Key Takeaways
- Wall Street commentator Jim Cramer last week coined an acronym comprised of four of Wall Street’s favorite momentum stocks: “PARC,” which stands for Palantir, Applovin, Robinhood, and Coinbase.
- The stocks are some of the market’s best performers in the last year, with 12-month returns ranging from 50% to more than 400%.
- They are also popular stocks with retail investors, who are often paying a premium to own a piece of buzzy AI and crypto stocks.
There’s a new acronym on Wall Street, courtesy of CNBC’s Jim Cramer.
“PARC” stands for Palantir (PLTR), Applovin (APP), Robinhood (HOOD), and Coinbase (COIN), four stocks that have been on a tear recently. “A new acronym for the meme stocks that just won’t quit,” Cramer wrote in an X post revealing the acronym last week.
The four stocks have ridden a wave of enthusiasm for Wall Street’s favorite themes to rank among the best-performing large-cap stocks of the last year. AI hype has lifted shares of Palantir and Applovin more than 400% and 300%, respectively, in the past year. The Trump administration’s embrace of cryptocurrencies and looser regulations have boosted Robinhood and Coinbase by about 350% and 50%, respectively.
The group’s momentum has made them favorites among retail investors. Palantir and Robinhood were the third- and fourth-most popular stocks with individual investors in the first half of the year, according to data from Vanda Research. All four were among the 30 stocks with the most call option trading in the first half, a sign of their popularity with a more sophisticated, risk-taking cohort of retail investors.
The PARC stocks’ outperformance over the last year has also made them some of the priciest issues on Wall Street. Palantir’s price-to-earnings (P/E) ratio on Monday stood at about 660, nearly twice the next highest in the S&P 500. The rest of the group’s P/E ratios range between 60 and 80.
PARC’s hefty price tag and speculative sheen may explain why X users were so quick to poke fun at Cramer. Some joked the stocks could be aptly described by reversing the order of the acronym. Others took umbrage with Cramer’s saying the highly profitable tech companies are meme stocks akin to ailing and indebted businesses like GameStop (GME) and AMC (AMC).
Some users speculated that Cramer’s ordaining the PARC stocks “this market’s redhot four” would spell trouble for the group. “A funny (but often true) contrarian signal has been Jim Cramer’s picks… is it the kiss of death for these stocks or can these stocks hitting ATHs overcome the JC love?” wrote one user.
So far, that hasn’t been the case; all four stocks are up between 2% and 5% since Cramer’s recommendation. It also wasn’t the case for another acronym popularized by Cramer over a decade ago: FANG, which stands for Facebook—now Meta (META), plus Amazon (AMZN), Netflix (NFLX), and Google parent Alphabet (GOOG).
Those stocks have hardly been hurt by Cramer’s recommendation. Netflix shares have risen more than 9,000% since Cramer’s recommendation, while Meta and Amazon are up more than 2,400% and 1,600%, respectively. Alphabet, already one of the world’s largest companies in 2013, has returned more than 500%.
