The S&P 500 has been making new all-time highs on seemingly a weekly basis. And while recent price action in the market has been relatively weak, optimism appears to remain plentiful. Various meme stocks have ridden this sentiment higher during certain bouts of euphoria this year. Yet, many of the top names in the more speculative corners of the market are down considerably from this year’s peak.
The question is whether meme stocks as a whole can regain their luster, or if a select few will see the majority of the upside if this bull market continues. I think the latter scenario is much more likely, with most meme stocks not worth your time of day.
For investors looking for some high-profile meme stocks with an actual shot at providing meaningful gains, explore my top three picks.
Palantir Technologies (PLTR)
Palantir Technologies (NYSE:PLTR) has surged 69% so far in 2024 due to surging artificial intelligence (AI) adoption. Indeed, the public ultimately recognized that Palantir is a big data and AI company that’s worth its high valuation.
The company has seen impressive growth in its commercial segment, which drove the majority of the company’s revenue and earnings beat. Adoption for the company’s AI products is picking up from various blue-chip clients, who appear to be well-positioned to remain customers for the long-term.
Also, the firm’s core government business saw revenue grow 16%, with notable contracts like a $178 million deal secured with the U.S. Army. International government revenue increased by 33%, highlighting the company’s global expansion, despite European challenges. Palantir Technologies is poised for market dominance by 2030.
The company’s versatility, from optimizing hospital systems to developing Army technology, presents a vast market opportunity. This bodes well for long-term investors, suggesting substantial opportunities for long-term growth.
Nvidia (NVDA)
As the King of the AI chip sector, semiconductor company Nvidia (NASDAQ:NVDA) has surged more than 150% in 2024 alone. That return isn’t surprising, considering Nvidia’s GPUs power almost the entire AI ecosystem right now.
The company’s Q2 earnings are going to be significant for investors in determining whether the recent high demand for its chips is sustainable. Market optimism about a Fed pivot could benefit Nvidia if businesses align with this view.
Despite concerns about potential overvaluation and a correction, the company remains optimistic about its long-term performance. A key factor is its accelerated chip development, with Chief Executive Officer (CEO) Jensen Huang announcing annual AI chip launches instead of every two years. In the last quarter, Nvidia reported $26 billion in revenue, a 262% increase year-over-year (YOY), with a projected 2% rise next quarter. While trading at a premium, its growth potential justifies the current multiple.
Companies across sectors are racing to develop AI applications, relying on Nvidia’s hardware. Although valuations were high, Nvidia has consistently aced its revenue and earnings estimates, making the upcoming report crucial for analysts.
Tesla (TSLA)
Lastly, despite its tremendous downside seen over the past couple of months, EV king Tesla (NASDAQ:TSLA) is still a prominent artificial intelligence (AI) stock to consider. As of this writing, Tesla has revealed its Tesla bot, which they debuted in the 2024 World Artificial Intelligence Conference in Shanghai. Analysts suggest this prototype could soon replace human labor in various industries.
I’ve been bearish on Tesla in the past, and am still broadly bearish on this company over the long-term. But I’m not going to deny the fact that this is a company with a meme or cult following. CEO Elon Musk is among the most divisive figures in big tech, but he’s someone investors continue to follow. So long as that’s the case, it’s hard to bet against this name if meme mania returns.
Despite reporting an 8.7% revenue decline and a 55.1% drop in earnings, Tesla maintained a profit margin of 14.37% and an operating margin of 5.50%. Investors remained bullish, with TSLA stock now up over 50% in a month, driven by excitement over Robotaxi concepts. Morgan Stanley (NYSE:MS) recently raised its price target on TSLA stock in part due to growth in the company’s energy segment. It noted a record 9.4 GWh of energy storage deployed in Q2 of 2024, despite Tesla’s vehicle deliveries miss.
On the date of publication, Chris MacDonald 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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.