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.

“It 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.”

—Steve 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.

Opendoor Technologies, trading under the ticker $OPEN, has experienced a significant surge in trading activity, drawing considerable attention on the online forum WallStreetBets, a platform previously associated with the GameStop stock phenomenon. The increased interest in Opendoor’s stock has been partly fueled by hedge fund manager Eric Jackson, an investor in the company, who has publicly projected that the stock could reach $82 per share.

The sentiment among some investors is reflected in posts such as “HODLTHE($OPEN)DOOR.”

Trading volumes for Opendoor shares saw a dramatic increase, with 1.9 billion shares exchanged on monday. This volume represents a more than 1,700% rise compared to the three-month average, according to data from FactSet.

Approximately 22% of Opendoor’s publicly available shares are currently sold short. This high short interest suggests that short-covering activity may be contributing to the stock’s recent rally. Short sellers often buy back shares to limit their losses when a stock they have bet against experiences a rapid price increase, and this buying pressure can further elevate the stock price.

The rally has also been intensified by heightened activity in options trading for Opendoor. Bespoke Investment Group has identified Opendoor as a prime example of the recent trend of increased optimism in the options market.

“That stock is up 500% in three weeks; total call open interest has tripled over that time period,” Bespoke noted in a client dialog. “Surges in call buying are driving extreme moves higher for a small slice of the market, even as most other stocks drop.”

Opendoor entered the public market in 2020 through a special purpose acquisition company (SPAC) deal, capitalizing on the broader SPAC trend and the market enthusiasm driven by low interest rates and the economic conditions of the COVID-19 era. The company’s buisness model focuses on leveraging technology to facilitate the buying and selling of homes, aiming to profit from the price differences.

Don’t miss these insights from CNBC PRO

: 2025-07-22 20:12:00

Kohls Corp

Heavily shorted small stocks that are starting to rip this week