Best WallStreetBets Stocks to Buy February Week 3 Roundup
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The fortunes of WallStreetBets have fallen in line with meme stocks. However, the group also discusses some of the fundamentally strong companies.
US stock markets are now almost near their 2022 lows after the losses in the last week. What are the five best WallStreetBets stocks that you can buy for the fourth week of February?
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Meta Platforms (NYSE: FB)
Facebook parent Meta Platforms has had a dismal ride in 2022. It is the only FAANG stock that is trading at its 52-week lows. Given the negative sentiments towards the company, many even wonder whether it deserves to be in the FAANG pack now. Netflix is the other company whose inclusion in FAANG is being questioned. However, many WallStreetBets members are bullish on Meta Platforms stock despite its recent price action.
WallStreetBets likes Facebook despite the headwinds
In the fourth quarter of 2021, Meta Platforms reported MAUs (monthly active users) of 2.91 billion, below the 2.95 billion that analysts were expecting. The company’s MAUs fell on a sequential basis in the quarter, a first in its history as a publicly-traded company.
Meta Platforms said that it expects to post revenues between $27-$29 billion in the first quarter which would mean a YoY growth between 3-11%. The company’s guidance fell short of the $30.1 billion that analysts were expecting. It said that its revenues in the quarter would be negatively impacted by both impressions and price growth.
The company expects Apple’s iPhone privacy rules to lower this year’s revenues by as much as $10 billion. However, despite these headwinds, WallStreetBets members are optimistic about the company.
Meta Platforms was anyways the cheapest FAANG stock and now looks even more attractive after the recent crash. The company’s massive investments in metaverse would add long-term value even as there are concerns over the short-term outlook.
Overall, after the crash, Meta Platforms is one WallStreetBets stock that should be on your radar.
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PayPal (NYSE: PYPL)
PayPal stock has also fallen to a 52-week low. The stock is now down to levels last seen before the COVID-19 pandemic. The price is now even getting close to its March 2020 lows. The company’s fiscal fourth-quarter performance was largely in line with estimates. However, it was its dismal guidance that led to the sell-off and pushed the stock to multi-month lows.
PayPal expects its revenues to rise between 15-17% in the fiscal year 2022, which was below what analysts were expecting. Its growth is way below what it reported over the last couple of years.
After PayPal’s earnings release, several brokerages including BTIG and Raymond James downgraded the stock and lowered their target prices. Canaccord Genuity Capital Markets lowered its target price for the stock from $315 to $215 but kept its buy rating.
“While the pace of growth in net new accounts is expected to moderate in 2022, we are seeing a steady increase in user engagement metrics and expect to see more marketing behind driving engagement in 2022,” Canaccord said in its note. It also said that “PYPL has shown that it remains nimble despite its size in exploiting rapidly emerging opportunities: scaling an impressive Buy Now Pay Later (BNPL) offering and launch of equity trading.”
WallStreetBets likes PayPal stock after the crash
WallStreetBets members like PayPal stock after the crash. Like Meta Platforms, the company is also witnessing a slowdown in growth in the short term. However, at these prices, it looks like a good buy for the long term.
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Tesla (NYSE: TSLA)
Tesla is a long-time favorite stock of WallStreetBets members and it is usually the top discussion topic on the group. The stock hit an all-time high last year but has since come down. The crash has continued in 2022 and TSLA is now down almost 30% from its peaks.
The fall in Tesla stock comes amid the general sell-off in growth stocks. The company’s fourth-quarter 2021 earnings also added fuel to the fire. While the performance was better than expected, it delayed the launch of new models including the Cybertruck to 2023. Markets were disappointed with the delay and the stock plunged. Other electric vehicle stocks have also been weak.
WallStreetBets loves Tesla but Wall Street is divided
Tesla has always been a divisive stock. While a section of the market believes that it is extremely overvalued, many others see it as a good buy at almost every price level. The kind of dispersion that we see in Tesla’s target price is quite unusual for any stock, especially a mega-cap company.
Meanwhile, most WallStreetBets members have a bullish opinion of Tesla stock. If you are bullish on the electric vehicle story, Tesla is one stock that should be on your radar.
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Invesco QQQ Trust Series I (NYSE: QQQ)
QQQ, which tracks the Nasdaq-100 Index, is a popular ETF on WallStreetBets. The ETF gives you diversified exposure to large-cap US technology companies. The Nasdaq Index underperformed S&P 500 in 2021 and has continued to underwhelm in 2022 amid the fall in tech and growth stocks.
QQQ is a WallStreetBets ETF that you can buy
While WallStreetBets members usually discuss stocks, QQQ is among those ETFs that are popular in the group. If you want to bet on something that’s popular among WallStreetBets members but are wary of investing in individual stocks, QQQ would fit the bill. QQQ is quite liquid and the expense ratio is also low. The ETF is a good low-cost way to invest in a basket of US tech stocks.
ETFs can be a good investing strategy, especially for investors who lack the time or analytical skills to pick individual stocks. Especially under the current market environment, where we have heightened volatility, ETFs could turn out to be a better bet.
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Ark Innovation ETF (NYSE: ARKK)
Ark Innovation ETF fell to a 52-week low yesterday and is now down 57% from its 52-week highs. The ETF underperformed the markets by a wide margin in 2020 as stay-at-home disruptors saw a buying spree. Tesla, which is generally the biggest holding for ARKK surged 740% in 2020.
However, currently, all of ARKK’s holdings are witnessing a selling spree. Roku, which is among its top five holdings lost over 22% of its value on Friday and fell to a 52-week low. Zoom Video Communications and Teladoc Health are also trading near their 52-week lows.
WallStreetBets is divided on ARKK
WallStreetBets members are divided on ARKK. Notably, Turtle Capital Short Innovation ETF, which takes a short position against ARKK has seen inflows of $200 million this year.
Wood is bullish on the long-term potential of the stocks in her portfolio. According to Wood “If we are right and the disruptive innovation that is evolving is going to disintermediate and disrupt the traditional world order, those benchmarks are where the risk is. Not our portfolios.”
She believes that her holdings have bottomed out and can deliver strong gains over the long term. She said, “We do believe innovation is in the bargain basement territory. … Our technology stocks are way undervalued relative to their potential. … Give us five years, we’re running a deep value portfolio.”
If you want to bet on a revival in growth stocks, ARKK is one WallStreetBets ETF that should be on your radar.
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