American Eagle Stock Soars on Trump’s Social Media Endorsement

Retailer Becomes Latest Meme Stock Sensation

American Eagle (AE) shares experienced a dramatic surge of 24% on Monday, marking the most significant single-day gain since the year 2000. This remarkable climb followed public praise from U.S. President Donald Trump on social media, catapulting the apparel company into meme stock territory.

Presidential Endorsement Fuels Rally

President **Trump** highlighted the brand’s advertising campaign featuring actress **Sydney Sweeney** in a social media post, calling it the “hottest advertising right now” and describing the company’s jeans as “snatched out.”

“Genes” vs. “Jeans” Campaign Sparks Debate

The marketing push, launched in July with the slogan “Sydney Sweeney Has Great Jeans,” cleverly employed wordplay by using homophones for “jeans” and “genes.” A promotional video features **Sweeney** discussing how “genes are passed on from parents to children,” before transitioning to the tagline, “My jeans are blue.”

The initial release of this advertisement on July 23 saw AE’s stock price climb. **Sweeney**’s popularity, boosted by roles in series like “The White Lotus” and “The Eighteen Forbidden for Colleges and Universities,” contributed to the buzz.

Controversy and Speculative Trading

However, the ad also drew criticism, with some users interpreting the focus on a white blonde woman’s “genes” as echoing racist eugenics theories. Others countered that these interpretations were excessive.

**Trump**’s endorsement on Monday reignited interest in AE’s stock, attracting investors who thrive on speculative bets – a hallmark of meme stock phenomena.

“What are most meme stocks? It’s retail investors chasing the hottest stocks in the market.”

—Matt Maley, Chief Market Strategist at Miller Tabak & Co.

Year-to-Date Performance and Future Outlook

Despite Monday’s surge, AE’s stock remains down 20% for the year. The company has recently contended with subdued consumer demand and reported a $75 million inventory impairment charge last quarter. This situation highlights the volatility inherent in retail, as demonstrated by Gap’s stock dropping 15% in a single day in May 2024 after missing sales expectations (Reuters, May 2024).

“If anyone believes that the higher the discussion, the better the stock price, then that’s a big plus.”

—Steve Sosnick, Chief Strategist at Interactive Brokers

Sosnick anticipates it will take considerable time to assess the long-term impact of **Trump**’s statement.

The attention on American Eagle could persist, even without further direct endorsements. **Maley** noted that algorithmic trading can amplify buying and suppress selling pressures in the current market environment.

Celebrity Endorsements: Mixed Track Record

**Sweeney**’s role as a brand ambassador has previously yielded short-term stock gains for other companies, though sustained growth is not guaranteed. For example, Crocs’ shares rose 4.1% on the day they announced **Sweeney** as the global spokesperson for their HEYDUDE series last year, but the stock has still fallen nearly 30% year-to-date.