accessories. However, he thinks there will be limited success in developing an NFT marketplace by GameStop Corp.. The share price also trades at levels that are disconnected from the business fundamentals and are sustained solely due to ongoing support from certain retail investors, the analyst added.
In the fourth quarter of 2021, 14 hedge funds were long GameStop Corp., up from 9 funds in the prior quarter. Citadel Investment Group is a prominent shareholder of the company, with 120,085 shares worth $17.8 million.
Here is what Bireme Capital has to say about GameStop Corp. in its Q3 2021 investor letter:
“Remarkably, Reddit traders have initiated not one but two stratospheric climbs in the GME share price since the start of the year.
In January, the shares reached $300, up from $10 last October. This surge entered the national conversation as almost no other stock run in history, prompting both a Congressional investigation and a mention on Saturday Night Live. Short interest collapsed from 71m shares to 10m shares and eventually the share price did too, settling at $50 by the end of February. What’s more impressive is that the Reddit crowd has fueled a second rise in GameStop Corp., with shares now trading at over $170.
Gamestop (GME) has no realistic chance of meeting the expectations implied by these prices.
Gamestop’s current market capitalization is about $13.5b. This means that one day the firm will likely need to earn >$500m in profits (implying a ~4% earnings yield) to generate a positive return. But Gamestop has never earned $500m in a single year. The company’s peak profitability was way back in 2016 when it netted $415m. Profits have been declining ever since, including massive operating losses of $400m in 2019 and $238m in 2020. Revenues have declined precipitously as well, from $8.3b in 2018, to $6.5b in 2019, to just $5.1b in 2020.”
8. Upstart Holdings, Inc. (NASDAQ:UPST)
Gain in Share Price in the Last 5 Days as of March 23: 13.02%
Number of Hedge Fund Holders: 20
Upstart Holdings, Inc. (NASDAQ:UPST) was founded in 2012 and is headquartered in San Mateo, California. Upstart Holdings, Inc. is a financial technology company that leverages artificial intelligence to provide lending platforms in the United States.
On February 15, Upstart Holdings, Inc. reported its fourth quarter earnings, posting an EPS of $0.89, topping analysts’ predictions by $0.38. The Q4 revenue came in at 304.85 million, up 251.57% year-over-year, outperforming estimates by $42 million.
Upstart Holdings, Inc. gained 7.5% on March 9 after the company launched its new mobile-first auto retail digital AI platform for car dealers. In the last five days, the stock has climbed 13%, which has rallied the interest of Redditors.
Wedbush analyst David Chiaverini downgraded Upstart Holdings, Inc. on March 22 to Underperform from Neutral with a price target of $75, down from $110. The analyst believes that Upstart Holdings, Inc. has yet to face a true recession, which means its business model has not been battle-tested. In addition to that, the weakening delinquency trends paired with macro and geopolitical risks could result in lower appetite from Upstart Holdings, Inc.’s credit buyers and the securitization market.
Among the hedge funds tracked by Insider Monkey, Dan Loeb’s Third Point is the largest shareholder of Upstart Holdings, Inc., owning 4 million shares worth $605.2 million. Overall, 20 hedge funds were bullish on the stock at the end of the fourth quarter of 2021.
Here is what Alger Spectra Fund has to say about Upstart Holdings, Inc. in its Q4 2021 investor letter:
“Upstart operates a cloud-based artificial intelligence (Al) lending platform. The platform aggregates consumer demand for loans and connects it to the company’s network of Al-enabled bank partners. The technology connects consumers, banks and institutional investors through a shared Al lending platform. The company continues to improve its various Al-driven models, which has significantly widened the top of the application funnel, or the overall universe of loan applicants. Additionally, more accurate predictions on risk can lead to higher approval rates, which tap into larger lead pools and may ultimately translate into higher loan volume and revenue. While Upstart Holdings, Inc.’s share price has given back a significant component of its meteoric rise since the company’s December 2020 IPO, the price remains up approximately 150% for the year. We maintain that Upstart Holdings, Inc. is an innovative and disruptive Al company. In our view, fundamentals remain strong, with revenues growing 250% year over year, driven by 244% year-over-year growth of loan volume, which exceeded consensus estimates. Contribution margin, which is a measure of how products contribute to the overall profits of a company, was 46%. We believe Upstart is appropriately balanced between maintaining profitability while driving growth.”
7. DiDi Global Inc. (NYSE:DIDI)
Gain in Share Price in the Last 5 Days as of March 23: 55.51%
Number of Hedge Fund Holders: 21
DiDi Global Inc. (NYSE:DIDI) is a Chinese mobility technology platform offering ride hailing and food delivery services. The company operates in China, Brazil, Mexico, and internationally. The stock has jumped over 55.5% in the past five days, as the Chinese tech crackdown nears an end and the government supports companies that are listed overseas.
Bernstein analyst Cherry Leung initiated coverage of DiDi Global Inc. on February 14 with an Outperform rating and a $6.20 price target. The company’s “regulatory storm is largely over” and it is also working to increase license compliance, the analyst told investors in a bullish note. In addition to that, DiDi Global Inc. maintains a “sturdy leadership position during new customer suspension,” the analyst noted.
According to the fourth quarter database of Insider Monkey, Philippe Laffont’s Coatue Management is the largest shareholder of DiDi Global Inc., with 40.4 million shares worth $201.6 million. Overall, 21 hedge funds were bullish on DiDi Global Inc., up from 15 funds in the earlier quarter.
Here is what Davis Global Fund has to say about DiDi Global Inc. in its Q4 2021 investor letter:
“The second regulatory action took place shortly after the initial public offering of Didi Global, China’s ride-sharing leader, on the New York Stock Exchange (NYSE). In early July, the Cybersecurity Administration of China (CAC), implementing provisions from the new Data Security Law issued on June 10, announced that Didi will undergo a cybersecurity review, and further downloading of its app was suspended. Didi’s data privacy and collection policies, as well as data security considerations stemming from the company’s U.S. listing, were the focus of the review. On December 3, Didi announced that it planned to delist from the NYSE and relist in Hong Kong. The market understandably dislikes uncertainty, and it will take several months for the relisting process to be finalized. Over the long run, however, we believe a Hong Kong listing will resolve the CAC’s concerns around national data security, and it will provide a globally recognized primary listing venue, as it already does for other large Chinese internet companies such as Tencent and Meituan. Over time, the value of Didi, like any other company, will be determined by its business prospects and profitability rather than the location of its primary exchange listing.”
6. Palantir Technologies Inc. (NYSE:PLTR)
Gain in Share Price in the Last 5 Days as of March 23: 12.46%
Number of Hedge Fund Holders: 33
Palantir Technologies Inc. (NYSE:PLTR) is a Colorado-based provider of software platforms for the US intelligence industry to assist with counterterrorism initiatives. Redditors are pouring into Palantir Technologies Inc., and the stock has climbed close to 12.5% in the last few days.
On March 9, Piper Sandler analyst Weston Twigg initiated coverage of Palantir Technologies Inc. with an Overweight rating and a $15 price target. The analyst noted that Palantir Technologies Inc. is improving its operational effectiveness by leveraging software, AI, and data into “powerful, central IT solutions”. Additionally, the Ukraine war could result in quicker technology adoption by the U.S. and international government clients, the analyst contended.
Among the hedge funds tracked by Insider Monkey, 33 hedge funds reported owning stakes in Palantir Technologies Inc., compared to 35 funds in the prior quarter. ARK Investment Management is the biggest shareholder of the company, with a $642.5 million position.
In addition to Shopify Inc., Alibaba Group Holding Limited, and Tesla, Inc., Palantir Technologies Inc. is a notable Reddit stock currently trending in the news.
5. Roblox Corporation (NYSE:RBLX)
Gain in Share Price in the Last 5 Days as of March 23: 26.30%
Number of Hedge Fund Holders: 61
Roblox Corporation (NYSE:RBLX) is a California-based video game developer that provides users with 3D entertainment and learning experiences. The stock has climbed 26.30% in the last five days, and Roblox Corporation has been gaining the interest of Redditors.
On March 16, Stifel analyst Drew Crum lowered the price target on Roblox Corporation to $65 from $90 and kept a Buy rating on the shares after the company posted “mixed” KPIs in February. He expects improving bookings comps starting in late Q2 through the second half of the year and views the reward/risk as “better to the upside” with the pullback in the shares.
According to the Q4 database of Insider Monkey, 61 hedge funds were bullish on Roblox Corporation, compared to 50 funds in the prior quarter. Jim Simons’ Renaissance Technologies is the leading shareholder of the company, with 5.3 million shares worth $557 million.
Here is what Tao Value has to say about Roblox Corporation in its Q4 2021 investor letter:
“Roblox (RBLX) got significant more attention from both institutional & retail investors after Facebook announced to rename itself as Meta Platforms. I believe the price appreciation is largely attributed to the increased attention. On the business side, Roblox rolled out a few successful music events and also partnered with Netflix on testing long-form media consumption in the virtual world. Apple in its iOS 14.5 rolled out an impactful change for the digital advertising landscape by requiring all apps to ask users to “opt in”.
4. JD.com, Inc. (NASDAQ:JD)
Gain in Share Price in the Last 5 Days as of March 23: 3.78%
Number of Hedge Fund Holders: 67
JD.com, Inc. (NASDAQ:JD) is a Chinese e-commerce company that specializes in online retail and logistics solutions.
On March 10, JD.com, Inc. posted its fourth quarter results. The company reported earnings per share of $0.35, above market estimates by $0.08. Revenue over the period jumped 26.33% year-over-year to $42.64 billion, outperforming consensus by approximately $301 million.
JPMorgan analyst Andre Chang double downgraded JD.com, Inc. on March 14 to Underweight from Overweight with a price target of $35, down from $100. The analyst expects the sector-wide selloff to continue without valuation support in the short-term as risk management becomes the most important consideration among global investors in relation to their Chinese investments.
According to Insider Monkey’s Q4 database, Tiger Global Management held the biggest stake in JD.com, Inc., with 53.7 million shares worth $3.7 billion. Overall, 67 hedge funds were bullish on the stock at the end of December 2021.
Here is what Argosy Investors has to say about JD.com, Inc. in its Q3 2021 investor letter:
“We sold JD as a result of the furor over Chinese stocks during the quarter. We had been concerned about China’s lack of respect for investor rights for some time, and Beijing has become significantly more aggressive in asserting itself of late. In addition, the legal structure Chinese companies use to come public in the U.S., a Cayman Islands shell corporation leaves American investors with an unsure path to recovering value should these companies cease to trade on U.S. exchanges. Because of the uncertainty, we exited our position in JD completely. We still love JD’s long-term prospects, but we cannot estimate the legal/regulatory risk associated with these companies anymore. More broadly, we are freeing up cash for some other positions we already own which have declined in this market, and after additional review, remain attractive.”
3. Shopify Inc. (NYSE:SHOP)
Gain in Share Price in the Last 5 Days as of March 23: 14.92%
Number of Hedge Fund Holders: 86
Shopify Inc. is a Canadian e-commerce platform that engages with merchants worldwide to provide a wide variety of retail items to its customers. It also provides merchant and payments solutions via its website and application. Redditors are loading up on the stock, and Shopify Inc. shares have gained roughly 15% in the last five days.
Over the last month, the e-commerce sector has been entirely too volatile, given the risk sentiment emanating from the macro backdrop, specially the Russia-Ukraine war. Shopify Inc. has suffered extreme fluctuation in the last month, with shares gaining almost 30% but losing close to 15% on March 21.
On February 17, DA Davidson analyst Tom Forte lowered the price target on Shopify Inc. to $800 from $1,400 and maintained a Neutral rating on the shares as he resets his view for what success looks like for Shopify Inc.. The analyst also reduced his long-term adjusted EBITDA margin projections to 30% from 45% on the likelihood that expenditure on sales and marketing, R&D, and G&A will be higher than his earlier forecasts.
At the end of the December quarter, 86 hedge funds held long positions in Shopify Inc., up from 73 funds in the prior quarter. Stephen Mandel’s Lone Pine Capital is the leading shareholder of Shopify Inc., with a position worth approximately $2 billion.
Here is what Davis New York Venture Fund has to say about Shopify Inc. in its Q4 2021 investor letter:
“While the above discussion of broad investment categories provides useful context, we always emphasize the old adage that investing is the art of the specific. With this in mind, an example may be helpful. Tesla, Nvidia and Shopify are three of the hottest momentum stocks in today’s market, each having compounded at triple-digit-rates over the last three years. Combined, these three have a market capitalization of roughly $2.3 trillion. In other words, should an investor happen to have a couple of trillion dollars lying around, one investment option, which we will call the Market Darlings portfolio, would be to buy 100% of these three remarkable growth companies and live off their current and future earnings.”
2. Tesla, Inc. (NASDAQ:TSLA)
Gain in Share Price in the Last 5 Days as of March 23: 20.23%
Number of Hedge Fund Holders: 91
Elon Musk’s Tesla, Inc. has recently been making rounds in the Reddit community, as more and more people gain from their bullish calls on the EV automaker. While Tesla, Inc. shares have gained 20.23% in the past few days, Redditors are not the only people making long bets on the stock. Tesla, Inc. recently crossed the trillion dollar valuation mark, making investors frenzied to own a piece of the growing company.
Institutional interest in Tesla, Inc. soared at the end of December 2021, as 91 hedge funds in the database of Insider Monkey reported long positions in the company, compared to 60 funds in the prior quarter. ARK Investment Management remains a prominent Tesla, Inc. shareholder, with 1.9 million shares worth over $2 billion.
On March 9, Piper Sandler analyst Alexander Potter stated that he noticed a “general uptick in inbound calls” from investors regarding Tesla, Inc.’s exposure to geopolitical risks and commodity price hikes. Deteriorating relations between the US and China, as well as rising nickel prices are headwinds for the stock. The analyst views Tesla, Inc.’s China exposure as a “major positive” but warned that American companies “are eventually used as pawns in a wider geopolitical conflict, then Tesla shareholders would likely suffer.” He reiterated an Overweight rating on Tesla, Inc. shares with a $1,350 price target.
Here is what Davis New York Venture Fund has to say about Tesla, Inc. in its Q4 2021 investor letter:
“While the above discussion of broad investment categories provides useful context, we always emphasize the old adage that investing is the art of the specific. With this in mind, an example may be helpful. Tesla, Nvidia and Shopify are three of the hottest momentum stocks in today’s market, each having compounded at triple-digit-rates over the last three years. Combined, these three have a market capitalization of roughly $2.3 trillion. In other words, should an investor happen to have a couple of trillion dollars lying around, one investment option, which we will call the Market Darlings portfolio, would be to buy 100% of these three remarkable growth companies and live off their current and future earnings.”
1. Alibaba Group Holding Limited (NYSE:BABA)
Gain in Share Price in the Last 5 Days as of March 23: 18.32%
Number of Hedge Fund Holders: 96
Alibaba Group Holding Limited is a Chinese tech and ecommerce giant that has gained 18.32% in the last couple of days as China eases the year-long regulations on leading technology firms. Redditors have reported long positions in Alibaba Group Holding Limited recently.
On March 21, Alibaba Group Holding Limited reported that its board has approved to upgrade its share repurchase program from $15 billion to $25 billion. The management is confident in Alibaba Group Holding Limited’s continued growth in the future.
JPMorgan analyst Alex Yao downgraded Alibaba Group Holding Limited to Underweight from Overweight with a $65 price target on March 14, citing that the uncertain macro backdrop is making global investors exit the stock to limit their exposure to the Chinese internet sector.
Hedge fund sentiment has been negative around Alibaba Group Holding Limited. In Q4 2021, 96 funds were bullish on the stock, down from 115 funds in the prior quarter. Fisher Asset Management is the biggest shareholder of the firm, with more than 14 million shares worth $1.6 billion.
Here is what Longleaf Partners International Fund has to say about Alibaba Group Holding Limited in its Q4 2021 investor letter:
“Alibaba (-50%, -2.26%; -22%, -0.82%), the largest online retail platform in China, was another top detractor for the year and in the fourth quarter. Alibaba reported weak quarterly results and downgraded its sales outlook for the current fiscal year to 20- 23% growth, down from original guidance of 29-32% growth. Macro headwinds, weak consumer sentiment, regulatory scrutiny and competitive forces are having a larger than expected impact on overall retail sales and Alibaba’s market share. Notably, overall retail sales in China slowed down to a meager 5% growth in the September quarter. Slowing consumption, combined with stiff competition from new entrants in livestreaming ecommerce, have resulted in transitory deceleration in Alibaba’s core ecommerce growth trajectory. Additionally, the company is accelerating strategic investments in new initiatives, including Community Group Buying (Taocaicai), Taobao Deals, Local Consumer Services and International Ecommerce. These are future growth drivers but are depressing company’s earnings today. In December, we exited our full position in Alibaba. This was more of a tactical move than a change in investment conviction. We initiated the position early in 2021, and the continued challenges in the second half of the year resulted in a loss that was material enough to be helpful from a tax distribution management point of view. We are sensitive to taxable gains and try to minimize where sensible, so we took advantage of the opportunity to reduce that liability and plan on revisiting the Alibaba opportunity in 2022. We continue to own Alibaba in our Asia Pacific strategy.”
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This article is originally published at Insider Monkey.
