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3 Stocks To Watch In The Coming Week: GameStop, Amazon, Alphabet

By Investing.com (Haris Anwar/Investing.com)Stock MarketsJan 31, 2021 08:13AM ET
www.investing.com/analysis/3-stocks-to-watch-in-the-coming-week-gamestop-amazon-alphabet-200557612
3 Stocks To Watch In The Coming Week: GameStop, Amazon, Alphabet
By Investing.com (Haris Anwar/Investing.com)   |  Jan 31, 2021 08:13AM ET
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There's a lot happening in the middle of the most important earnings season of the year, to steal investor attention away from fundamentals. The frenzy over GameStop (NYSE:GME) and similar heavily-shorted stocks is the one market situation right now that can’t be ignored.

The rally was triggered by retail investors who organized themselves on social media sites, such as Reddit, to find stocks that hedge funds are recommending to sell, and then bidding up their values to create a short squeeze.

This so-called movement by retail investors against the Wall Street establishment gained further momentum the past week when Tesla (NASDAQ:TSLA) founder Elon Musk fueled the surge in GameStop shares by tweeting “Gamestonk!!” and a link to the WallStreetBets Reddit thread. Musk has long demanded the SEC ban short-selling, a practice which once damaged Tesla shares.

This campaign by social media-inspired retail investors is likely to continue to occupy markets in the week ahead when many mega stocks will also unveil their latest earnings. Here are the three stocks which investors should watch as the week unfolds:

1. GameStop

This isn’t the kind of stock long-term investors would have focused on during normal times. However, the current activity surrounding this brick-and-mortar video game retailer has become a big indicator of a possible bubble in equity markets during the pandemic which has attracted an army of stay-at-home young investors, looking for the next great idea with which to make money.

GME 300 Minute Chart
GME 300 Minute Chart

Shares of GameStop, based in Grapevine, Texas, along with other heavily shorted stocks, spiked once again on Friday, after Robinhood, the most popular platform for retail investors, said it was resuming limited trading of previously restricted securities.

The gain pushed GameStop’s rally in the past week to over 400% and this month to more than 1,600% as an army of retail investors, goading each other on via social media platforms decided to take on hedge fund short positions, creating short squeezes that would damage fund holdings. The stock closed on Friday at $325 with a market capitalization of $22.66 billion. It’s anybody’s guess how this frenzied buying activity will end, but GameStop isn’t the stock in which serious investors should consider taking a position.

The company has been closing down its stores as it struggled for years to turn around its business as online games go digitial. Its sales are projected to decline by 18% this fiscal year, according to a Bloomberg estimate.

2. Amazon.com

Online retail juggernaut Amazon.com (NASDAQ:AMZN) is scheduled to report Q4 earnings after the market closes on Tuesday, Feb. 2. The consensus is that the world’s most valuable e-commerce company by market cap will once again crush expectations based on its strong earnings momentum.

AMZN Weekly TTM
AMZN Weekly TTM

Sales are forecast to rise 37% to $119.68 billion from the same period a year ago, producing per share profit of $7.16. Amazon has been benefiting from the shift to online shopping during the COVID-19 pandemic. A steep jump in sales in Q4 would indicate that consumers bought more online during holidays even as the pandemic continued raging.

Amazon, however, warned in October that adjustments to its operations and greater spending due to CPVID-19 would continue to weigh on its per share profitability. Amazon shares closed on Friday at $3,204.40, almost unchanged during the past three months, following a strong run since the March dip.

3. Alphabet

Alphabet (NASDAQ:GOOGL), Google's parent company, will also be reporting Q4 earnings on Tuesday, after the market close. On average, expectations are for EPS of $15.7 on revenue of $52.89 billion.

GOOGL Weekly TTM
GOOGL Weekly TTM

Shares of Google have underperformed during the past year, on concerns that the recession triggered by the coronavirus will force companies to cut digital ad spending, hurting this internet content and information behemoth. But the company surprised investors in October when its digital revenue soared, far exceeding analysts’ expectations. The stock closed on Friday at $1,827.36, up about 25% during the past 12 months.

The world’s largest internet company has been trying to diversify away from search advertising for years by investing heavily in cloud services, digital video, consumer hardware and riskier long-term bets such as driverless cars.

With earnings uncertainty, multiple antitrust lawsuits in recent months have increased the risk of a regulatory action against the company which has been accused by state attorneys general of holding a monopoly in search and online advertising.

3 Stocks To Watch In The Coming Week: GameStop, Amazon, Alphabet
 

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3 Stocks To Watch In The Coming Week: GameStop, Amazon, Alphabet

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Comments (12)
Veh Weh
Veh Weh Feb 02, 2021 2:35AM ET
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AMC for sure
Dino Delic
Dino Delic Feb 01, 2021 4:23PM ET
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BlackBerry too.
Panos Kallieris
Panos Kallieris Feb 01, 2021 1:52AM ET
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$AMC !! Dont distruct !!!
Stephen medina
Stephen medina Jan 31, 2021 8:34PM ET
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Fubo going to new high has high short interest
Jordan Kaufman
Jordan Kaufman Jan 31, 2021 6:58PM ET
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SNDL no debt
Levelle OBannon
Levelle OBannon Jan 31, 2021 6:58PM ET
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hell yeah! I'm buying a ton to hold
Levelle OBannon
Levelle OBannon Jan 31, 2021 6:58PM ET
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hell yeah! I'm buying a ton to hold
Levelle OBannon
Levelle OBannon Jan 31, 2021 6:58PM ET
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a lot of people wanna get high on *******being home all day. no office to report to. sales will skyrocket as well as delivery services for ******* let's go biden!
john dislias
john dislias Jan 31, 2021 3:52PM ET
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Xrx,z ,qs ,xpev , gm , ibio , acb next boom
Iron Ronin
Iron Ronin Jan 31, 2021 1:57PM ET
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AMC is literally the next GME. the other 2 on this list are solid picks, but independent of the meme stock movement.
Khente Koram
Khente Koram Jan 31, 2021 1:36PM ET
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how do you completely overlook AMC ?
Dennis Hope
Dennis Hope Jan 31, 2021 1:05PM ET
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One of the most talked about stocks - guess you’re not touching that one?! $AMC
Rigged Market Oracle
Rigged Market Oracle Jan 31, 2021 1:02PM ET
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why isn't aapl or gnus on this list, those will make you faaaar more money that the above listed theta burners.
Rigged Market Oracle
Rigged Market Oracle Jan 31, 2021 1:02PM ET
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than*
Ryan Patterson
Ryan Patterson Jan 31, 2021 1:02PM ET
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+1 #GNUS
Gopal Syamala
Gopal Syamala Jan 31, 2021 1:02PM ET
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Simple. AAPL doesnt has as mich short interest as GME/AMC/BBBY/BB/COSS/EXPR ..
Indiana Jones
Indiana Jones Jan 31, 2021 1:02PM ET
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Gopal Syamala Yes and AAPL also doesn't have the chance of dropping 80%.
david ison
david ison Jan 31, 2021 11:02AM ET
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Why is SIRI beaten down
Edna Ranck
Edna Ranck Jan 31, 2021 7:48AM ET
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Thank you Haris!
 
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