Tesla (TSLA) proved to be the most-searched-for stock worldwide, where it was the leading stock in 10 countries. Many factors contribute to Tesla’s popularity, such as its impressive growth from 2016 to 2022 where it experienced a 1,631% increase in units sold.
The electric carmaker introduced a mild price increase across numerous countries earlier this week, including in the US, Canada, China and Japan. But the prices of its top-selling models remain lower today than earlier in the year following multiple price cuts that have stoked fears about demand and profitability.
Tesla is also widely considered a “meme stock” due to CEO Elon Musk’s regular tweets about the company, which has been known to cause erratic share price movements.
BP (BP) ranks second with 1,992,000 monthly searches. The British oil and gas company also ranks as the number one most-searched-for stock in the UK with 165,000 monthly searches. BP’s rise in search interest is likely due to its recent record profits of £22 billion for 2022 and the social media attention surrounding the announcement. BP’s share price rose 7% in early 2023 when the profits were announced.
While BP may have been the subject of discussion among retail investors, it is not considered a meme stock in the same way as stocks like GameStop or AMC Entertainment are. That’s because it doesn’t experience the same dramatic price movements caused by social media-driven speculation.
In third place is the Singaporean internet company Sea Ltd (SE), which has amassed 1,564,800 monthly searches, 427,200 less than BP. Despite this, Sea Ltd stock doesn’t rank within the UK’s top 21 stocks. The stock is most popular in the United States, India and Brazil.
What are meme stocks?
Given the increasing popularity of meme stocks – such as Tesla – and the volatility social-media-driven stocks can cause, it’s important for retail traders to understand the phenomenon before making any decisions.
Josh Warner, Market Analyst at City Index, said, “A meme stock refers to a publicly-listed company that has grabbed the attention of retail traders and is stirring discussed on social media forums. Hype is created on these forums and fuelled by rumours, speculation, and theories – many of which ignore what can often be flawed fundamentals.
“GameStop and AMC Entertainment are widely thought to be the two original meme stocks.
“Although many traders look for inspiration on social media forums, meme stocks are known for considerable volatility. They’re almost akin to small-scale speculative bubbles, driven mainly by sentiment.
“To manage the risk of volatility, you should attach stop losses to your positions, to close your trade once the market turns against you. But in fast-moving markets, stop losses can’t always be executed at your desired price.”