3 Meme Stocks That Don’t Suck

March 23, 2022

An unexpected phenomenon happened in the stock market in January 2021.

Shares of GameStop (GME), a video game retail store battered by the COVID pandemic, shot skyward. This was despite a large amount of short interest — mainly institutional investors betting that GME shares would plunge.

The rise of GameStop shares wasn’t due to any major positive change in the company’s business fundamentals or exciting plans for the future.

Instead, it was due to a number of retail investors — many of them young and new to trading — who conspired on Reddit threads to boost GME shares and outwit the short sellers.

It worked. GameStop shares skyrocketed from below $20 to above $300 in a matter of days.

GME was the first so-called “meme stock.” Other companies have followed — AMC Entertainment (AMC), BlackBerry (BB), Bed Bath & Beyond (BBBY), among them. Meme stocks are often companies that mainstream Wall Street is predicting will crash. But they’re cult favorites among investors online, especially on Reddit.

Now, a lot of these stocks are rated poorly by Wall Street because they deserve it.

And lately, many meme stocks have plunged in value as speculative stocks have taken a beating in the stock market.
But there are a few meme stocks that are actually halfway decent portfolio holdings.

Here are three meme stocks that aren’t crazy-risky and actually have genuine growth potential.

1. Nokia

Nokia (NOK) is a Finnish mobile phone company. But it became a meme stock last year as Wall Street began betting against its growth.

Nokia bears argued that the company’s future relied too much on 5G technology. The COVID pandemic slowed the global rollout of 5G networks, leading institutional investors and hedge funds to add Nokia’s stock to the “shorting list.”

However, retail investors pushed into NOK in January 2021, causing its share price to rise by more than 100%.
Now that the spread of 5G is starting again, analysts are beginning to be bullish on Nokia stock. They’re expecting improved sales growth and efficiency, as well as expanded profit margins.

In addition, Nokia has teamed up with Kyndryl (KD), a spinoff of IBM (IBM) to build out private 5G services (like what you’d get on a college campus, for example).

We wouldn’t be surprised to see Nokia’s stock grow by 50% in the next 12 months, making it a meme stock worth taking seriously.

2. Snap

Snap (SNAP) is a social media company that owns Snapchat. Now, Snapchat has recently fallen out of favor in the U.S. as Millennials and Gen Zers have turned to Meta’s (FB) Instagram and TikTok.

However, it’s still in the game.

That’s largely because Snapchat is a favorite social media app in other parts of the world — in particular, in India.
And during the last quarter, Snap recorded its first-ever quarterly profit.

The company even provided guidance that was more exciting than Meta’s. These announcements sent shares of SNAP skyrocketing 60%.

Snap’s stock is still cheap, having lost more than 23% year-to-date. But now some analysts are changing their tune and saying it could shoot up nearly 160% in 12 months.

That makes right now the perfect time to snap up shares (sorry, not sorry).

3. Tesla

Tesla (TSLA) is the world’s most valuable automaker. So it’s odd that it would be a meme stock.
But there are plenty of Tesla naysayers on Wall Street. That’s largely because the company has typically been valued based on its potential and technology, rather than on its actual production.

But that’s starting to change.

After years of stalling, Tesla is actually making products and profits now. In the fourth quarter of 2021, the company delivered 308,500 vehicles — versus analyst estimates of 267,000.

Tesla shares can be volatile, largely thanks to sometimes controversial remarks made by its CEO, Elon Musk. But underneath all the buzz is an actual EV company.

That makes Tesla worth considering.

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