Broadly speaking, social networking's capacity to let us share doctored digital images hasn't proven helpful to investors. Not only do memes fail to paint the full picture of a stock's risks and rewards, social media platforms open the door to speculators' abuse. That's why these amateur and anonymous sources of investing ideas are often best left avoided.
Just because a company's the focal point of a meme, however, doesn't inherently mean it's not a name worth owning for the long haul. Here's a closer look at three names that have been heavily featured in memes, yet are still great long-term picks.
Yes, the company that arguably pioneered smartphones is still around, although BlackBerry Limited's (BB 1.54%) no longer making them. A handful of manufacturers are still licensed to use the brand name, but BlackBerry's new focus is software. Cybersecurity, encryption, remote-working solutions, and the Internet of Things are its key profit centers now. Notably, its QNX platform is well-suited for use in connected automobiles, and has been installed in more than 200 million vehicles to date.
The company is only a fraction of its former self. Ditto for the stock. Merely intermittent profits since 2012's revenue peak haven't helped bolster the bullish case.
Take a step back, though. Today's BlackBerry is operating in all the right spaces. Connected cars and mobile security feature prominently in the future, with most of their growth ahead rather than behind. Fortune Business Insights estimates the cybersecurity market will expand at an average annualized clip of more than 13% through 2029, while the connected car market is projected to grow by more than 18% per year through 2028. Fortune further says the Internet of Things industry will likely grow on the order of more than 26% per year through 2029.
BlackBerry's evolved -- maybe devolved -- into a meme stock mostly because of its fall from grace. It was all but forced out of the smartphone businesses it's largely credited with creating, but its current software focus is a relatively new development. Such sweeping strategic shifts make it an easy target to criticize as well as cheer. The thing is, all of the aforementioned long-term growth outlooks play right into the hand BlackBerry Limited is now holding.
For years, electric vehicle (EV) company Tesla was the only major player in the business. The name is nearly synonymous with the term, in fact, in that Tesla not only mainstreamed EVs, but gave them a much-needed cool factor.
But nothing gives rise to competition like a little success.
Enter Lucid Group (LCID -3.90%). Although it's nowhere near as big as Tesla currently is, there's plenty of time and opportunity to catch up with the industry leader. The U.S. Energy Information Administration believes the number of EVs traveling the world's roads will swell from around 10 million as of last year to more than 670 million of them by 2050.
Lucid only delivered 125 electric vehicles in 2021, and a total of only a little over 400 cars since it began making them. This is a breakout year for the high-end electric vehicle manufacturer, though. Lucid believes it will be able to make between 12,000 and 14,000 battery-powered automobiles this year on the heels of newly added factory capacity, which is still less than half of the 25,000 orders it's received so far.
The company's edge is its target market. Whereas Ford and General Motors are focusing the bulk of their EV attention on the mid-price market and Tesla's affordable Model 3 accounts for a huge chunk of its production, Lucid is turning heads among those shopping for high-end electric vehicles. With a base price near $80,000, the Lucid Air is MotorTrend's 2022 Car of the Year, while the sold-out "Dream" edition of the Air starts at -- or started out at -- a price of $169,000.
It's still a start-up to be sure, with all the usual risks thereof. With 25,000 people already ordering the company's EVs practically sight-unseen though, the future beyond those orders is bright to be sure.
Finally, add SoFi Technologies (SOFI 0.38%) to your list of meme stocks that could actually pay off for investors willing to hold them long enough.
Its roots are in the student lending market, although SoFi has evolved into so much more. Conventional banking, auto loans, credit cards, and investments are all now part of its repertoire. The company's 3.8 million customers produced roughly $1 billion worth of revenue last year, and its top line is expected to grow another 11% this year. That forward progress is also chipping away at the fintech outfit's losses; at its current rate of progress SoFi should be swinging to a profit sometime in 2024, give or take a couple of quarters.
Driving this growth, however, is something curious. That is, while SoFi is a bank in nearly every conceivable way, it doesn't have any brick-and-mortar branches to serve customers. It's an entirely online bank, accessed by an app.
It's hard to believe such a minimalized offering is capable of producing the 47% revenue growth analysts are expecting SoFi to produce this year, with another 38% worth of improvement in the cards for next year. After all, the company is competing with some well-entrenched physical banking outfits.
But people are increasingly OK with online-only banking options. A recent survey performed by PwC indicates that around one-fourth of U.S. consumers would prefer to open a new bank account online, while 32% of them prefer to avoid physical branches altogether for regular service. Moreover, more than 60% of the country's residents now interact online on a weekly basis with their preferred bank. And those numbers are only going to rise as the population ages and an ever-larger proportion of us only know a world where mobile internet is the norm.