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Which WallStreetBets Tech Stocks are Looking Cheap?
Stock Analysis & Ideas

Which WallStreetBets Tech Stocks are Looking Cheap?

It’s been over a year since Reddit’s WallStreetBets forum and meme stocks were the talk of the town. The epic short squeezes and hilarious posts on Reddit paved the way for a euphoric surge in the stock market in early-to-mid 2021. Indeed, it seems like such a long time ago. Today, stock markets are in turmoil, with the S&P 500 (SPX) at risk of falling into a bear market.

With Fed-induced volatility, inflation, and recession risks on the table, investing has gone from a fun, euphoric activity to one that induces pain. Nobody knows when stock investing will be easy again, but the days of the buying frenzy seem to be over.

Despite the turning of the tides, various meme stocks have still seen quite a bit of action. Looking to WallStreetBets, it’s clear that many of the “degenerates” are still posting actively, looking to gain karma for screenshots of their big gains or losses of the day.

Though interest in such trading is fading, there are many WallStreetBets stocks that have suddenly turned into decent value plays. Now, nobody should expect short-squeezing surges like the ones experienced in early 2021. Regardless, some of the WallStreetBets stocks may sport a risk/reward that’s attractive.

In this piece, we used the TipRanks’ Comparison Tool to evaluate three fallen WallStreetBets stocks to see which have become too cheap for their own good.

Palantir (PLTR)

Palantir is a big-data analytics firm that caught the attention of WallStreetBets when it went live on the NYSE in late-2020 and early-2021. The stock blasted off from the single-digits to about $35 per share at its January 2021 peak. Since then, it’s been nothing but pain for shares of the secretive software company.

From peak to trough, the stock lost nearly 78% of its value. Currently sitting at $8 per share, Palantir now looks like an enticing value. High-multiple tech and growth are out of style these days. When it comes to Palantir and WallStreetBets, it’s all about the screenshots of excessive losses.

Moving ahead, Palantir is looking to enterprise customers to offer its impressive software offerings. Arguably, data is one of the most precious commodities in the digital age. With that, Palantir finds itself on the right side of a very powerful secular trend.

Though Palantir has the means to expand upon its margins over the coming years, a recession could derail the firm’s plans. In any case, the stock is starting to get modestly valued, given its impressive long-term growth profile. At 10 times sales, PLTR stock stands out as one of the most enticing of the WallStreetBets favorites amid the tech wreck.

Turning to Wall Street, analysts remain incredibly bullish, with the average Palantir price target of $11.28, implying 36.40% upside from early Thursday trading levels.

Tesla (TSLA)

Elon Musk’s electric vehicle (EV) empire has shown signs of weakness amid the broader market sell-off. The stock is currently down 42% from its high, but is one of the few stocks that are actually up over the past year. Undoubtedly, Tesla stock could be one of the lost dominos to fall as the broader markets roll over. Despite the severity of the peak-to-trough fall, TSLA stock is still up over 700% from its 2020 lows.

Though Tesla has been firing on all cylinders as of late, the implications of a recession could prove detrimental. The auto business tends to take amplified damage during economic downturns. Indeed, there’s just not much demand for expensive EVs when money is tight.

Whether Tesla is a bubble that’s in the process of bursting remains to be seen. Regardless, the macro environment and lofty valuation do not bode well for shares of the EV giant moving forward. At 12.1 times sales, Tesla is still priced aggressively.

Wall Street analysts remain bullish, with the average Tesla price target of $953.07, implying 34.31% upside from Thursday morning trading levels.

SoFi Technologies (SOFI)

SoFi is arguably one of WallStreetBets’ favorite financial technology plays. Indeed, many young posters on the forum are likely very familiar with the product. On a wicked Wednesday for stock markets, SOFI stock was actually up over 2.5%.

The digital finance firm, which recently acquired a bank charter, recently reported a mixed earnings result that saw strength in personal lending but weakness in mortgages. As the neobank looks to beef up its services, I’d look for SoFi to bring its disruption to the big banks to the next level.

Indeed, SoFi has come a long way since its student loan days. Many satisfied customers are likely to stick around for the long haul. Though analysts have been quick to lower the bar on their price targets, I do think the fintech innovator is starting to get too cheap for its own good. At 5.7 times sales, SOFI stock seems more like a value stock than a growth play. When inflation rolls over, and Fed fears peak, I’d look for the stock to make up for lost time.

Wall Street has been busy downgrading the name of late. However, analysts remain bullish, with the average SoFi price target of $11.21, implying 59.69% upside from current levels.

Conclusion

WallStreetBets tech stocks have been dealt massive hits to the chin. They’re falling knives that will eventually turn a corner. Of the three stocks in this piece, Wall Street seems most bullish on SOFI stock currently, and least bullish on TSLA stock.

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