Unsurprisingly, market darling NVIDIA Corp (NASDAQ: NVDA) was the favourite US stock.

Stake market analyst Samy Sriram said Australian investors showed strong enthusiasm for US shares in 2024, commenting:

In similar fashion to 2023, we saw Australian investors continuing to gain exposure to individual US tech stocks via Stake Wall Street.

But even on Stake Aus, iShares S&P 500 ETF (ASX: IVV) was the most popular equity, and in fact, three of the top five most popular equities on Stake Aus were ETFs with high US exposure — with Betashares Nasdaq 100 ETF (ASX: NDQ) and Vanguard Msci Index International Shares ETF (ASX: VGS) also making the cut.

Stake's list of the top 10 most bought US shares is based on overall trading volumes from 1 January to 23 December 2024.

Sriram provides her analysis of the year for each of the most popular US shares below.

Top 10 US shares that Aussie investors loved in 2024

The most bought US shares ranked in order of popularity are listed below.

Interestingly, only six of the Magnificent Seven stocks are included in the top 10. Facebook owner Meta Platforms Inc (NASDAQ: META) is conspicuously absent.

NVIDIA Corp (NASDAQ: NVDA)

NVIDIA shares rose by 171.18% in 2024 and closed out the year at US$134.29 per share.

This US tech share is incredibly popular among investors seeking exposure to the rising megatrend of artificial intelligence (AI).

A lot happened with NVIDIA in 2024. The company doubled its earnings and briefly surpassed Apple Inc (NASDAQ: AAPL) to become the most valuable company in the world.

NVIDIA also conducted a 10-for-1 stock split in May.

Sriram said:

Nvidia trades like the undisputed proxy for the AI market as the world's biggest tech firms including Amazon and Microsoft ramp up spending on the sector.

The firm's annual EPS in 2024 was US$1.19, a 585.63% YoY increase, after consistently beating earnings expectations each quarter.

Demand for its next-gen Blackwell GPUs appears to be spurring optimism for a strong 2025.

Tesla Inc (NASDAQ: TSLA)

Stock in electric vehicle (EV) manufacturer Tesla rose by 62.52% to close out the year at US$403.84 per share.

It was a tumultuous ride for the US consumer discretionary share in 2024, as Sriram summarises:

Tesla didn't have the best start to the year — three months in, it was the S&P's worst performer, down by nearly 32%. But the comeback was greater than the setback.

After a Q3 earnings beat, Tesla shares had their best day since 2013 and effectively erased the loss for the year.

CEO Elon Musk has also projected a 20% to 30% vehicle growth next year.

Investors will be looking for the company's "Year of Product Launches" to drive stock growth that matches its impressive 70% year-to-date share price increase in 2024.

Apple Inc (NASDAQ: AAPL) 

Apple shares rose by 30.07% in 2024 and closed out the year at US$250.42 per share.

Sriram said:

Investor sentiment in Australia was likely impacted by Apple's newest iPhones experiencing 44% more demand than its 2023 models in China, along with renewed optimism surrounding Apple Intelligence.

However, Apple's sustained success depends on whether next year's iPhone 17 launch can drive a 20 million unit increase in iPhone sales, as some analysts anticipate.

Amazon.com, Inc. (NASDAQ: AMZN) 

Stock in online retailing giant Amazon rose by 44.39% to close out the year at US$219.39 apiece.

Sriram said:

Shares hit an all-time high after Amazon's annual cloud conference, where the firm said its Trainium2 chips would hit the market.

With 30%-40% better price performance over the current generation of GPU-based instances, it's an offering that could take on Nvidia.

GameStop Corp (NYSE: GME)

GameStop shares rose by 78.78% in 2024 and finished the year at US$31.34 apiece.

Sriram said Gamestop traders have stuck around for longer than most people expected, commenting:

May 2024 saw the return of Keith Gill aka 'Roaring Kitty' — a key figure behind the retail trader-led short squeeze of early 2021.

GME shares rallied nearly 70% on the day Gill simply posted a cryptic image on his long-dormant X account. The rally resulted in a US$1.2b loss for short sellers, and helped Gamestop raise over US$2b from a share sale later that month — which added to its chunky cash pile of US$4.2b.

Interest earned on that cash helped somewhat offset the company's operating losses, but overall, the firm still reported an 18.7% YoY decrease in gross profit to $248.8m last quarter.

Palantir Technologies Inc (NASDAQ: PLTR)

Stock in data analytics and integration software provider Palantir Technologies rose by 340.48% in 2024 to US$75.63 apiece.

Sriram said this US tech share had "seemingly risen from the dead in 2024", with the company posting steady quarterly revenue growth and scoring significant share price gains.

"In Q2, Palantir closed 96 deals of at least US$1 million, with 27 of them being for over US$10 million," she said.

Palantir transferred its stock from the New York Stock Exchange (NYSE) to the NASDAQ in November.

Advanced Micro Devices, Inc (NASDAQ: AMD)

Advanced Micro Devices shares fell by 18.06% in 2024 and finished the year at US$120.79 per share.

Sriram said Advanced Micro Devices, a smaller rival to NVIDIA, delivered positive financial results in 2024, driven by robust AI demand.

She added:

AMD beat earnings estimates in the last three quarters and reported a gross margin of 50% on its US$6.8 billion in Q3 revenue. Revenue from its data centre business soared 122% YoY to US$3.5 billion.

However, its product announcements have frequently failed to inspire investor confidence, often leading to negative price movements.

Microsoft Corp (NASDAQ: MSFT)

Microsoft shares rose by 12.09% in 2024 and wrapped up the year at US$421.50 apiece.

Sriram said Microsoft had its ups and downs in 2024:

Microsoft began reaping the rewards of generative AI in 2023, but its performance this year has been more mixed. Its US$15b investment in ChatGPT creator OpenAI gave the firm an early edge in the AI race, but its big tech peers have now caught up.

The firm still reported a 16% YoY increase in revenue of US$65.59b in the latest quarter and 33% growth in its cloud unit, Azure. But future revenue guidance wasn't inspiring enough for investors, and the share price suffered its worst day in two years after posting earnings in October.

MicroStrategy Inc (NASDAQ: MSTR)

Stock in the software solutions company MicroStrategy rose by 358.55% in 2024 to finish the year at US$289.62.

MicroStrategy has a subsidiary called MacroStrategy to leverage its bitcoin holdings for financing purposes without directly impacting the parent company's balance sheet.

Sriram says the company is the cryptocurrency's largest corporate holder with more than US$30 billion invested.

Alphabet Inc Class A (NASDAQ: GOOGL)

Alphabet stock rose by 35.51% in 2024 and finished the year at US$189.30.

Sriram said Google's parent company was "an AI winner" last year.

She comments:

The 36% YoY growth in Google Cloud revenue to US$11.35b was a celebrated metric in the company's latest quarterly report, while advertising revenue also rose 10% to US$65.9b, leading to a 38% return for investors in 2024.

However, the company still faces the threat of a proposed breakup (which the DOJ is pushing for) and the potential fallout from that conclusion company-wide.

Despite the uncertainty, Alphabet's share price trajectory suggests that investors aren't too concerned about these antitrust regulations — at least, not yet.

Read about the 2025 outlook for US equities here: US shares: Is their phenomenal run done?

The post Top 10 US shares that Aussie investors bought most in 2024 appeared first on The Motley Fool Australia.

Let's review the top 10.

Top 10 most traded ASX shares in June

Here are the top 10 most traded ASX shares in June by volume (thus incorporating both buy and sell orders), according to Selfwealth Ltd (ASX: SWF).

We have also included the percentage of buy orders next to each ASX share.

Which ASX shares attracted the most buyer interest?

As you can see, ASX 200 mining giant Fortescue received the most buy orders among the top 10 shares.

The Fortescue share price tumbled 13.46% during the month of June. Perhaps investors saw greater value in the stock as the price declined.

Fortescue shares are now trading on a price-to-earnings (P/E) ratio of 7.92x. The Fortescue share price closed on Friday at a nine-month low of $22.10.

Top broker Goldman Sachs has a sell rating on Fortescue with a 12-month share price target of $16.20. But Michael Gable from Fairmont Equities says Fortescue shares are a buy.

BHP shares had the second strongest buying activity during the month.

The BHP share price closed on Friday at $43.40. Goldman has a buy rating on BHP with a 12-month price target of $48.40.

The iron ore price has been falling, and one major bank forecasts that the commodity will weaken further over the next year or so.

On Friday, the S&P/ASX 200 Index (ASX: XJO) closed at 7,959.3 points. It reached a new record high during intraday trading at 7,969.1. This was driven by news out of the US that inflation is easing.

The S&P/ASX All Ordinaries Index (ASX: XAO) closed at 8,206.1 points. The All Ords also set a new record high during intraday trading at 8,212.6 points.

Top 10 most traded US stocks in June

Here are the top 10 most traded US stocks in June among SelfWealth traders.

As shown, the quintessential artificial intelligence stock NVIDIA had the highest percentage of buy orders among the top 10 US shares.

The post Top 10 most traded ASX shares and US stocks in June appeared first on The Motley Fool Australia.

Some familiar names were on that list, including Apple, NVIDIA, Tesla and Amazon. But there were also a couple of surprises, such as Chinese e-commerce giant Alibaba and 'meme-stock' posterchild GameStop.

But what we didn't delve too deep into at the time was just how lucrative investing in US shares has been for ASX investors.

Almost every big name on the US market has had a stunning 2024 to date.

Take Apple. Apple stock has risen by a lucrative 25.5% year to date so far.

Tesla's 2024 gains have been slightly more muted at around 6%. But saying that, the electric vehicle and battery manufacturer is still up more than 80% since late April.

Amazon stock, on the other hand, has rocketed more than 33% since the start of the year. And Nvidia, the undisputed golden child of the American markets right now, has exploded 180% higher since the beginning of January.

So it's no wonder ASX investors have been trying to get a slice of this lucrative action.

But with portfolio-altering gains like the ones we've just discussed now under the belt, is it still a good idea to buy US shares today? After all, these gains are highly unusual over such a short time span, even by the high standards of the US tech giants.

Is it too late to start buying US shares like Nvidia?

Well, one ASX expert reckons ASX investors should stick the course. That expert is Tom Stevenson, investment director at fund manager Fidelity, and he is arguing that "It has rarely been sensible to bet against Uncle Sam".

Sure, the United States is looking at a fairly tumultuous back half of 2024. There's the November Presidential Elections, of course. But the US economy is also dealing with similar concerns over inflation and interest rates as we are. The level of economic uncertainty is high 'Stateside', and that often causes uncertainty on the share market.

Indeed, Stevenson acknowledges that the stunning stock market performance we have seen this year so far is rare, as we haven't seen a major American market pullback since "last autumn". He noted that, "There has only been a handful of periods in the past 30 years when we have gone this long without such a pullback in markets".

Even so, Stevenson tells investors that "this is not by itself a reason to worry", and goes so far as to state that "to a large extent this has been justified by economic and corporate fundamentals".

For starters, he points out that:

strong first half years often set investors up for a rewarding second half too. Since the beginning of the 20th century shares have only fallen seven times in the second six months after a strong opening to the year. The last time this happened was nearly 40 years ago. The second half return after a strong first half is higher than the average for all years too.

American exceptionalism

But Stevenson also points out that the strong share market performance of the American markets has been "justified by stronger corporate earning growth":

Since the financial crisis American shares have consistently outperformed those in the rest of the world but so too has the profitability of American companies. American market exceptionalism has been a reflection of exceptional American growth.

Indeed, America's exposure to the 'growth' investment style has been a massive boon to US investors. The period from 2009 to the start of the monetary policy tightening cycle in 2022 represented the longest unbroken outperformance of growth over value in the past 50 years. Wall Street has more exposure to the world's fastest-growing sectors and companies and less exposure to its laggards.

Stevenson isn't arguing that there aren't risks with investing in US shares today. He points to the current high valuations of US stocks and the concentration of the American indexes, thanks to the massive sizes of tech giants like Nvidia and Apple, as potential trip hazards for investors.

But even so, Stevenson concludes the same way he started, by arguing that "It has rarely been sensible to bet against Uncle Sam". No doubt that will be of some comfort for ASX investors looking to top up on their winning US shares today.

The post Is it too late for ASX investors to start buying US shares? appeared first on The Motley Fool Australia.

The US markets are home to what are indisputably the best companies in the world. Coca-Cola, American Express, Berkshire Hathaway, Netflix, Mastercard, Apple, NVIDIA, Amazon… these world-dominating companies are all US shares, and call the American markets home.

So it makes sense that ASX investors might want a slice of come of these businesses. After all, while ASX investors are justifiably fond of the likes of Westpac Banking Corp (ASX: WBC), Telstra Group Ltd (ASX: TLS) and Coles Group Ltd (ASX: COL), these ASX shares can't hold a candle to the names above when it comes to global dominance in their fields.

But many Australian investors might want to know which US shares are being bought by Australian investors in particular. Luckily, financial services and brokerage company eToro has provided some data on this subject.

The ten most popular US shares for ASX investors

Here are the ten most widely-held US shares on eToro's platform over the quarter ended 30 June 2024:

1. Tesla Inc (NASDAQ: TSLA)
2. NVIDIA Corporation (NASDAQ: NVDA)
3. Apple Inc (NASDAQ: AAPL)
4. Amazon.com Inc (NASDAQ: AMZN)
5. Microsoft Corporation (NASDAQ: MSFT)
6. Meta Platforms Inc (NASDAQ: META)
7. Nio Inc (NYSE: NIO)
8. Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL)
9. GameStop Corp (NYSE: GME)
10. Alibaba Group Holding (NYSE: BABA)

These ten US shares are unchanged from the previous quarter's figures. However, their positions in this top ten list have changed. Nvidia replaced Apple in the number two spot, while Nio was usurped by Meta in number six. Gamestop also bumped off Alibaba for the ninth position.

Meme stocks and tech giants

So it's not too surprising to see these companies take out the top US share positions for ASX investors. Tesla, Nvidia, Apple, Amazon, Microsoft, Meta and Alphabet (Google and YouTube owner) are all household names with products most of us probably use every day.

These US shares are well-known for having delivered massive windfalls to their investors in the past, which many ASX investors probably (and reasonably) assume will continue into the future, given their ongoing dominance.

Gamestop, Nio and Alibaba are more interesting though.

Both Gamestop and Nio have made names for themselves as 'meme stocks'. These shares are subject to huge swings in volatility on a regular basis, and have become popular 'swing trades'.

Chinese e-commerce giant Alibaba is one of the largest companies in China, but it has lost more than 75% of its value over the past four years or so. Consequently, some ASX investors may be betting on a big recovery.

But those are the US shares ASX investors have been buying over the past three months. Let's see if it's the same names that pop up next quarter.

The post Which US shares are ASX investors buying in 2024? appeared first on The Motley Fool Australia.

Not only did I think of this saying again today, I also felt it fitting that it was paraphrased from a movie – in this case the Disney (NYSE: DIS) animated movie Moana.

That is because, as I woke up this morning and checked the overnight news, I saw that the share price of American cinema company, AMC Entertainment (NYSE: AMC), increased by over 78% overnight.

On a whim, I then looked at the share price of GameStop (NYSE: GME), a company whose story is now intrinsically linked with AMC Entertainment. Yep, it too saw its share price rise dramatically overnight. In this case 75%.

It appears the "meme stock" days are back.

My first feeling was one of sadness.

I hoped that this was a saga that we left back in the dark days of the COVID pandemic. Whilst many saw it as an entertaining side show, or even a David vs Goliath story, I saw it differently. I knew that a lot of regular people were going to lose a lot of money that they couldn't afford to lose.

I watched with horror as people, many who were entering the markets for the very first time, piled into, what I believed to be, "bad" companies.

I've seen this film before. I know how it ends and I don't like it.

Unsurprisingly, fast forward a few years later, and the share price of AMC Cinemas is down over 99% and GameStop down 59% from their 2021 peaks. I am sure many of those who were wiped out will never trust the share market again despite it being, overall, a great tool for people looking to build wealth.

So, it is again I feel my stomach churn seeing the potential sequel with people piling into companies which, in my opinion, have really bad fundamentals and are suffering from an enormous list of structural headwinds that they will struggle to overcome.

I could go on and on about the various tips, techniques and lessons that I have learned to become the investor I am today. I could also go on for pages highlighting why I personally wouldn't touch the shares of the above businesses with a 100-foot pole. However, in this case, I feel there is only one thing to remind you all…

Whilst the share market can, and will, do almost anything in the short term. Over the long term, share prices tend to, almost always, track the fundamentals of the underlying business.

Some meme stockers will tell you that fundamentals don't matter. They are playing a different game. They'll tell you to just trust them. That I am part of the enormous Wall Street conspiracy looking to keep the regular folk down.

But fundamentals do matter. In fact, if you plan on holding for years, you can argue that they are the only thing that matter.

So, if you find yourself looking at the recent share price rise of companies like AMC Entertainment and GameStop and getting tempted to press "Buy", ask yourself, do I think these companies have good fundamentals? Do I think these companies are going to be earning significantly more revenue and profits in 2, 3, 5, 10 years' time than they are today?

If you, like a lot of others, think the answer is no. Then don't buy.

There are countless other opportunities (both from listed companies and passive investment vehicles like ETFs) that offer high quality, growing and profitable opportunities. So, don't waste your time trying to ride a wave of what many consider to be irrationality.

All you really need to do is buy great companies, at fair prices, and hold on to them for as long as they remain great companies.

It is that simple.

This is also the best way to make a short seller's life miserable, much better than trying to outsmart them by trying to fight them directly when the fundamentals are against you.

The post Invest in quality, not meme stocks appeared first on The Motley Fool Australia.

Dumb Money, which opened Thursday, is a biographical film about Keith Gill, the man who started a frenzy for shares in GameStop Corp (NYSE: GME) in late 2019 via posts on Reddit and YouTube.

The hype eventually led to a famous short squeeze on the struggling video game retailer's stocks in January 2021.

The incident led to mass losses for both institutional investors and retail shareholders.

The term "meme stock" came from the GameStop short squeeze to permanently enter the mainstream financial lexicon.

Here is ASIC's ad to run before Dumb Money 

The Australian Securities and Investments Commission is hoping that its ad before Dumb Money will raise awareness of the risks in riding ASX shares purely out of hype.

"They shouldn't believe the hype – if an investment sounds too good to be true, it probably is," said ASIC chief executive Warren Day.

"First-time investors should be particularly cautious and aware of the inherent volatility and complexities of market trading."

Pump-and-dump, gamified apps also under scrutiny

Those who do the hyping in order to sell their stocks at an inflated price are also reminded that such a "pump and dump" manoeuvre could be illegal.

Apps that try to "gamify" stock trading are also in the firing line of ASIC, as they can be psychologically addictive.

But ultimately, individual investors need to take responsibility for avoiding ill-considered purchases.

"Speculative stocks, by nature, are high risk, high reward, with uncertain prospects," said Day.

"With high-risk investments, you should be prepared to lose all of your money."

The post Dumb Money: ASIC's warning to movie fans (and ASX investors) appeared first on The Motley Fool Australia.

So we are certainly off to the races this year thus far.

Here at the Fool, we like to be eternal optimists when it comes to shares. Our own chief investment officer Scott Phillips recently spoke to Gemma Dale for NABtrade's 'Your Wealth' podcast. Scott was asked what he's excited about in 2023, so let's see what he served up.

1) Another year of compounding our wealth

Scott loves the compounding effects that the share market can bring patient investors. Here's some of what he said about 2023 and what it can bring to long-term shareowners:

You know I'm a massive fan of the Vanguard Index chart… a spectacularly good 30-year chart that Vanguard produce. Over the last 30 years to 30 June 2022, the market had turned $10 grand into $130 grand.

And so honestly, the thing I am most excited about is also the most boring thing, which is, this year will be one of the [next] 30 years. Investing [going forward] for the long term will be astonishingly successful and value-creating, in my opinion…

Part of it is not being too short term in your view (and one year is a short-term view). So I'm excited for people to continue to add money regularly to their investment accounts, diversify properly, invest intelligently, reinvest their dividends… all those things we know we should do.

2) A return to 'normal' ASX share investing

The last few years have seen some (frankly) crazy trends, fads, and occurrences in the world of investing. Near-zero interest rates, unprecedented government stimulus, and a pandemic have all upended financial markets.

This has resulted in crazes such as the 'meme stock' frenzy and the cryptocurrency and NFT mania. And who could forget the GameStop Corp (NYSE: GME) saga, where retail investors banded together to short a shorter?

But Scott is looking forward to things returning to 'normal' in 2023:

I'm excited that investing might become a bit more normal. The way I was taught to invest was simple, thoughtful business analysis, and paying the right price for that business.

Since the outbreak of COVID (and perhaps a little bit before that)… growth has been in the ascendency almost permanently. And that's happened largely because the circumstances have been so unusual… It's kind of distorted markets a little bit.

But if you look at 2023, we've got some inflation, we've got higher (or 'normal') interest rates, and business fundamentals matter again…

I think we'll end up in more normal times, and I think that's really good thing for most investors who want to put the time in.

3) The cheap ASX shares still out there

Even though the share market has been on a tear in recent months, Scott still reckons there are pockets of value that are well worth exploring right now. Here's an excerpt on which rocks he's looking under in the new year:

At the beginning of 2023, I'm looking around at some of these bombed-out share prices, and saying hey, some have bombed out for very good reasons… but one area I really like now is retail... The prices of some of these businesses are way too low, given their long-term potential…

JB Hi-Fi Ltd (ASX: JBH) is a great example. At [its recent prices], even if we have a recession, even if JB's profits fall by 20% this year but come back and grow from there, I don't see a scenario where they are at least the level they are now, and probably a lot higher in five, or seven or ten years' time.

The post 3 things Scott Phillips is most excited about investing in 2023 appeared first on The Motley Fool Australia.

Despite dropping 33% year to date, GameStop (NYSE: GME) stock is still up by a jaw-dropping 2,400% from the roughly $1.00 per share it was worth in early 2020. The company is flying high after the meme stock rally jacked up prices of heavily shorted equities.

But despite its lofty price tag, GameStop's fundamentals still leave much to be desired. Long-term investors should stay far away. Here's why.

A business in terminal decline?

Founded in 1984, GameStop has its roots as a brick-and-motor retail chain focused on new and used video game software. But like many companies that started in that period, its core business model became outdated with the rise of e-commerce, streaming, and digital downloads. And while GameStop has lasted much longer than other 80s babies like Blockbuster Video (which went bankrupt in 2010), the future looks bleak. 

GameStop's revenue has fallen 37% (from $9.55 billion to $6.01 billion) between 2012 and 2021. And the company has seen its market eroded by direct-to-consumer rivals like Valve Corporation's Steam, which allows users to download content directly from its platform. 

GameStop still has an economic moat as a place to buy and sell used games, but it is unclear if that niche will be enough to keep the company afloat. Forays into new businesses, such as non-fungible tokens (a form of digital collectibles), are yet to materially impact financial statements. And management's cryptocurrency efforts look more like a way to maintain hype for the stock than actually turn the business around, although time will tell.  

Second-quarter earnings were not impressive

GameStop's second-quarter earnings were lackluster. Net sales dropped 4% year over year to $1.14 billion because of a decline in software and hardware sales. And operating losses expanded from $58 million to $107.8 million in the period. That said, with $908.9 million in cash and just $32.1 million in long-term debt, the company has a healthy balance sheet.  

Instead of funding itself through cash flow and bond offerings, GameStop sells more shares of its (arguably) overpriced stock. This is the right thing to do from a business perspective, but it can harm shareholders by diluting their claim to future earnings, which lessens the fundamental value of their shares.

As of the second quarter, GameStop's outstanding shares totaled 304 million compared to just 66 million in early 2020. Investors should expect this number to continue growing because of the company's operational losses.

The valuation is simply too high

With a price-to-sales (P/S) ratio of 1.4, GameStop's stock doesn't look super overvalued compared to the S&P 500's average of 2.3. But those numbers don't tell the full story. The company operates in what appears to be a dying industry, with revenue eroding over the long term; plus, it isn't profitable and funds itself through equity dilution.

GameStop's valuation should be much lower in light of its many challenges. And investors should avoid the stock because of continued risk to the downside. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why I wouldn't touch GameStop stock with a 10-foot pole appeared first on The Motley Fool Australia.

While GameStop led the meme stock movement a year ago, today it's gains actually trail that of Bed Bath & Beyond and AMC, indicating that it might not be the focal point of the Wall Street Bets traders that it was early last year. The stock also trailed its meme stock peers on Friday, gaining only 4.3% in the previous session compared to double-digit gains for Bed Bath & Beyond and AMC.

What happened

Shares of GameStop (NYSE: GME) were rising today as part of a broader two-day rally in meme stocks, including AMC Entertainment Holdings (NYSE: AMC) and Bed Bath & Beyond (NASDAQ: BBBY). 

There was no particular news out on the video game retailer today. Instead, traders on Reddit's WallStreetBets teamed up to push the stock higher in a move reminiscent of GameStop's massive gains early last January.

As of 2:44 p.m. ET on Monday, the retail stock was up 8.1%.

So what

GameStop traders are trying the same play again. On WallStreetBets, traders are talking up GameStop and piling into the stock after shares have fallen back down to earth after a dramatic run-up last year.

GameStop stock is also not as heavily shorted as it once was. As of July 15, 22% of the float is sold short, meaning a substantial (but not overwhelming) percentage of investors are betting on the stock to fall.

Now what

Ironically, GameStop's meme bounce is coming at the same time as a sector slowdown in gaming. The NPD Group reported that consumer spending on video gaming fell 13% in the second quarter, and today, NVIDIA (NASDAQ: NVDA) stock fell after the chipmaker issued a disappointing second-quarter forecast due to a shortfall in gaming revenue. The video gaming industry was a big winner from the pandemic, so those headwinds are only natural as the pandemic effects fade.

GameStop stock rallied last year in part because Chewy Inc. (NYSE: CHWY) co-founder Ryan Cohen had begun accumulating a stake in the company, and he later joined the board, pushing the company to move deeper into e-commerce and areas like non-fungible tokens (NFTs). Though GameStop posted modest revenue growth in its most recent quarter, the company's losses actually widened, casting doubt on any potential turnaround.

While the stock could continue to rally with help from the WallStreetBets crowd, the fundamental case seems thin at this point.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why GameStop stock is gaining today appeared first on The Motley Fool Australia.

This will surely be welcome news to battered Sezzle shareholders.

The ASX buy now, pay later (BNPL) company has been under heavy selling pressure since mid-2021. And the scrapping of its merger with Zip Co Ltd (ASX: ZIP) last week Tuesday saw Sezzle shares tumble another 38% on the day.

In the latest news, Sezzle is suing United States-based GameStop Corp (NYSE: GME) for an alleged breach of contract.

Why is GameStop being sued?

Sezzle stated that it's suing GameStop for the company's failure to maintain links to its BNPL services throughout its website.

Sezzle said it had a two-year merchant agreement with GameStop as of November 2020 for use of its payments platform. The company alleges that GameStop violated this agreement when it removed Sezzle's "functionality from its cart page and product detail pages without notifying Sezzle in direct breach of the contract".

According to Sezzle, when GameStop was approached about the breach of contract, it terminated Sezzle without notice and now is no longer paying its invoices.

GameStop did reportedly admit that it had removed Sezzle's widget and that currently Sezzle is not used on its website.

Sezzle said it is now asking for $1.4 million in damages and related service fees that GameStop has failed to pay. The BNPL share is also looking to recoup marketing expenses it spent on GameStop's behalf.

How have Sezzle shares been tracking?

Despite the big leap higher today, Sezzle shares remain well down over the medium term.

Year-to-date, the Sezzle share price is down 92%, which compares to a 12% loss posted by the All Ordinaries Index (ASX: XAO) so far in 2022.

Over the past 12 months the picture is even gloomier, with Sezzle having tanked a painful 97%.

The post Own Sezzle shares? Here's why the BNPL company is suing GameStop appeared first on The Motley Fool Australia.

GameStop's (NYSE: GME) stock split announcement finally dropped. Investors have been waiting since March for the move after the video game retailer dramatically increased the number of shares outstanding from 300 million to one billion with the goal of splitting the stock.

The shares will split by a four-to-one ratio, meaning for every share you own, you get three more, but each one will be worth one-fourth the price they previously traded at. So, with GameStop recently closing around $135 per share, an investor with 10 shares will now own 40 stubs instead, but each will be worth only $33.75.

Unfortunately, the "mother of all short squeezes," or MOASS, that meme stock traders have been waiting for still will not happen. Just because GameStop's split will be in the form of a 'dividend' doesn't mean there will be any special impact on short-sellers. Yes, they'll have to buy back four times as many shares, but they'll be priced lower, just like investors who are long on the stock.

Gaming the system

GameStop, of course, is one of the premiere meme stocks on the market, often trading more on how much chatter is generated on social media and internet stock discussion boards than on the fundamentals of the business. In those circles, the self-described 'apes' have encouraged each other to hold firm and not sell their shares because a short squeeze, or fast and notable run-up, in GameStop's share price was imminent.

The video game retailer remains a heavily shorted stock -- over one-fifth of its shares are sold short. So, when GameStop said it would be splitting its stock as a dividend, that was seen as the catalyst to set the MOASS in motion. But that's not how it works.

A special kind of dividend

Most people are familiar with a cash dividend, where a company pays you a portion of its profits each month, quarter, or some other interval. As I explained once before, GameStop deeming its stock split a dividend is more a type of boilerplate language than some incantation with special powers.

Another heavily shorted stock, Tesla, has also said it will split its stock as a dividend, as do many companies. Alphabet's 20-for-1 stock split on July 15 will be in the form of a special dividend.

By declaring the split a dividend, a company is really only changing its accounting, essentially how much it keeps in its retained earnings account, and not much else. GameStop's stock dividend won't affect its cash balances as it would if it issued a cash dividend (which could cost short-sellers a lot of money), and the split won't trigger a new 'gamma squeeze' on its shares.

More important matters to address

While GameStop's stock typically doesn't trade on its fundamentals, that doesn't mean it never does. After announcing its stock split, the video game retailer also said it had fired its CFO and was laying off employees. After jumping 15% on the split announcement, the stock tumbled again in the aftermath of the firing and layoffs.

Meme stock traders like to claim the game is rigged against them and that the Securities and Exchange Commission is allowing illegal or improper activities. These traders are also basking in the camaraderie that develops in the chat rooms. Yet, they also tend to reinforce the notion that if they hold on just a little longer, they could wait out the monied interests better against their stock and realize significant riches when the MOASS occurs.

There may very well be a triggering event at some point, but GameStop's stock split isn't it.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The meteoric rise of GameStop (NYSE: GME) stock since late 2020 has drawn its share of detractors. The latest critic is the U.S. House of Representatives, whose Financial Services Committee believes regulators need to tighten rules on so-called "meme stock trading".

It remains unclear if or how much this attention will affect the retail stock. However, GameStop continues to face more pressing challenges that have little to do with Congress or the meme stocks it seeks to target.

The committee and GameStop

Much of the Congressional committee's focus was more directly tied to Robinhood than GameStop. It alleges that Robinhood's platform promoted "game-like" features that encouraged more stock trading.

Still, the committee cited the behavior of GameStop stock as exhibiting this trait. In the case of GameStop, traders leveraged social media to band together to buy the stock and attempt to unwind bets against GameStop by some hedge funds.

Whether these findings will result in additional regulations is not yet clear. Moreover, this has likely become another example of the regulatory framework significantly lagging the behavior of stocks and traders. Hence, it may come too slowly to materially affect GameStop stock.

How GameStop stock has boosted the company

However, GameStop faces more serious challenges from internal forces. Its stock plummeted to penny stock levels in 2020 for business-related reasons. The games it once sold had increasingly moved online, making the existence of GameStop less necessary.

Nonetheless, the meme stock craze sent the stock to record highs. Though it has never returned to the peak of $483 per share in early 2021, its current price of around $130 per share is far above its one-time penny stock status. This has allowed the company to issue shares and raise cash to keep itself afloat.

With the new funding, GameStop worked to revive its business. It closed numerous stores and established an online marketplace to sell game downloads. This made it a one-stop shop for finding games from numerous companies.

Additionally, it has ventured more heavily into new business lines. For one, it entered the collectibles business, which has given it unique goods to sell. It has also made plans to launch an NFT marketplace, though it has released few specifics about the new offering.

The problem with GameStop

Unfortunately, GameStop has chosen to enter the NFT market at a time when interest is fading in NFTs, according to NonFungible, an industry website. This will probably dampen interest in its new offering. Moreover, segments like online games and collectibles do not give GameStop much of a competitive moat. Consumers have numerous choices in either case, and its competitive edge does not appear to extend beyond its name recognition.

Furthermore, the company's financial picture continues to worsen. In Q1, its revenue rose 8% from a year ago to $1.4 billion. Also, faster growth in the cost of sales and selling, general, and administrative expenses dramatically widened operating losses. This took its net loss to $158 million, up from $67 million in the year-ago quarter.

Additionally, the pain will probably continue as video game sales saw a steep decline in May. Analysts are not expecting improvements; they predict 7% revenue growth for the year and widening net losses.

For now, GameStop holds just over $1 billion in liquidity. Still, with losses widening, it may have to return to the capital markets by next year if it cannot maintain its stock price. As its business continues to struggle, the prospects for its recovery appear increasingly uncertain.

Avoid GameStop stock

In the end, the House Financial Services Committee is the least of GameStop's worries. The committee has not responded quickly to the meme stock craze, and any action will probably come too late to affect GameStop.

The more significant concern is the future state of GameStop when that committee acts. The higher stock price has enabled the company to raise more capital and stay afloat for now. Nonetheless, its continuing losses and moves into weak-moat business lines will likely not boost investor confidence.

Admittedly, GameStop has held on to its passionate supporters on social media. They have proven their influence and have made GameStop dangerous to short. But given the poor recovery prospects, investors should consider staying away.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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During the first half of 2021, meme stocks like GameStop (NYSE: GME) and AMC Entertainment (NYSE: AMC) took the financial world by storm. Individual investors piled into shares of a handful of companies -- particularly beaten-down, heavily shorted stocks -- quickly making huge gains. As the stock prices soared, many of these traders used social media platforms to celebrate and to urge others to continue buying.

Over the past year, though, meme stocks have lost much of their lustre. Indeed, meme stocks' best days are probably behind them. In the long run, they simply cannot escape the underlying companies' poor performance.

Maintaining excitement is hard

The surge in meme stocks last year was surprising, but it wasn't unprecedented. There have been many such stock market 'bubbles' over time. However, these bubbles pop sooner or later.

In the early days of the meme stock craze, watching stocks like GameStop and AMC rocket higher was exciting. As the stocks rose, they gained more mainstream interest, leading to additional buying and even bigger gains.

But as time went by and meme stocks' gains slowed, most investors began to tune out. The resulting stock price declines made meme stocks even less exciting to the average American, as they no longer seemed like a ticket to quick riches.

The need for a devoted band of followers to prop up the share price has already doomed lesser meme stocks. For example, shares of Bed Bath & Beyond, Virgin Galactic, and BlackBerry made big gains during the peak of the meme stock craze. But over the past year, all three stocks have plummeted below pre-pandemic levels.

Three-year performance of selected meme stocks, data by YCharts.

Even AMC stock has risen less than 20% over the past three years, underperforming the broader market. Only GameStop has maintained big gains compared to 2019. And despite being the most popular meme stock, GameStop shares have fallen more than 70% from the all-time high of $483 they reached in January 2021.

A stag hunt doomed to fail

The "stag hunt" scenario from game theory also helps explain why meme stocks are poised for losses over time. In a stag hunt, everyone must work together to achieve the best outcome (capturing a stag). The risk is that some people settle for a sure thing with a smaller reward (catching a hare) and allow the stag to escape.

By acting as a group to buy (and not sell) shares of GameStop, AMC, and other names, meme stock investors generated huge paper profits last year. Even today, meme stock bulls continue to urge other investors to buy and "hold on for dear life" no matter what.

Maintaining this kind of cooperation over time is hopeless, though. Eventually, some people will choose to sell, perhaps to make a big purchase or perhaps simply to take some risk off the table. That's exactly what has happened over the past year, bringing meme stocks back to earth.

No substance to these stocks

Many years ago, investing legend Benjamin Graham aptly described the phenomenon behind meme stocks' performance. According to his most famous student -- Warren Buffett -- Graham said, "In the short run, the market is a voting machine ... but in the long run, the market is a weighing machine."

In other words, at any moment, a stock can be popular or out of favour for no good reason. But over time, a company's fundamental performance (i.e. revenue, earnings, and cash flow) is the main driver of its share price. Meme stock investors are learning this lesson the hard way.

Even at today's levels, shares of GameStop and AMC are extremely overvalued. GameStop is deeply unprofitable and burning cash rapidly. Its main growth initiative -- an NFT marketplace -- seems unlikely to fix things, given that crypto giant Coinbase's NFT marketplace has been a bust. GameStop's intrinsic value is probably closer to $1 billion than its current market cap of $10 billion.

Meanwhile, AMC would have trouble supporting its $5.5 billion debt load even if revenue and earnings returned to 2019 levels. And while theater attendance is improving, revenue remains well below pre-pandemic levels. That makes AMC's $6 billion-plus market cap very hard to justify.

In short, while the past year has been rough for meme stock investors, the future could be even worse, barring an unlikely surge in profits at GameStop and AMC.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Stock splits can be exciting events, right? They certainly draw attention to the splitting company, even if they don't necessarily move the stock price up.

Consider the fates of two would-be splitters, Tesla (NASDAQ: TSLA) and GameStop (NYSE: GME). Since announcing their respective share divisions in late March, the share prices of both have declined (GameStop by 13.2% and Tesla by 9.6%).

But softening share prices can often make companies more attractive. Let's see which of these contenders is the better buy opportunity right now.

A tale of two splitters

Tesla and GameStop aren't directly comparable as businesses, but they do share some similarities. Both have been criticized for the way they operate in the past and both have come close to bankruptcy at various points in their histories. The two companies are also the subject of constant, and sometimes frenzied, online discussion. This somewhat distorts the value of their stocks, as chatter and noise can knock a company's price around quite a bit.

Let's cut through the static and look at the fundamentals of the pair. Both operate in relatively high-cost and low-margin environments. Tesla cars require thousands of components, some rather expensive, and GameStop has to maintain a decent level of inventory and operate and staff brick-and-mortar stores. Earning a buck for the two companies, then, has been a challenge at times.

Electrifying growth for Tesla

Tesla is a recent arrival to the profit garage. Its bottom line has only recently been consistently in the black. It's managed to do this with a laser focus not only on EVs exclusively -- unlike slower-moving, auto-making competitors who are still beholden to the traditional internal-combustion engine -- but also because the "cool factor" is nicely baked into its vehicles. This is especially true with the popular, higher-end offerings such as the Model X SUV.

This is a business model expertly practised by Apple, whose iPhone line of products is still the premium smartphone line of choice for many consumers after 15 years. The beauty of this approach is that quality premium products command higher prices and, all things being equal, produce higher margins for their makers. That was a key factor in Tesla's dramatic lurch into profitability.

This success is combined with heady top-line growth. People want to own next-generation cars and desire to own Teslas. Demand continues to be bodybuilder strong and has helped lift revenue higher. Tesla's full-year 2021 sales were nearly $54 billion, a sky-high 71% improvement year over year.

Is it game on or off for GameStop?

During the coronavirus pandemic, GameStop grew to prominence because of the many online denizens posting feverishly about the company. For a time (and still to some extent these days), it was the company that personified the new term "meme stocks," with the outcome of entire trading days dependent on the tone of online discussions.

This kicked off in late 2020 with the most famous short squeeze in recent history. The shorts were ultimately routed, and GameStop began the roller-coaster ride it's still on today.

To be blunt, it's not a good investment based on the business fundamentals. While GameStop hasn't done badly squeezing out sales growth (18% in full-year 2021) lately, it's a retail dinosaur that usually loses money. Over the past four years, its annual loss has ranged from just under $215 million to nearly $800 million. Zooming in, the past three quarters have seen the flailing company slide increasingly deeper into the red on the bottom line.

And the winner is...

In one corner, we have Tesla as the highest-profitable operator in a red-hot segment in which demand shows no sign of cooling. In the opposite corner stands wobbly GameStop, weakened by a legacy business model that's hard to succeed with today and tough to pivot from. The company's also not a hot prospect to excel with behind-the-trend ventures, such as its recently announced non-fungible token (NFT) platform.

I suppose some argument could be made in favor of GameStop being far cheaper on certain, highly selected valuations. The company's price-to-sales ratio, for instance, stands at less than two, while that of ever-expensive Tesla is a bloated 24-plus.

Then again, Tesla is a zeitgeist company with its best years in front of it. GameStop is a gossip-prone, volatile stock fronting a money-losing business.

There's no real competition here. Admittedly, Tesla's valuations give me pause to think and its top management is a bit flaky for my taste, but it's built a powerful brand and will continue to be a leader in its segment. The EV specialist is unhesitatingly my pick in this contest.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The stock market continued its recovery on Tuesday, with solid gains that suggested investors have gotten past all the uncertainty that has hit Wall Street recently. There hasn't been much resolution to all the headwinds buffeting the business world, but market participants nevertheless seem to believe that the bear market in the Nasdaq Composite (NASDAQINDEX: ^IXIC) and corrections in other indexes have been overblown.

As of 1:30 p.m. ET today, the Dow Jones Industrial Average (DJINDICES: ^DJI) had risen 260 points to 34,831. The S&P 500 (SNPINDEX: ^GSPC) rose 44 points to 4,333, while the Nasdaq had gained 220 points to 14,058.

A couple of stocks stood out as showing new signs of investor enthusiasm from a couple of different angles. Alibaba Group Holding (NYSE: BABA) moved sharply higher, showing renewed interest in Chinese stocks. Meanwhile, GameStop (NYSE: GME) posted a massive advance in a victory for meme stocks. Below, we'll look more closely at the latest from both of these companies.

Alibaba boosts its buyback

Shares of Alibaba Group were up more than 12% in early afternoon trading on Tuesday. The Chinese internet giant made its own big bet on its stock, and investors were eager to ride its coattails. 

Alibaba announced that it would increase the size of its stock repurchase program. Previously, the tech company had authorized $15 billion to buy back stock, but the new authorization expanded that plan to $25 billion. Indeed, today's move marked the second time Alibaba had raised the size of its buyback plans, having started with just $10 billion in December 2020.

Alibaba's past buyback activity hadn't prevented a swoon in its share price up to this point, however. The company's most recent financial results showed that it spent $1.4 billion repurchasing 10.1 million shares in the fourth quarter of 2021, yet shares went on to lose nearly half their value after that report before bouncing back. Even now, share prices are 10% to 20% below the average price Alibaba paid on its repurchases during the last quarter.

U.S. investors remain concerned about whether the Chinese government will continue a harsh regulatory crackdown on Alibaba and its big-tech peers. Nevertheless, with shares at bargain prices, it's been harder to pass up Alibaba than it has been for a long time. 

Winning the game

Meanwhile, shares of GameStop were up nearly 30%. There wasn't any particularly noteworthy news from the meme stock standout today, but after having fallen to its worst levels since its late 2020 breakout, GameStop seemed to have investors focusing on what it hopes will be a promising future.

GameStop's earnings last week didn't generate an immediate turnaround, but investors seem to be looking back and finding reasons for hope from the numbers. Sales were up 6% from the previous year's quarter and rose 18% year over year for the full 12-month period. Even though adjusted losses widened from year-earlier levels, shareholders now seem to be focusing more on the potential for top-line growth.

One thing that could generate some excitement is GameStop's plan to establish a marketplace for non-fungible tokens (NFTs), which have gotten a lot of attention lately. Even as the traditional crypto market has shown signs of slowing down, innovation in the NFT arena has continued at a healthy pace.

Retail investors helped drive GameStop's stock higher in its initial phase upward, and they seem to be behind today's move as well. Those investors can be fickle, but some truly see real potential for GameStop's turnaround story to get a Hollywood ending. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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That episode, which saw shares for the video game retailer rise 1,500% in just a fortnight, brought mainstream attention onto the Reddit forum r/wallstreetbets.

The group plan to buy up GameStop stock to inflate its flagging share price was allegedly hatched in that discussion channel.

The term "meme stock" had well and truly arrived.

Crowd-picking stocks on social media and online chats has become so influential that institutional investors are now reportedly keeping a close eye on these forums.

As such, it's always interesting to keep tabs ourselves.

So let's take a look at the 5 most-discussed stocks on WallStreetBets as of Tuesday January 11 Australian time, thanks to statistics from Swaggy Stocks:

1. Tesla Inc (NASDAQ: TSLA)
2. GameStop Corp
3. Tilray Inc (NASDAQ: TLRY)
4. Invesco QQQ Trust Series 1 (NASDAQ: QQQ)
5. Nvidia Corporation (NASDAQ: NVDA)

Electric cars, cannabis and computer chips

Electric car maker Tesla needs no introduction, and regularly features among the most-discussed shares on Reddit.

After multiplying its share price 8-fold in 2020, punters were certainly interested in whether Elon Musk's company had become overvalued.

The bulls won out in 2021, seeing their shares increase another 50%.

The debate apparently still continues in 2022.

Tilray is a Canadian cannabis company that grows the plant in Canada and Europe and then sells it into the fast-growing US market.

The company listed on the NASDAQ in July 2018 with an initial public offer price of US$17 per share.

Many of those original investors may have left by now, with the share price languishing at US$7.29. It has lost 41% of its valuation just in the past 12 months.

Are the Redditors planning a crowd-induced surge?

Invesco QQQ Trust is an exchange-traded fund that tracks the NASDAQ-100 (NASDAQ: NDX) index.

With a heavy technology bias, the ETF has lost about 4.5% since the start of this year, so there may be some debate on WallStreetBets about buying the dip.

Rounding out the top 5 is chipmaker Nvidia.

Despite its origins in graphics processing units, the company has seen spectacular growth thanks to its innovations in artificial intelligence and data analytics.

Shareholders have enjoyed a marvellous ride, with the Nvidia stock price surging more than 10-fold over the past 5 years.

But despite still doubling over the past 12 months, the stock has cooled considerably in recent weeks. Since 7 December, Nvidia shares have lost 15.5%.

No wonder there is some discussion on Reddit as to whether it's a buying opportunity.

It's worth noting that Reddit is itself planning to list publicly this year, confidentially filing for an initial public offer last month.

No doubt Reddit shares will also make an appearance soon as one of the most-discussed shares.

The post Top 5 stocks mentioned on Reddit's WallStreetBets right now appeared first on The Motley Fool Australia.

If so, you're likely not jumping for joy.

It's no secret that interest rates have plunged to all-time lows over the past few years. A trend exacerbated by the onset of the global pandemic which saw the Reserve Bank of Australia (RBA) slash the official cash rate to an unprecedented 0.15%.

That's right about in the range of what you can expect from a term deposit, by the way. With shorter-term cash holdings yielding an even more meagre 0.05%.

Those yields were minimal even when inflation was virtually absent. But with consumer prices now rising quickly across the globe, the real (inflation adjusted) returns from cash deposits are well into the negative.

Which brings us to…

Interest paying crypto accounts "a paradigm shift"

Darren Abrams is the chief investment officer of digital currency provider Aus Merchant Investments.

Asked about interest paying crypto accounts, Abrams told the Motley fool, "Yield bearing accounts are a paradigm shift from traditional banking. I believe that this will be the 'killer app' that bridges DeFi [decentralised finance] and mainstream bank users."

Investors should take care to note that these types of yield bearing crypto accounts don't come with the Aussie government's deposit guarantee, as is the case with authorised deposit-taking institutions.

However, with inflation heating up and looking far less transitory than central bankers had hoped only a few months ago, Abrams says:

Applications such as Anchor Protocol (CRYPTO: ANC) offer a 19.5% yield on a USD pegged stablecoin. Compared to the average savings account that pays 0.05% interest, the impetus to utilise this functionality is immense and increasing exponentially as inflation erodes the purchasing power of fiat savings.

Digital assets still trade like risk assets

Having touted the potential game changing nature of interest paying crypto accounts, Abrams cautions that, "Currently, the whole digital asset market trades very much like traditional risk assets."

But he sees that changing for select cryptos over time:

Digital assets have evolved. As such they have a broad array of benefits and negative attributes. Bitcoin (CRYPTO: BTC) – and some other deflationary coins – are essentially the digital versions of hard money and therefore will eventually act as haven assets. Smart contract platforms that facilitate the financialization of the crypto economy are more akin to traditional risk assets.

What about meme crypto assets like Shiba Inu (CRYPTO: SHIB)?

You won't find Abrams lining up to snap up the next 'hot' meme crypto, like Shiba Inu. "As an investor, I see no inherent value in meme coins," he told us.

"However, I understand the power of a sense of belonging, which was clear during the GameStop Corp (NYSE: GME) saga," he added. "Therefore, I believe these meme coins are here to stay. However, I would never advise investing in any of them. If you're unsure, do some further research or seek professional advice before investing."

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Shares for GameStop Corp (NYSE: GME) then surged from US$20 to as high as US$483 in just a couple of weeks.

And with that, the term "meme stock" entered the mainstream lexicon.

There's been a massive influx of new and young stock investors since the COVID-19 pandemic shut everyone in at home last year. 

Add to that the share market's spectacular recovery from the March 2020 crash and it's not entirely a surprise that there is a crowd always seeking to jump on the next moonshot stock.

But, according to one expert, it's now time to take a cold shower.

Watch out, it's 2017 all over again

Forager Funds chief investment officer Steve Johnson said that his funds, including the Forager Australian Shares Fund (ASX: FOR), had a fantastic time enjoying the fervour for ASX shares in recent times.

"For us, being agile, open-minded and willing to be contrarian was more important than ever last year. It allowed us to invest in a collection of unloved businesses at once-in-a-lifetime prices," he wrote in Money magazine.

"And it paid off. The 2021 financial year was the best on record for Forager across both our Australian Shares Fund and International Shares Fund."

But ASX shares were now entering a different era, and the familiar indicators have Johnson worried.

"Right now, interest rates remain at record lows, stock markets are trading at all-time highs, people are inventing new metrics like revenue multiples to justify absurd prices for growth stocks, inflation is becoming a serious concern and COVID resurgences are weighing on the economic recovery," he said.

"More importantly, there are very few pockets of undue pessimism."

The conditions remind Johnson of 2017 when his funds tried to keep looking for hidden gems — then ate humble pie for 2 years.

So faced with the same situation now, he calls on investors to get serious.

"It is time, once again, to be thinking about the benefits of safe and boring," Johnson said. 

"Once again, like 2017, investor obsession with hyper-growth and high returns has left some of these stocks neglected."

Your ASX shares don't always have to stand out

According to Johnson, his team learned an important lesson from the difficult 2018-2019 period.

"You don't always need to be doing better than the crowd," he said.

"There is a time and place for contrarian bets. And there's a time for playing it safe."

Counterintuitively, taking a simple investment strategy is not actually that easy after a period of finding shooting stars.

"To turn to our loyal client base and say 'you know how we look for opportunity in unlikely places? Well, we just bought Downer EDI Limited (ASX: DOW)'," said Johnson.

"That doesn't sit well with how we view ourselves or what our clients have come to expect. And that's what makes it so hard."

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The electric vehicle and battery maker, with a market cap of some US$784 billion (AU$1.07 trillion) once again took top spot for most held shares by Aussie (and global) investors on eToro's investment platform.

We take a closer look at Tesla and the other 4 top held shares below.

But first…

What did eToro's top held shares list reveal?

One thing that jumps out from the top 5 held shares is that they can all be labelled as growth stocks. In fact, 9 of the 10 top held shares on the eToro platform in the past quarter ending 30 September were growth stocks.

On the surface that may be surprising, as more economists are beginning to suspect that the boost in inflation hitting much of the world might not be quite as transitory as they'd been hoping. Meaning the odds of earlier and potentially larger interest rate hikes from the world's central banks is increasing.

Higher rates could impact shares like tech companies, which are often priced with future earnings growth in mind. However, investors appear to be shrugging off those fears.

According to eToro's global markets strategist, Ben Laidler:

The fact that growth – and in particular big tech – stocks increasingly dominate portfolios suggests two things: firstly, that investors believe interest rate rises will be slow and steady; and, secondly, that they believe there is still plenty of mileage in growth stock earnings.

With that said, here are the top 5 shares held by Aussie investors in the quarter just gone by.

Tesla takes the cake

As mentioned up top, Elon Musk's brainchild Tesla, held onto its top spot for most held shares.

Commenting on Tesla's resilience among investors, eToro's Australian market analyst Josh Gilbert, said:

Australian investors are clearly passionate about investing in EVs, with Tesla once again dominating the local rankings. Despite Tesla's performance being quite lacklustre at the beginning of 2021, Australian investors have renewed their optimism after the company announced its latest Q2 earnings in Q3 2021.

The report demonstrated vehicle deliveries were up 122 per cent year-over-year, gross margins were continuing to swell and most importantly, guidance was strong for the rest of the year.

Staying with the tech theme but moving away from Tesla and EVs, the number 2 most held share by Aussie investors last quarter was Apple Inc (NASDAQ: AAPL), with a mind-boggling market cap of some US$2.4 billion.

Apple moved up from fourth spot in Q2.

According to Gilbert:

We can also see that Australian investors have increasingly favoured the defence end of tech with names such as Apple and Microsoft [the number 8 holding]. The balance sheets that these names possess can help Australian investors weather most market storms, whilst also finding growth in the tech space.

Coming in at number 3 for Q3 was fellow electric vehicle maker, Chinese company Nio Inc (NYSE: NIO), which held the number 2 spot in the previous quarter.

Indeed, investors appear well attuned to the continuing growth potential of the EV market. And for good reason. EV sales in the first half of 2021 were almost 3 times the number in the first half of 2020, and made up some 7% of all car sales.

Rounding out the list we have GameStop Corp. (NYSE: GME) as the fourth most popular share among Aussie investors. That's down one spot from the number 3 most popular share it held in the second quarter of 2021.

And Amazon.com, Inc. (NASDAQ: AMZN) came in at number 5, up 1 place from the number 6 spot it held in Q2.

Will Tesla remain king of the hill in the current quarter or will it be unseated?

Stay tuned.

The post Top 5 global shares held by Aussie investors in Q3 revealed: eToro appeared first on The Motley Fool Australia.

CommSec is one of the most popular brokers in the country. As such, this information gives us a useful insight into the US shares ASX investors are currently finding interesting.

So here are the top 10 US shares from CommSec last week. This week's data covers 30 August to September 3.

Tesla back on top

1. Tesla Inc (NASDAQ: TSLA) – representing 3.2% of total trades with a 57%/43% buy-to-sell ratio.
2. Alibaba Group Holding Ltd (NYSE: BABA) – representing 2.8% of total trades with an 84%/16% buy-to-sell ratio.
3. Apple Inc (NASDAQ: AAPL) – representing 2.5% of total trades with a 71%/29 buy-to-sell ratio.
4. GameStop Corp (NYSE: GME) – representing 2.2% of total trades with an 82%/18% buy-to-sell ratio.
5. Microsoft Corporation (NASDAQ: MSFT) – representing 1.4% of total trades with an 85%/15% buy-to-sell ratio.
6. NVIDIA Corporation (NASDAQ: NVDA)
7. Zoom Video Communications Inc (NASDAQ: ZM)
8. Alphabet Inc Class C (NASDAQ: GOOG)
9. Amazon.com, Inc. (NASDAQ: AMZN)
10. Lucid Group Inc (NASDAQ: LCID)

What can we learn from these trades?

Last week, we discussed the emergence of Chinese e-commerce giant Alibaba into the top spot on this list. Well, this week, Alibaba is still popular, but it's the Elon Musk-headed electric battery and vehicle manufacturer Tesla that takes out the top spot. Although saying that, investors appear pretty divided on what to do with their Tesla shares, seeing as the buy/sell ratio was at 57%/43%.

Tesla has been climbing in recent weeks, going from around US$665 on 17 August to US$753.87 as of last night (up 13.2%). Perhaps some investors are taking some profits off the table here.

But Alibaba is still in the number 2 spot this week and has a far more enthusiastic buy/sell ratio at 84%/16%. The Alibaba share price has continued to fall in recent weeks after a disappointing year in 2021 so far. The company hit a new 52-week low around a fortnight ago, so this might have tempted some bargain hunters to come out of the woodwork.

In other news, we still see sustained demand for the big US tech blue chips like Apple, Microsoft, Amazon, and Alphabet.

Zoom is an interesting addition though. This company has also taken a hit in recent weeks and is down more than 15% since last Monday (30 August). Clearly, we also see some bargain hunting going on here, judging by Zoom's 72%/28% buy/sell ratio.

And finally, we still see an appetite for the 'meme stocks' like GameStop and Lucid Group. Some 82% of trades were buys with GameStop, so there must still be some appetite for the kind of 'pops' this company has now become known for.

The post Here were the most popular US shares for ASX investors last week appeared first on The Motley Fool Australia.