In this article, we will discuss 10 trending stocks to watch on Monday. To take a look at some more stocks that are trending, go to 5 Trending Stocks to Watch on Monday.
US stocks are recovering after closing in the red for the last seven consecutive weeks. Investors have factored in the recent volatility and are prepared to move forward as President Biden announced that he intends to lower tariffs on Chinese goods to benefit the local consumers and businesses. As of 11:01 AM ET, the S&P 500 Index, the Dow 30 Index, and the NASDAQ Composite Index are all up 1.08%, 1.54%, and 0.30%, respectively. Some popular stocks trending today include HP Inc. (NYSE:HPQ), Apple Inc. (NASDAQ:AAPL), and the NVIDIA Corporation (NASDAQ:NVDA).
Hadrian / Shutterstock.com Let’s look at why these stocks are trending today and discuss how hedge funds are positioned in them.
10. Tesla, Inc. (NASDAQ:TSLA) is up 2.01% as of 12:03 PM ET after the Austin, Texas-based electric vehicle company revealed that it anticipates production from its Shanghai gigafactory to recover back to pre-pandemic levels. From tomorrow, Tesla, Inc. (NASDAQ:TSLA) will see its daily production rise to 2,600 as opposed to the current level of 1,000 EVs. Previously, the largest automobile company in the world, in terms of market capitalization, was targeted to reach pre-lockdown levels of production by May 16. Tesla, Inc. (NASDAQ:TSLA) saw a drastic decline in Chinese monthly sales from 65,754 EVs in March 2022 to just 1,512 EVs in April 2022.
“Our core portfolio as of this writing—TSLA, SPOT, SHOP, ABNB, and AMZN—are all premier examples of companies that use the concept of aggregation of marginal gains to continuously improve their value proposition for customers. After all, what is innovation if not just a continuous search for fractional advantages in business?
The way we see it, Tesla is perhaps the generational example of the marginal gain aggregation theory. It’s also been our largest position for several years now. There are many ways to characterize and value this business (see previous letters for longform write-ups), but perhaps the best way to think about the company is that it is a highly vertically-integrated software and hardware firm that’s devoted entirely to aggregating marginal gains across its organization. The goal? Lower costs, improve thruputs, and dramatically enhance the value proposition—at scale—for consumers…” (Click here to see the full text)
According to Insider Monkey’s proprietary data, 91 hedge funds held a position in Tesla, Inc. (NASDAQ:TSLA) as of Q4 2021.
9. Twitter, Inc. (NASDAQ:TWTR) is 2.57% in the red as of 10:55 AM ET after Tesla’s CEO Elon Musk placed more pressure on the San Francisco, California-based microblogging and social media company during the weekend. Musk claimed that Twitter, Inc. (NASDAQ:TWTR) is not sharing information about the methodology behind the determination of fake accounts. The richest man on earth is looking to renegotiate the takeover deal at a lower price following the disclosure of spam accounts by Twitter, Inc. (NASDAQ:TWTR). Last month, Musk had agreed to buy Twitter for nearly $44 billion or $54 per share. However, the deal was put on hold after Twitter, Inc. (NASDAQ:TWTR) disclosed that nearly 5% of all accounts on its platforms are fake.
ClearBridge Investments shared its opinion on Twitter, Inc. (NASDAQ:TWTR) in its Q4 2021 investor letter. Here’s what the firm said:
“Weakness among our holdings in the communication services sector was the other detractor to performance. Twitter shares sold off following weaker than expected third-quarter results, but under new leadership, we see the potential for improved execution and performance as live events and entertainment return to pre-pandemic levels.”
The number of hedge funds invested in Twitter, Inc. (NASDAQ:TWTR) stood at 83 as of December 31, 2021.
8. Electronic Arts Inc. (NASDAQ:EA) is 1.94% in the green as of 10:56 AM ET following reports that the California-based electronic gaming and entertainment company is looking for a merger or a takeover by another company in the sector. Earlier, there were rumors that Electronic Arts Inc. (NASDAQ:EA) was in negotiations with NBCUniversal, but the talks did not materialize. However, the company is now looking toward a diversified technology conglomerate like Apple, Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), or the Walt Disney Company (NYSE:DIS).
“Electronic Arts detracted from portfolio performance during the fourth quarter. We also sold out of our position in the stock and used the proceeds to add to existing holdings that are better positioned competitively. The Company’s core FIFA franchise continues to thrive; however, the risk to this franchise has begun to rise as licensors demand a larger share of EA’s economics. Further, the Company’s execution around another core franchise, “Battlefield,” disappointed us, despite several previous comments from management that promised better execution. Although the Company’s equity appears cheap compared to estimates for earnings over the next 12 months, the risk to its core franchises extends beyond that time frame and we decided to redeploy capital into companies with better competitive positioning.”
On a sequential basis, the number of funds invested in Electronic Arts Inc. (NASDAQ:EA) decreased by 12 to 41 hedge funds in Q4 as compared to Q3.
7. GameStop Corp. (NYSE:GME) has risen 1.48% as of 12:08 PM ET after the Grapevine, Texas-based retailer of consumer electronics, gaming merchandise, and video games launched its digital wallet. This would allow gamers to send, receive and store various cryptocurrencies and non-fungible tokens (NFTs). The GameStop Wallet is an Ethereum wallet that will also allow transactions on GameStop Corp.’s (NYSE:GME) NFT marketplace, which is expected to be launched by the second half of this year.
Bronte Capital shared its stance on GameStop Corp. (NYSE:GME) in its Q1 2022 investor letter. Here’s what the firm said:
“Gamestop is a retailer of video games on DVD ROM trying hard (and maybe with some success) to reinvent itself as an alternative computer game distributor. The company raised enough money that bankruptcy is not an immediately likely outcome. (GME would have gone bankrupt except for the willingness of largely retail investors to provide them with much more cash.)
Both have bad financial results. Gamestop’s last financial results were terrible. And both stocks more than doubled very rapidly in March from market caps that were absurd to market caps that are more absurd. We are of course completely aware that they can double again and again after that. Their valuations are absurd but if you double the price they are not twice as absurd. They are just similarly disconnected from reality.
The reason we want to talk about them is that it is indicative of what is going on. Gamestop, the most meme of all stocks, announced a possible stock split and the stock, after market that day, traded up 17 percent. We could joke that every child knows that cutting a pizza into more slices yields more pizza. But in this market, not accepting that stock splits add value is a recipe for losing money.”
Out of the 924 hedge funds covered by Insider Monkey, 14 funds held the widely popular meme stock of GameStop Corp. (NYSE:GME) as of Q4 2021. D E Shaw had a stake worth over $122.3 million in GameStop Corp. (NYSE:GME) in Q1 2022.
6. VMware, Inc. (NYSE:VMW) has risen 20.05% as of 10:58 AM ET following updates that the Palo Alto, California-based cloud computing company is an acquisition target for Broadcom Inc. (NASDAQ:AVGO). According to initial reports, both companies are still negotiating, and there is a possibility that the talks might not yield a positive outcome. Broadcom is valuing VMware, Inc. (NYSE:VMW) at $50 billion. The deal is expected to close by Thursday, when VMware, Inc. (NYSE:VMW) is scheduled to report its quarterly results. Back in 2017, Broadcom tried to acquire QUALCOMM Incorporated (NASDAQ:QCOM) for over $100 billion, but the deal fell apart after the Trump government blocked it for national security concerns.
In its Q3 2021 investor letter, VMware, Inc. (NYSE:VMW) was discussed by ClearBridge Investments. Here’s what the investment management firm said:
“To make room for Netflix and better concentrate the Strategy in our highest-conviction names, we exited positions in software makers VMware. VMware, best known for its system visualization software, is in the earlier stages of an on-premise to cloud transition that could add volatility to growth and cash flow in coming years. At the same time, the company also recently announced several key leadership changes and will have higher financial leverage following the upcoming spinoff from Dell — expected in the fourth quarter.”
As of Q4 2021, VMware, Inc. (NYSE:VMW) was being held by 50 hedge funds.
In addition to VMware, Inc. (NYSE:VMW), some other trending stocks on Monday are HP Inc. (NYSE:HPQ), Apple Inc. (NASDAQ:AAPL), and the NVIDIA Corporation (NASDAQ:NVDA).
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Disclose. None. 10 Trending Stocks to Watch on Monday is originally published on Insider Monkey.