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Reddit Stock Portfolio: 10 Most Popular Tech Stocks To Consider

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·10 min read
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In this article, we discuss the 10 most popular tech stocks to consider on Reddit. If you want to skip our detailed analysis of these stocks, go directly to the Reddit Stock Portfolio: 5 Most Popular Tech Stocks To Consider.

Reddit has become an important internet platform for the finance world in the past year or so as it plays host to millions of retail traders, a market force that has captured Wall Street interest since the GameStop and AMC Entertainment short squeeze saga in early 2021. In summer last year, the platform raised $700 million at a funding round, lifting the valuation by around 67% to more than $10 billion. In February 2021, Reddit had been valued at $6 billion, up nearly 100% from the valuation it had received in early 2020.

From 2021 to 2022: Retail Trading Trends

Since retail traders invested close to $1 trillion in equities last year, per conservative estimates, this has resulted in a market shift towards growth offerings and led to soaring valuations in the tech sector. Hedge funds have actively started keeping tabs on famous Reddit groups like WallStreetBets, PennyStocks, and FinancialIndependence to keep abreast with latest retail investor trends.

Some of the most popular tech stocks on Reddit presently include NVIDIA Corporation (NASDAQ:NVDA), Coinbase Global, Inc. (NASDAQ:COIN), and CrowdStrike Holdings, Inc. (NASDAQ:CRWD), among others discussed in detail below. Analysts expect retail investor interest in the market to slow down in 2022 as inflation fears lead to a mass exodus from growth towards value. The waning of the pandemic, one of the primary factors behind the retail stock trading boom, is also likely to play a role in this regard.

Photo by Adam Nowakowski on Unsplash

Our Methodology

The companies that are popular on Reddit and operate in the tech sector were selected for the list through a careful assessment of business fundamentals and analyst ratings to provide readers with some context for their investment choices.

Reddit Stock Portfolio: Most Popular Tech Stocks To Consider

10. Boxlight Corporation (NASDAQ:BOXL)

Number of Hedge Fund Holders: 4

HC Wainwright analyst Scott Buck recently initiated coverage of Boxlight Corporation (NASDAQ:BOXL) stock with a Buy rating and a price target of $4, underlining that revenue growth and margin expansion of Boxlight Corporation (NASDAQ:BOXL) in the coming months would expand operating leverage and profitability. The analyst noted that Boxlight Corporation (NASDAQ:BOXL) was also improving scale, providing a full suite of education technology solutions that reduced educator fatigue.

Boxlight Corporation (NASDAQ:BOXL) has attracted major hedge fund interest in recent months as well. Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in Boxlight Corporation (NASDAQ:BOXL) with 980,700 shares worth more than $2.2 million.

Just like NVIDIA Corporation (NASDAQ:NVDA), Coinbase Global, Inc. (NASDAQ:COIN), and CrowdStrike Holdings, Inc. (NASDAQ:CRWD), Boxlight Corporation (NASDAQ:BOXL) is one of the stocks that is attracting the interest of institutional investors.

9. GAN Limited (NASDAQ:GAN)

Number of Hedge Fund Holders: 16

GAN Limited (NASDAQ: GAN) provides iGaming and sports betting software to gambling firms. In the wake of the pandemic, these firms have increasingly turned their attention to the digitization of business, often turning towards GAN Limited (NASDAQ: GAN) for their needs. The record online sports betting volumes during the Super Bowl are one indicator of the shift in the industry. GAN Limited (NASDAQ: GAN) has steadily grown since the May 2020 IPO, recently reporting a 300% year-on-year increase in quarterly revenue.

The performance of GAN Limited (NASDAQ: GAN) in the past few months has turned heads in the hedge fund industry too. At the end of the third quarter of 2021, 16 hedge funds in the database of Insider Monkey held stakes worth $55 million in GAN Limited (NASDAQ: GAN), up from 15 the preceding quarter worth $76 million.

In its Q4 2020 investor letter, Symmetry Invest, an asset management firm, highlighted a few stocks and GAN Limited (NASDAQ:GAN) was one of them. Here is what the fund said:

“We have been following GAN for a long time while it was a small AIM-listed stock. The company had gained a strong market position in New Jersey when the state opened up the market for online casinos in 2014, and also exhibited solid growth and a compelling market position in Italy. But at the same time, it was loss-making, had to constantly raise new capital and the growth was not “overwhelming”. We still spent time familiarizing ourselves with the company, as we could see that their market position in the US could become a strength in due time. The first crucial news came in mid-2018 when the PASPA rule was removed, and all states in the US were free to self-regulate sports betting and casino. This presented itself a clear opportunity for GAN, but as they still did not have a sports betting product, we bided our time. When Pennsylvania, in 2019, also allowed sports betting and casino, and we saw how Fanduel/Betfair started to gain a strong market position building on GAN’s platform, we initiated a purchase. At the time the stock was still only increasing slightly, and the financials were still not good (it takes time for leading KPIs to affect the numbers). We continued to buy in light of willingness from more states to open up, and GAN signing on more and more customers. In May 2020, GAN chose to substitute the small AIM exchange for Nasdaq in the US. As reported revenue began to rise +100% YoY and margins followed, the stock reacted strongly. The stock thus ended up rising 1.000% from mid-2018 to mid-2020. Even during 2019, one could still buy the stock for 3-8 USD (the stock was listed in the UK and in pence at the time). Today it is traded for approximately 20 USD.

GAN is therefore a great example of how you can follow a company for a long time, do your analysis, and be ready to buy in when the business model is facing the crucial inflection point.”

8. Robinhood Markets, Inc. (NASDAQ:HOOD)

Number of Hedge Fund Holders: 20

Robinhood Markets, Inc. (NASDAQ:HOOD) has truly revolutionized personal finance by pioneering commission-free trades that have made the stock market more accessible to a younger generation of investors. Reddit users, who fall under this category, have been piling into Robinhood Markets, Inc. (NASDAQ: HOOD) since it debuted on the market in summer last year. However, data breaches and a decline in quarter-over-quarter funded accounts have hit the progress of Robinhood Markets, Inc. (NASDAQ: HOOD) in recent weeks.

Even though there is short-term pessimism around Robinhood Markets, Inc. (NASDAQ: HOOD), the long-term outlook on the company remains bullish, as indicated by hedge fund interest.

At the end of the third quarter of 2021, 20 hedge funds in the database of Insider Monkey held stakes worth $4.6 billion in Robinhood Markets, Inc. (NASDAQ: HOOD).

Reddit investors are piling into new stocks like Robinhood, in addition to buying established names like NVIDIA Corporation (NASDAQ:NVDA), Coinbase Global, Inc. (NASDAQ:COIN), and CrowdStrike Holdings, Inc. (NASDAQ:CRWD).

7. Upstart Holdings, Inc. (NASDAQ:UPST)

Number of Hedge Fund Holders: 23

Upstart Holdings, Inc. (NASDAQ:UPST) owns and operates a lending platform that uses artificial intelligence. The company recently announced that it would be partnering with the AgFed Credit Union in Washington to expand personal lending services in the area. The latter has been a partner of Upstart Holdings, Inc. (NASDAQ:UPST) since September last year and uses the Upstart Referral Network for qualified loan application processing. The network refers creditworthy borrowers to the Union.

Upstart Holdings, Inc. (NASDAQ:UPST) is also steadily climbing the hedge fund ladder. Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Third Point is a leading shareholder in Upstart Holdings, Inc. (NASDAQ:UPST) with 12.4 million shares worth more than $3.9 billion.

In its Q2 2021 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and Upstart Holdings, Inc. (NASDAQ:UPST) was one of them. Here is what the fund said:

“During the quarter, we purchased Upstart Holdings Inc. Upstart Holdings, Inc. (NASDAQ:UPST) is an artificial intelligence (AI) and cloud-based lending platform. The company uses AI models to underwrite superior loans with lower interest rates, lower default rates, higher approval rates, and increased underwriting automation. Consumers can access Upstart-powered loans through its banking partners’ websites; however, most of its loans are underwritten on Upstart.com. Upstart has a fee-based revenue model and retains only a small portion of the loans, while the majority of the loans end up on the balance sheets of its partner banks or are sold into the capital markets. We believe Upstart Holdings, Inc. (NASDAQ:UPST)’s technology is superior to the FICO score, which is ubiquitous within the consumer credit markets. With an excellent product and a large total addressable market, we believe that Upstart Holdings, Inc. (NASDAQ:UPST)’s prospects are bright.”

6. DraftKings Inc. (NASDAQ:DKNG)

Number of Hedge Fund Holders: 28

DraftKings Inc. (NASDAQ:DKNG) is a digital sports entertainment and gaming firm. Craig-Hallum analyst Ryan Sigdahl recently maintained a Buy rating on DraftKings Inc. (NASDAQ:DKNG) stock with a price target of $51. In a bullish investor note, the analyst underlined that the valuation of DraftKings Inc. (NASDAQ:DKNG) seemed justified given the “scarcity” of names in the sector to play megatrends in online sports betting. The analyst also backed DraftKings Inc. (NASDAQ:DKNG) to improve margins ahead of long-term targets.

The positive analyst sentiment around DraftKings Inc. (NASDAQ:DKNG) is reflected in hedge fund numbers as well. At the end of the third quarter of 2021, 28 hedge funds in the database of Insider Monkey held stakes worth $1.3 billion in DraftKings Inc. (NASDAQ:DKNG), up from 26 the preceding quarter worth $927 million.

Along with NVIDIA Corporation (NASDAQ:NVDA), Coinbase Global, Inc. (NASDAQ:COIN), and CrowdStrike Holdings, Inc. (NASDAQ:CRWD), DraftKings Inc. (NASDAQ:DKNG) is one of the stocks on the radar of growth investors.

In its Q2 2021 investor letter, Alger, an asset management firm, highlighted a few stocks and DraftKings Inc. (NASDAQ:DKNG) was one of them. Here is what the fund said:

“DraftKings is an online gaming operator. Its legacy Daily Fantasy Sports (DFS) allows users to virtually draft teams of players from professional sports leagues and potentially earn a payout based on how athletes perform. DraftKings Online Sports Betting (OSB) involves the company taking wagers or bets from customers on sporting events. The company’s third offering, Online Casino (iGaming), involves customers betting real money when playing casino games like slots and blackjack online.

DFS is legal in most states, while approximately 25% of the country’s population has access to OSB and approximately 10% has access to iGaming. Within a year, we expect approximately 40% or more of the population to have access to OSB as legalization moves rapidly.

The company reported a strong quarter, with revenues exceeding expectations by more than 30%. We think the stock underperformed due to the time period between the conclusion of March Madness and the start of the NFL season being a weaker betting period and concerns about more intense competition. Concerns around tough comps have also hindered performance of DraftKings shares. We note that monthly state data continues to be robust, showing no signs of slowing from reopening. We also believe DraftKings is increasing its potential to gain market share by moving its tech-platform to SBTech, which is a sports betting platform the company acquired as part of a SPAC deal. Legalization of sports betting by states has also been robust.”

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Disclosure. None. Reddit Stock Portfolio: 10 Most Popular Tech Stocks To Consider is originally published on Insider Monkey.