Oh, the world of Reddit (NYSE: RDDT). From r/WallStreetBets to other forums discussing stock trading, there are plenty of individual stocks (and published analysis) on these companies for investors to work with. I find much of the discussion on these forums to be funny, at the least, with some informative content on there.
But when it comes to the “buzziest” growth stocks out there — from meme stocks to companies many consider to be overvalued — there’s also a lot of noise.
Here’s a list of five of the hottest stocks on Reddit, and which I think are buys (or not) right now.
Source: Getty Images
Nvidia
It should be no surprise that chip-making giant Nvidia (NASDAQ: NVDA) tops the charts on most metrics in terms of content on Reddit and other platforms.
Shares of the semiconductor maker have done nothing but move in a parabolic fashion higher in recent years. And by all accounts, the growth drivers underpinning Nvidia’s rise should be in place for years to come.
This would be one company that is indeed highly touted by the market and retail investors. But it’s also a stock I think could have the kind of outlandish growth that’s being priced in right now. Accordingly, Nvidia remains a buy in my books.
Palantir
Another artificial intelligence (AI)-oriented growth stock that investors continue to hone in on is Palantir (NASDAQ: PLTR).
Interestingly, Palantir’s stock chart, particularly over more recent periods, looks a lot like Nvidia’s. It wasn’t always this way, with shares of the formerly (and consistently) unprofitable company receiving a boost from a push toward productivity and the rollout of various high-priced (and high-margin) AI-enabled platforms.
Palantir is one of those extremely pricey stocks that I think investors have to be careful with. It’s not necessarily a sell in my books, not yet. But I wouldn’t be jumping up and down to buy this stock here.
Tesla
Electric vehicle (EV) maker Tesla (NASDAQ: TSLA) is perhaps the easiest sell call to make on this list. Shares of the car company (and it is a car company) have consistently traded at lofty multiples ascribed to only the fastest-growing companies.
The thing is, there hasn’t been any growth to speak of for multiple quarters. The market for EVs appears to be cooling, alongside Tesla’s brand image.
I just don’t see the kind of upside with TSLA stock over the next five to 10 years that most retail investors do.
Advanced Micro Devices
Now, for a stock I think investors can get excited about. Advanced Micro Devices (NASDAQ: AMD) is an Nvidia competitor with a more attractive valuation (albeit also with a lower growth rate).
If you’re of the belief that over time, we’ll need more and more chips as our data needs surge and AI rises to become the next Industrial Revolution, AMD is a solid pick in this environment.
Of course, plenty could change that thesis. But for now, Nvidia and AMD are both buys in my book.
Mastercard
The last entrant on this list may be a surprising one to some readers, but I’ve noticed quite a bit of traction on Mastercard (NYSE: MA) on Reddit of late.
I think Mastercard is a solid pick for long-term investors looking to play the transition away from cash to credit. Of course, Visa and other larger players are actively growing in this space, so it’s really a market share question for long-term investors as to which card company to consider.
But in my view, holding a basket of the big three should be enough for most investors looking to play this trend. Mastercard is an excellent pick with a reasonable valuation (given where other AI darlings are trading right now).
