Amd Stock Buy Or Sell Reddit
In 2020 and 2021, so-called Reddit stocks came roaring to life. Investors were increasingly piling into these names in a way that many in the industry knew would end in disaster. Ultimately, it did, with these stocks falling significantly in 2022. However, that does leave us with some cheap Reddit stocks to pick over.
amd stock buy or sell reddit
That miss sent shares to new 52-week lows, with AMD stock now down about 65% from the high. Given its role in the semiconductor space and how far the stock has already sunk, long-term investors may want to pay attention to AMD.
In fact, BlackBerry has been a favorite among certain investors for a long time, but the stock has never panned out to be the winner that the bulls had hoped. In that respect, avoiding BlackBerry is a reasonable takeaway for many readers and without question, is the riskiest pick on this list.
Discussions on some Reddit boards are often associated with "meme stocks" like GameStop and AMC, which skyrocketed to all-time highs last year as retail investors promoted them as short-squeeze candidates across the social network's subreddits. Its top investing subreddit, WallStreetBets (WSB), currently has 12.3 million members.
But over the past year, many of the so-called "Reddit stocks" collapsed as rising interest rates drove investors toward more conservative investments. The term "Reddit stock" also became synonymous with low-quality stocks which merely traded on their short-term momentum and short-squeeze potential instead of their fundamental strengths.
However, investors who are familiar with Reddit's WSB community will likely tell you that many of the top stocks aren't throwaway names. In fact, blue-chip tech giants like Apple (AAPL 0.98%) and Advanced Micro Devices (AMD -0.25%) are still two of the most frequently mentioned stocks on WSB. Both of these "Reddit stocks" should remain solid investments for years to come.
Apple reduced its share count by 38% over the past 10 years with big buybacks, and it's raised its dividends every year after reinstating them in 2012. Its stock has risen 560% over the past decade, and it's generated a total return of about 670% after factoring in reinvested dividends. The S&P 500 generated a total return of 245% during that same period.
When that happens, Apple will likely evolve into a more diversified tech giant, which will generate even bigger returns for its long-term investors. That's probably why Warren Buffett allocated a whopping 40% of Berkshire Hathaway's portfolio to Apple's stock.
However, Su turned around AMD by selling more custom APUs (which merged together CPUs and GPUs) to gaming console makers, rebooted its CPU business with a brand-new architecture, and kept pace with Nvidia by launching a new lineup of affordable gaming GPUs.
But the ride's been much bumpier for recent investors. AMD's stock was cut in half this year as rising interest rates, slowing PC sales, and Intel's ambitious turnaround efforts sparked concerns about its near-term growth.
There was a time when stock-picking was left up to your advisor rather than the crowd. The advent of the internet and online access to stock research put some of that power in investors' hands, but they were still ultimately steered by professionals. The web's investment advice bulletin boards, conversely, were the proverbial wild west.
The amateur crowd has gotten rather savvy in recent years, though, collectively identifying quality names with plans to hold onto them for the long haul. Here's a closer look at two of the Reddit crowd's favorite stocks right now that make good sense as long-term picks.
The company isn't yet profitable, for the record. But, this year's projected 31% increase in revenue should carry Airbnb out of the red and into the black, with full-year earnings of $1.26 per share in the cards. That swing to a profit could be a game-changer for the stock's performance.
James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Airbnb, Inc., Intel, and Nvidia. The Motley Fool recommends the following options: long January 2023 $57.50 calls on Intel and short January 2023 $57.50 puts on Intel. The Motley Fool has a disclosure policy.
The internet has been used for talking about stocks and investments since its inception. Reddit is just the latest evolution of that. There are some advantages to researching stocks on Reddit, as well as some things you should watch out for.
In this paper, we investigate whether a trading strategy that follows the WSB subreddit can consistently produce alpha. The literature to date has been mixed regarding whether individual opinions posted to social media are informative for stock prices. Two examples include Philipp and von Nitzsch (2013) who find no evidence of information content in aggregated recommendations and Chen et al. (2014) who find online opinions can predict stock returns.
Our approach is unique because rather than examining how opinions on a given forum can predict individual stock prices, we focus on whether a simple and easily implementable trading strategy following WSB can produce alpha. Our perspective is that of a typical retail trader that uses the WSB thread to make stock picks. As evidenced by the creation of the VanEck Vectors Social Sentiment ETF (ticker BUZZ) which tracks the 75 large U.S. stocks with the most bullish perception from social media and other alternative datasets, there appears to be interest in such a trading strategy.
New research on the topic is critical because the landscape for retail investment is shifting. With the cost of information decreasing exponentially and the cost of active trading approaching zero, significant frictions are dissipating in the current environment. Another notable difference is the generation of traders using WSB is generally thought to be new to the market. How this generation of traders performs relative to past generations is interesting. Whether the new generation of retail traders can succeed in the more favorable environment is an important research question we aim to address. One avenue by which the costs of information have decreased is the rise of social media platforms to exchange ideas. The literature to date has been mixed whether opinions on these social media platforms can predict stock returns. Our study contributes to this literature by focusing on a trading strategy that can be easily implementable by a retail investor and observing how that investor would perform.
However, the aforementioned studies mostly focus on long-term performance. In our setting, traders tend to have shorter horizons. Studies focused on shorter horizons tend to document more evidence of success for the retail investor. For example, Kaniel et al. (2008) show the retail investor trading positively predicts short-term returns. Kaniel et al. (2012) find similar results of informed trading around earnings announcements. Similarly, Barber et al. (2009) document that stocks heavily bought in retail books positively predict performance. Boehmer et al. (2021) document retail skill over a week-long horizon. Other papers focus on subsets of retail investors. For example, Fong et al. (2014) find that trades of full service brokers outperform those of discount brokers.
In the appendix, we provide examples of the content of the submissions. The sample submissions show various ways of identifying buy and sell signals. As noted in the table, some are simple submissions with nothing more than a ticker and a direction. Others include technical reasoning such as MACD crossovers or low trading volumes allowing for more price impact. We then merge these data with CRSP and Compustat for stock information and accounting variables, respectively. Table 1 describes the results from this WSB data scrape, and Table 2 presents the accounting variable descriptive statistics.
Panel A of Table 1 presents the number of submissions with buy or sell signals by year. We also include the number of unique posters by year. Unsurprisingly, the number of submissions increases dramatically over time. The number of unique posters increased from 32 in 2012 to 77,885 in 2021. The GameStop short squeeze began in late 2020 and as news outlets continued to publicize WSB, the subreddit following and posting grew exponentially. The first quarter of 2021 has almost four times as many submissions as all of 2020 and about sixteen times more submissions than all of 2019. Because of this rapid increase, we break out our key analyses by full sample, pre-2021, and post-2021. Panel B presents the most frequent tickers suggested for the full sample and split out by pre-2021 and post-2021. GameStop represents 25.41% of all submissions with 56,233 mentions, most of which occur in 2021. Although GameStop submissions make up a quarter of the total number of submissions, our empirical strategy ensures our sample is not heavily influenced by any one security. Prior to 2021, the most popular tickers include an S&P500 ETF, Tesla, and Advanced Micro Devices (ADM). Tesla and ADM are unsurprising as they had been popular companies prior to the meme stock explosion. Tesla and ADM both notably had significant exposure to Bitcoin on their balance sheets, making them attractive stocks for retail investors seeking volatility and high potential expected returns.
To form portfolios, we separate stocks by day into long and short. If a stock has been suggested as a buy and a sell in the same day, we take the net effect. For example, if GameStop is suggested 1000 times to be bought and 100 times to be sold in a given day, we put one equal-weighted share of GameStop in the long portfolio on that day.Footnote 4 This method ensures that the portfolio is not overweight in any one stock. If the stock suggestion is made in day t before trading close of 4 pm eastern, we assume the security is bought on day t. If the security is suggestion is made after 4 pm eastern, we assume the security is bought the following day. This is to ensure there is no look-ahead bias in the data. 041b061a72