Meme stocks have gained significant attention on Wall Street, with individual investors coordinating their buying efforts on social media platforms like Reddit’s r/WallStreetBets forum. While some may view this trend as irrational, there are reasons behind the interest in certain companies. This backdrop has led to the top meme stocks to buy on the dip.
Investors backing these meme stocks have different motivations. Some aim to challenge hedge funds, while others seek to profit from short squeezes. Despite the varying intentions, these meme stocks have the potential to deliver strong returns to investors in the coming months.
Investors should consider watching three meme stocks in May. These companies have shown promise and could grow in value significantly. Their depressed valuations may also be motivation to add them to your portfolio, and they will rise from the ashes later.
Coinbase (COIN)
Coinbase (NASDAQ:COIN) has shown impressive performance with a significant increase in its stock value, largely driven by retail investor interest and its pivotal role in the crypto industry.
COIN has set optimistic financial targets for 2024, guided by solid performances in the first quarter. The company reported a significant revenue increase in Q1, reaching $1.64 billion, surpassing previous estimates of $1.34 billion.
For the second quarter of 2024, Coinbase has projected its subscription and services revenue to be between $525 million and $600 million, indicating expectations of continued strong performance.
COIN’s short-term performance this year will live or die by that of Bitcoin’s (BTC-USD). Over the last month, it has been on a wild ride, with its monthly chart looking like a heart rate monitor.
This volatility will continue and remain bullish on BTC due to the supply chaos caused by the halving event in April, ETF inflows, and the possibility of reaching another all-time high for the coin this year.
Uber (UBER)
Uber (NYSE:UBER) has achieved its first-ever operating profit, which has improved its standing among investors, particularly those interested in companies that show potential for recovery and profitability.
The company’s first quarter of 2024 showed a 21% year-over-year increase in trips, with monthly active platform consumers (MAPCs) and monthly trips per MAPC growing by 15% and 6%, respectively. Gross bookings also grew significantly by 20% year-over-year. Uber achieved an income from operations of $172 million and an impressive Adjusted EBITDA of $1.4 billion, marking an 82% increase year-over-year.
Looking ahead, Uber has set ambitious goals for 2024. The company has expressed expectations of reaching $5 billion in adjusted earnings by the end of the fiscal year 2024.
Uber and Grab (NASDAQ:GRAB) are two of my favorite meme stocks in the ride-hailing and gig economy industries. We’ve only witnessed the growth at early stages, with much expected from the rising middle classes of developing and developed countries around the world.
DraftKings (DKNG)
As online sports betting becomes more widespread, DraftKings (NASDAQ:DKNG) has capitalized on this trend with aggressive marketing strategies to acquire new customers.
It has also raised its financial guidance for fiscal year 2024, now expecting revenue between $4.8 billion and $5.0 billion, reflecting a significant growth projection of 31% to 36% year-over-year. This optimistic outlook is supported by robust customer retention and acquisition, particularly in their Sportsbook and iGaming products. Additionally, DraftKings has adjusted its 2024 EBITDA guidance to range from $460 million to $540 million.
Also, the company’s Monthly Unique Payers increased by 23% year-over-year. Additionally, Average Revenue per Monthly Unique Payer rose by 25%, driven by enhancements in their sportsbook hold percentage and promotional strategies.
Things look great for DKNG and it has the enthusiasm of meme stock traders behind it, with its stock price rising 31.66% year-to-date and showing significant volatility and options activity.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
