The meme stock mania of 2021 turned out to be a rollercoaster ride for investors. During that heady period, it felt as though every potential meme stock was destined to soar, propelled by an unprecedented wave of speculative frenzy. This led to short-squeeze rallies, which effectively transformed stocks into multibaggers almost overnight.
Fast forward to the present and the allure of meme stocks remains intact, which makes wagering on hot meme stocks imperative. Investors continue to be drawn to the tantalizing prospect of making quick gains. However, unlike the indiscriminate surge of 2021, not every seemingly hot meme stock now is a golden ticket.
This isn’t to say that all meme stock trades are whims of irrational exuberance. But they do require a readiness to embrace the inherent volatility and contrarian nature of such assets. In essence, while the meme stock phenomenon continues to evolve, it demands a more nuanced approach from investors.
Investors wondering what the hottest meme stocks of 2024 might be should consider these three picks.
ChargePoint (CHPT)
ChargePoint (NYSE:CHPT) faced a challenging conclusion to 2023, marked by high capital expenditures and dwindling electric vehicle (EV) sales. This combination pressured the company’s sales model, leading to underwhelming earnings. Yet the narrative around EVs remains robust over the long-term, especially in countries including Canada that are transitioning away from gas-powered cars.
There are firm benefits from this undeniable shift towards EVs despite the costly implications of rapid expansion. A potential silver lining emerges with lower debt costs in the event of rate cuts, catalyzing ChargePoint’s growth and solidifying its industry foothold.
Investors eyeing long-term opportunities may find solace in ChargePoint’s unique advantage: its global charging network. Unlike Tesla (NASDAQ:TSLA) and EVgo (NASDAQ:EVGO), ChargePoint has already established an international presence, a feat Tesla aspires to but has yet to achieve. However, patience is imperative with CHPT stock and immediate surges are unlikely considering the recent drop in demand and the substantial investments required for infrastructure development.
This reality was reflected in the company’s revised revenue guidance after the third quarter, with a notable 12% year-over-year (YOY) revenue drop to $110 million and a net loss of $158.2 million. Despite these setbacks and a lowered sales forecast, ChargePoint’s global network positions it as a potentially rewarding long-term investment in the burgeoning EV sphere and one of the next hot meme stocks.
Alibaba (BABA)
Alibaba (NYSE:BABA) is strategically sharpening its focus on substantially improving its return on invested capital (ROIC), aiming to elevate it into double digits. This shift towards optimizing capital allocation and efficiency reflects a concerted effort to expand profitability. By directing capital towards high-return projects and businesses, Alibaba not only amplifies shareholder value but fortifies its competitive edge.
The company’s adept management of $67 billion in non-core and low-growth investments in the second quarter of fiscal 2023 exemplifies its commitment to maximizing shareholder returns and realigning its portfolio with its core business strategies. However, Alibaba’s trajectory has faced challenges, mainly due to new U.S. export control regulations initiated in August 2023. The ripple effect of these controls has compelled Alibaba to pause the planned division of its cloud services.
Despite these headwinds and a general slowdown in growth, Alibaba remains a profitable entity. The easing of Beijing’s tech crackdown and China’s continued economic expansion presented a promising outlook for the eCommerce titan.
Meta Platforms (META)
Meta Platforms (NASDAQ:META) is one of 2023’s most remarkable turnaround stories, defying Wall Street’s skepticism, especially after its growth hiccup last year. Despite a 64% drop in value in 2022, Meta surged by over 170% in 2023. This resurgence underscores that even well-established companies can efficiently navigate operational challenges and market rebound with vigor.
A key driver behind this revival is Meta’s strategic leverage of artificial intelligence (AI). AI has been instrumental in monetizing the massive user bases of Facebook and Instagram, with innovative products such as Imagine, a standalone AI image generator, marking its foray into new tech frontiers. Additionally, Meta’s mastery in monetizing its prime social media assets is evident. It ended the quarter with a 7% YOY increase in monthly active users across its platforms, totaling 3.96 billion.
Despite past strategic missteps, including soaring capital expenditure and weakened ad targeting, Meta’s commitment to innovation is evident in ventures including the Metaverse and virtual reality (VR). This signals a transformative future for the company. The company’s recent 23% YOY revenue growth is a testament to its renewed stability and potential as well, making it another great pick for investors looking for hot meme stocks in 2024.
On the date of publication, Muslim Farooque did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.