We recently published a list of 13 Best Meme Stocks To Buy Right Now. In this article, we are going to take a look at where SoFi Technologies, Inc. (NASDAQ:SOFI) stands against other best meme stocks to buy right now.

What are Meme Stocks?

Meme stocks are largely driven by social media hype. These stocks gain popularity through memes, modified images, videos, and text shared online, often with positive sentiment by individual investors. Joey Loss, founder of Flow Financial in Jacksonville, Florida, commented in June 2024:

“Meme stocks appeal to our fear of missing out (FOMO) and our desire to get rich quickly. For many investors, it may also appeal to our desire to belong to the tribe–as forums across the internet and social media will create the perception that everyone is participating.”

Meme stocks emerged as a trend in late 2020 and early 2021 when online communities started promoting certain companies’ shares and generating buzz to attract buyers. The rise of commission-free trading platforms and online investing groups during the COVID-19 pandemic played a major role, as many people were at home with extra funds from government aid. Low interest rates may have also encouraged new investors. Meme stock investing was particularly appealing to younger investors who preferred it over traditional investment strategies.

Meme Stock Performance

In 2024, meme stocks remained popular across industries, propelled into fame by social media and the appeal of quick profits. Platforms like Reddit’s WallStreetBets played a notable role in fueling speculation, as investors sought higher returns than traditional assets. Despite skepticism from major financial institutions, the excitement around these stocks persisted. Political figures have also influenced market trends. For example, a media company associated with President Trump saw its stock rise to $70 in early 2024 before dropping to $13 by September, all because of the election frenzy. While the stock later rebounded to $36, the company continued to face challenges, reporting a $19.2 million loss in the third quarter of 2024.

Similarly, a well-known video game retailer that gained attention due to social media-driven hype remained a target for short sellers, even years after its dramatic short squeeze in early 2021. Over the last few years, this company has been a focus for investors betting against its stock. Initially, many short sellers expected the business to face bankruptcy, but as its valuation soared during the meme stock frenzy, they argued its market price no longer reflected its actual financial standing. Before its most significant short squeeze in January 2021, short interest exceeded 140%, meaning more shares were being shorted than were available in the market. While short interest dropped after that period, it remained high, as institutional investors became more cautious about taking large positions against the company.

Our Methodology 

For this article, we compiled a list of meme stocks based on the consensus of reputable websites, along with insights from Reddit to assess retail investor interest. Using Insider Monkey’s Q4 2024 hedge fund database, we examined the hedge fund sentiment for each stock and selected 13 most popular ones. The stocks are ranked in ascending order based on the number of hedge fund holders as of Q4 2024.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

SoFi Technologies, Inc. (NASDAQ:SOFI)

Number of Hedge Fund Holders: 43

SoFi Technologies, Inc. (NASDAQ:SOFI) offers financial services across multiple regions, operating through its Lending, Technology Platform, and Financial Services segments. In 2021, it was one of the most talked-about stocks on Reddit. On January 28, Needham analysts raised the price target for SOFI stock from $13 to $20 while maintaining a Buy rating. The revision came after SoFi delivered a stronger-than-expected fiscal year-end performance. It ranks 3rd on our list of the best meme stocks.

SoFi Technologies, Inc. (NASDAQ:SOFI) saw record revenue growth last year, driven by an increase in both members and products. Adjusted net revenue reached $2.6 billion for 2024, reflecting a 26% year-over-year increase. The Financial Services and Technology Platform segments brought in a combined $1.2 billion, growing 54% from the previous year. Meanwhile, the Lending segment’s adjusted net revenue rose 11% to nearly $1.5 billion, fueled by record loan originations exceeding $23 billion, a 33% climb from the prior year. In the fourth quarter, total assets grew by $1.9 billion, including about $910 million from loan growth, $830 million from other assets, and $80 million from cash, cash equivalents, and investment securities.

According to Insider Monkey’s fourth quarter database, 43 hedge funds were bullish on SoFi Technologies, Inc. (NASDAQ:SOFI), compared to 31 funds in the prior quarter. D E Shaw was the leading position holder in the firm, with 31.3 million shares worth $482.3 million.

Overall, SOFI ranks 3rd on our list of best meme stocks to buy right now. While we acknowledge the potential of SOFI to grow, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SOFI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires

Disclosure: None. This article is originally published at Insider Monkey.