Sell-side research firms have long had a major influence on the stock market. They employ teams of analysts that scour through financial statements and other data to form in-depth opinions of publicly traded companies. Often their ratings and price targets single-handedly move the needle.
Within the last couple of years, another powerful market force has emerged—social media investing platforms. Reddit’s WallStreetBets is the most popular and influential. Its 12.5 million subscribers generate over 15,000 comments a day about a wide range of companies and topics.
Two very different approaches to stock analysis. Two very potent drivers of day-to-day stock price movement.
With fundamentals generally pitted against ‘funny-mentals’, Wall Street and WallStreetBets frequently arrive at different conclusions about a particular company. Social media often grows bullish on a name the professionals dislike purely out of spite.
However, there are some cases where the two entities agree. And given the enormity of their combined audiences, such instances could represent valuable signals for investors.
These are three of the stocks that Wall Street and WallStreetBets are both big on.
1. Tesla
Tesla (NASDAQ:TSLA) is coming off a strong second quarter that helped boost its stock price back towards the $1,000 level for the first time since May. Profits rose 57% with electric vehicle production and deliveries up sharply year-over-year, and prices went up.
The energy generation and storage businesses also made solid earnings contributions. As a result of the better-than-expected Q2, Wall Street has been raising its estimates for the rest of the year and next year. The latest consensus estimate for Q3 earnings implies accelerating EPS growth of 69%.
Analysts have also been standing firm on their opinions of the EV maker. No rating changes have occurred since the Q2 update, and roughly two-thirds of those ratings are buys. Meanwhile, WallStreetBets remains enamored with Tesla.
Partly because they recognize the long-term potential of EVs, but mainly because its members enjoy poking fun at eccentric CEO Elon Musk. Lately, it is an oddly-timed 3-for-1 stock split that has made for good social media fodder. The split coincided with the Nasdaq’s worst intraday drop since June and has yet to attract buyers. Rest assured, though, that this group will eventually band together to pump up their beloved Tesla.
2. AMD
Along with its semiconductor peers, Advanced Micro Devices (NASDAQ:AMD) has rebounded nicely from its summer low and, according to sell-side research, has ample room to run. Despite expressing caution around its third-quarter performance, the microprocessor maker garnered largely bullish sentiment from the Street following its Q2 report. Eleven of the 17 analyst updates have come with buy ratings and price targets in the $105 to $140 range.
With economic uncertainty on the rise, opting for a conservative Q3 revenue growth projection but still sees full-year growth at around 60%. The company’s Ryzen chips, while less familiar to desktop, laptop, and tablet shoppers, are becoming a bigger part of the PC market.
Customers like Dell (NYSE:DELL), HP (NYSE:HPQ), and Lenovo (OTC:LNVGY) are rolling out more AMD-powered notebooks to meet the needs of modern workers and students. And while this business and the gaming division appear to be experiencing a near-term slowdown, analysts generally feel the long-term picture remains bright.
So too do most WallStreetBets subscribers who have embraced the chip maker as a worthy Intel (NASDAQ:INTC) challenger. The company is somewhat of an underdog story that social media-driven traders like to get behind. And since many on the platform are also gamers, they are both AMD consumers and investors.
3. SoFi Technologies
SoFi Technologies (NASDAQ:SOFI) is also popular with the younger generations that drive WallStreetBets discussions. This makes sense because SoFi aims to be a one-stop shop for digital financial services, which is in high demand from younger consumers in search of financial independence.
SoFi’s membership base grew to 4.3 million in Q2, a 69% year-over-year jump as more people turned to the app to take out loans, invest, and establish budgets. On top of SoFi’s core financial offerings, members enjoy extra benefits like access to career advice and being part of a community of ambitious, goal-oriented individuals.
The platform is also attracting members on account of its above-market savings rates. In July 2022, SoFi raised its maximum savings account yield from 1.5% to 1.8%. This may seem low but is quite competitive in today’s environment.
SoFi, the holder of naming rights for the L.A. Rams and L.A. Chargers NFL teams, is also generating buzz from Wall Street research firms. In the past week, four analysts have reiterated their bullish opinions of the stock.
The uncertainty lifted by President Biden’s student loan forgiveness plan has been largely considered a positive for SoFi since those with excess debt could turn to the company’s competitive student loan products. Jefferies, the most bullish on the Street, see SoFi trending towards $10. Ambitious WallStreetBets members are naturally hoping for a return to the $20s.
Tesla is a part of the Entrepreneur Index, which tracks some of the largest publicly traded companies founded and run by entrepreneurs.