Retail Investors Drive Momentum in These 4 Stocks

Jim Cramer has identified four stocks, Palantir, AppLovin, Robinhood, and Coinbase, that he believes have momentum due to retail investor enthusiasm. He calls this group "PARC" and expects them to continue rallying. Cramer notes that these stocks have solid earnings and analyst attention but are driven by irrational retail investors. He advises investors to exercise discipline and take profits when they arise.

Investment expert Jim Cramer has identified a group of four stocks—Palantir, AppLovin, Robinhood, and Coinbase—that he believes have significant momentum due to retail investor enthusiasm. Dubbing them "PARC" (Park), Cramer expects these stocks to continue rallying, driven by strong earnings and analyst attention. However, he cautions investors about the volatility associated with these stocks and advises taking profits when opportunities arise.

On July 14, Cramer presented "PARC" on his social networking service (SNS) X, noting that these stocks are characterized by extreme volatility and high trading volume. The stocks have shown stronger volatility than the S&P 500 index this year, with notable gains and losses [1]. For instance, Falantier and Aplovin closed higher on July 14, while Robinhood and Coinbase also saw gains. However, investors who bought these stocks at the wrong time can suffer enormous losses.

Cramer acknowledges that these stocks are meme stocks, popular among individual investors and on social media. He advises investors to exercise discipline and take profits when they arise, as these stocks can be a "double-edged sword" [1]. Investors who bought Robinhood at a low point on April 8, when concerns over the tariff war peaked, are making a return of 192.54% on the day Robinhood hit its highest price of the year. Similarly, investors who succeeded in buying and selling the lows of Coinbase and Palantir this year were able to achieve up to 160.12% and 129.53% respectively.

However, Cramer also notes that these stocks are not without risk. The biggest drops recorded by each of these stocks this year were -48.75%, followed by Aplovin (-57%), Coinbase (-49.73%), Robinhood (-47.66%), and Palantir (-40.61%) [1]. This volatility is more than twice as large as this year's biggest fall (-18.9%) in the S&P 500 index.

Art Hogan, chief market strategist at B. Riley Wells Management, agrees that the stock market has turned into a risk-taking attitude since the second quarter. "Traditional investors went back to Apple, Amazon, and Microsoft, but YOLO. Investors are rushing to extremely risky stocks," he said [1].

In conclusion, while Cramer believes that the "PARC" stocks have momentum and potential for growth, he also cautions investors about the volatility and risk associated with these stocks. Investors should approach these stocks with a disciplined and cautious approach, taking profits when opportunities arise.

References:
[1] https://www.mk.co.kr/en/stock/11368843