Meme stocks are simply those that have gained substantial popularity on social media leading many investors to buy them. That generally causes people to create pictures and gifs including humorous text known as memes of the stocks. Those companies and their shares often garner greater demand due to that social media attention. Prices subsequently rise.
However, much of that attention focuses on risky, speculative firms that generally make poor investments. The stocks discussed here are all from this list. It tracks the most mentioned meme stocks to buy from the Reddit page wallstreetbets.
While these firms aren’t generally speculative or particularly risky, they have each faced or are facing significant, potentially damaging factors. As the title suggests each stock also continues to make sense as an investment. Let’s dive a little deeper into each of the three meme stocks to buy and the reasons that they may sense at the moment.
Tesla (TSLA)
Tesla (NASDAQ:TSLA) stock continues to face significant hurdles and is definitely a contrarian pick at the moment. The company certainly has become a meme stock over the past several years. That’s partly due to the personality of CEO Elon Musk and more recently due to trouble plaguing the EV sector.
It’s very easy to find headlines suggesting that Tesla may have bottomed or will soon bottom. The market is generally hopeful that the worst is over. Participants sense that there’s a substantial opportunity. Bullish investors continue to feel that way despite a sales miss and negative free cash flows shown in the Q1 earnings report.
Any investors seeking evidence of an opportunity should look at the very simple price to earnings ratio. It is not far from a 10-year low currently. it also sits at roughly 40% of the median PE ratio over the last decade. Even if Tesla Falls lower it is nearly certain that it will rebound above current levels in the not too distant future. electric vehicles are far from finished, Tesla is far from finished, and should be an easy contrarian pic at the moment.
Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) is currently more associated with the rise of AI than it is with memes. Nevertheless, the company still gets a lot of attention for the latter. Internet humorists like to poke fun at Microsoft teams, the costs associated with Office installation and the idea that Microsoft continues to overspend in the gaming sector.
Good humor often reflects reality to some degree, but Microsoft continues to be an excellent investment. The company did not become the most valuable firm globally for no reason. It isn’t infallible, and the company continues to make mistakes. However, it also continues to make better strategic and acquisition decisions more often than not.
Companies the size of Microsoft do not manage to grow by 18% as it did in the most recent quarter without making strong decisions. Yes, Cloud Revenue growth was impressive, having grown by 24%. However, Microsoft showed double digit growth across multiple business segments and those who invest in it in the long-term will get the last laugh.
Carnival (CCL)
Carnival (NYSE:CCL) stock continues to ride a roller coaster as the economy tries to find its footing. Over the past year it’s up more than 67%. However, in 2024 it has fallen by more than 13%.
Investors should continue to lean bullish because Carnival continues to head in the right direction. The company reported all-time high booking volumes. Demand is particularly high moving into 2025.
The company’s losses continue to narrow as it finds its way back out of the pandemic. Importantly, those losses narrowed more than anticipated in the most recent quarter. Remember, cruise operators were forced to cease operations during the pandemic. However, unlike airline operators they were not subject to bailouts because they tend to register offshore in tax havens. The result is that they had to take on substantially more debt in order to survive while their assets sat idle.
The point here is that they have survived and Carnival’s narrower than expected losses serve as evidence that it is headed in the right direction.
On the date of publication, Alex Sirois 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.
