In 2021, proponents of meme stocks whipped up such a frenzy for GameStop (NYSE:GME) and AMC Entertainment (NYSE:AMC) on online investing forums such as the subreddit WallStreetBets, that both experienced one-month price surges rarely seen in the markets.
While meme stocks can be risky, they serve a purpose: to spotlight stocks worthy or unworthy, depending on your viewpoint, of the most popular companies being traded by investors at any given time. The three stocks on this list are good examples of companies that have managed to turn hype into profits.
Quiver Quantitative’s has a list of the top 50 meme stocks, and those included here are ones that have been mentioned on WallStreetBets over the past week. A WallStreetBets score is based on the number of times a stock is mentioned on the subreddit. That indicates investor interest in a particular stock.
The three companies on this list aren’t ones you would regularly associate with meme stocks. Nonetheless, they’re being talked about by meme-stock investors, and more importantly, they give you a legitimate opportunity to own a quality business.
Amazon.com (AMZN)
Amazon.com (NASDAQ:AMZN) has the highest WallStreetBets score of the three at 96. There are many risky investments in the top 50, but the e-commerce giant is not one of them. Aft least not if you’re planning to invest for three to five years. AMZN stock has been on a roll since the beginning of 2023, when it traded around $84. It’s more than doubled in 13 months.
The media have made a big deal of founder Jeffrey Bezos selling 50 million Amazon shares since the beginning of February. On March 4, he gifted another 477,852 to non-profit organizations. After all these sales, Bezos still has 937.77 million shares, or approximately 9% outstanding. He remains its largest shareholder.
With high profit margins from its Prime Video ads, he doesn’t have to own more shares to make more money. Amazon’s ad revenues will do that for him. Add in its healthy profits from Amazon Web Services (AWS), and he has nothing to worry about.
Palantir Technologies (PLTR)
Palantir Technologies (NYSE:PLTR) has the second-highest WallStreetBets score of 93. PLTR stock is up 50% year-to-date (YTD), most of it since Feb. 5 after the big data analytics company reported strong Q4 2023 earnings.
The company’s Artificial Intelligence Platform (AIP) was released in mid-2023. In 12 months, the platform has quickly driven its overall business. In CEO Alex Karp’s letter to shareholders, he said that AIP would become the dominant platform for AI in the tech industry.
“The demand for large language models from commercial institutions in the United States continues to be unrelenting. Every part of our organization is focused on the rollout of our Artificial Intelligence Platform (AIP), which has gone from a prototype to a product in months,” Karp stated.
Wedbush Securities analyst Dan Ives is convinced that Palantir is the real deal in AI. On March 8, he upped his target price for PLTR by $5 to $35 while maintaining his Outperform rating. He believes its AIP platform is in an excellent position to capture significant AI market share for its commercial and government businesses.
PLTR could be a good bet for aggressive investors as it appears to be ready to go on a run.
Royal Caribbean Cruises (RCL)
Royal Caribbean Cruises (NYSE:RCL) has the lowest WallStreetBets score of the three at 83. RCL is currently the strongest of the cruise line stocks. Its shares are up 106% over the past year, better than its competitors Carnival (NYSE:CCL) and Norwegian Cruise Line Holdings (NYSE:NCLH) by a wide margin.
For all the cruise ship detractors, the company’s Icon of the Seas recently rescued 14 people adrift in the ocean. The boat, considered the world’s largest cruise ship, is capable of much, including rescuing stranded boaters.
On the downside, a Royal Caribbean employee was recently arrested for inserting cameras into passenger bathrooms. The employee worked as a stateroom attendant, which meant they had daily access to the cabins. Wisely, the company promptly fired the employee and reported the activities to law enforcement. Despite this exceptionally brazen act of voyeurism, the company is expected to continue to generate substantial revenue and profit growth in 2024.
Approximately 22 analysts cover RCL stock, with 14 rating it a Buy. It has a target price of $148.54, 12% higher than where it’s currently trading. Analysts expect it to earn $9.91 a share in 2024 and $11.32 in 2025. At 13x its 2024 earnings per share (EPS), it still trades at a reasonable price.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
