Meme Stock Frenzy Reignites with New Targets
Retail Traders Flock to Beaten-Down Shares Amid Market Euphoria
The speculative fervor of meme stock trading has returned, with retail investors on platforms like Reddit’s WallStreetBets forum shifting their focus to a new set of companies. This resurgence coincides with broader market gains pushing the S&P 500 to record highs.
Shifting Sands of Speculation
Day traders are now targeting companies such as OpenDoor, Kohl’s, GoPro, and Krispy Kreme, moving away from previous favorites like GameStop and AMC. This rotation signals a broader trend of risk-taking among individual investors.
Market Euphoria and Warning Signs
Wall Street strategists view the meme stock revival as an indicator of market euphoria. The S&P 500’s recent rally, boosted by positive tariff news, has brought its 2025 gains to over 7%. However, some experts caution that the market may be becoming overheated.
โIt does send a message about broader market risk. It’s kind of like this very distant red flag suggesting that you know what, maybe the market is getting a little frothy here.โ
โSteve Sosnick, Interactive Brokers Chief Strategist
Identifying Potential Next Targets
A screen of U.S. stocks identified potential meme stock candidates based on specific criteria: short interest exceeding 30% of float, market capitalization between $50 million and $2 billion, and a share price below $20. These metrics often indicate stocks ripe for speculative attention.
Some of these identified stocks have already seen significant price increases. Beyond Meat surged over 10% on Wednesday without any specific company news, while 1-800-Flowers.com experienced a nearly 19% jump. Kohl’s also appeared on this list of potential speculative targets.
The current meme stock surge echoes the broader trend of retail investor activity seen in early 2021. For example, the average daily trading volume for retail investors on platforms like Fidelity surged by 38% in the first quarter of 2024 compared to the same period in 2023, indicating sustained retail engagement in the market. For instance, Kohl’s (KSS) saw its shares jump nearly 17% in intraday trading on Tuesday, climbing to $27.02 after trading as low as $23.32 on Monday. This move follows a period of significant decline for the department store chain.
Investors are warned that these speculative rallies can be short-lived, and participation carries significant risk. The data used for screening was sourced from FactSet.