Meme stocks have been receiving a lot of attention from both new and seasoned investors. These stocks gain overnight with dramatic surges due to well-planned social media hype. Popular platforms like Reddit allow retail investors to orchestrate price surges, leading to the impressive short squeezes we’ve seen of late.
Many of the stocks on this list either already saw a short squeeze or are a short-squeeze candidate. Many are good companies with reasons for investors to be excited. Others are struggling businesses with stock prices completely detached from their fundamentals.
However, in a hyper-speculative market like this, sometimes valuations don’t matter. It’s cringe-worthy to say, but it’s also true. Accordingly, speculators looking for meme stocks with the potential to actually squeeze may already be well aware of the names on this list.
For those who believe the momentum in the meme stock segment is far from over, reviewing the pros and cons of these companies is worth doing. For other investors looking for fundamentally-sound options, these are probably not the stocks you’re looking for.
That said, risk appetite is up, and as we’ve seen, anything is possible. Accordingly, these top seven meme stocks are on my watch list right now:
- AMC Entertainment (NYSE:AMC)
- GameStop (NYSE:GME)
- Robinhood (NASDAQ:HOOD)
- Greenridge Generation (NASDAQ:GREE)
- Upstart (NASDAQ:UPST)
- Corsair Gaming (NASDAQ:CRSR)
- FuboTV (NYSE:FUBO)
Meme Stocks: AMC Entertainment (AMC)
Perhaps the most highly-touted meme stock in the universe right now, AMC is a great example of a company with a valuation that’s completely detached from reality. The unbelievable thing is that AMC stock has held this valuation after squeezing multiple times this year.
As one of the largest movie theater chains in the country, AMC stock was hammered by the pandemic. Its price went from 2019 levels around $15 per share to a low around $2 per share in March 2020. Since then, the rest is history.
AMC stock rose to more than $20 in late January during the peak of short squeeze mania. However, a second squeeze in June took AMC stock to more than $72 per share, another parabolic swing higher.
Retail investors and speculators gambling on short squeezes have been right on a couple of occasions. Accordingly, this stock has become the poster child for investors looking to benefit from speculative largess in the markets.
One of the key drivers of AMC stock investors will be watching is how the upcoming blockbuster slate translates into the company’s earnings. The stock jumped 13% during the second week of September as Shang-Chi and the Legend of the Ten Rings saw box office records of $90 million over Labor Day weekend.
Interestingly, GameStop is the meme stock that kicked off the trend this year. This Kansas-based Fortune 500 company offers a wide range of games and entertainment that consumers can buy online or through stores. GameStop stock has been up by more than 900% year-to-date (YTD) and is currently trading around $188 per share.
The company has been working on major projects with the aim of expanding its core business. In July, GameStop announced that it is leasing a 530,000 square foot facility in Nevada. This move is part of the company’s plan to expand its North American fulfillment network. The facility will be operational by 2022.
GameStop is also working on another expansion project with a 700,000 square foot facility in Pennsylvania.
In June, the company completed an equity offering program through which it sold five million common shares that are worth about $1 billion. The company wishes to use the proceeds for its expansion projects and balance sheet maintenance.
These catalysts, in addition to the company’s transition toward an e-commerce-focused business model, has investors believing this meme stock has further potential.
Meme Stocks: Robinhood (HOOD)
One of the brokerage firms that enabled the short-squeeze trend, Robinhood has become a meme stock in its own right. Reduced minimum purchase requirements — which means investors can buy partial shares — and no-fee trading for equities has made the company extremely popular among the millennial investor crowd.
Indeed, many retail investors profiting off the momentum rally coming out of the pandemic have used Robinhood as their broker. The company’s market cap of $37 billion and user base of more than 18 million individuals highlights the value investors see in its platform.
That’s not to say HOOD stock isn’t without its own set of critics. The company has come under scrutiny for suspending trading on popular meme stocks during previous rallies.
Indeed, many retail investors who trusted Robinhood to make the investing process more transparent have turned against this platform. They have cited issues with the company’s payment for order flow business model that funds its zero-fee trading.
That said, those banking on more meme stock rallies and a surge of capital into the market from millennials like HOOD stock. This meme stock has plenty of potential for another momentum rally — that is, if the company can maintain its status among its core user base.
Greenridge Generation (GREE)
While not an original meme stock, Greenridge Generation is included because it recently closed its merger with Support.com, a relative newcomer to the meme trade. As the name suggests, the latter is a big player in the customer support sector.
Its meme status may surprise investors — what would retail investors want to do with a customer support company?
The reasons come down to its now-closed merger with Greenridge Generation, a Bitcoin (CCC:BTC-USD) mining company. If you think crypto miners and meme stock investors go together, you’re right.
Indeed, this merger provides investors with a leveraged way to invest in crypto. The company’s combined operations and ambitious growth plans have encouraged speculators of all stripes to consider this stock. Accordingly, Support.com somewhat quietly gained popularity prior to the merger.
Given the hype around the crypto space of late, I expect to see momentum with GREE stock. Investors looking for meme stocks that could run certainly have reason to consider this one right now.
Meme Stocks: Upstart (UPST)
Upstart, an artificial intelligence-based lending platform that wishes to disrupt and revolutionize the process, certainly has the makings of a meme stock. Indeed, the impressive rally UPST stock has been on recently suggests retail investors are buying in full force.
Since the end of July, shares of UPST stock have nearly tripled. This is a stock with a tremendous amount of momentum of late. That makes this a valid momentum play, if not a meme stock, by any rational investor’s standards.
Like the other stocks on this list, Upstart has a rabid retail investor following. The company’s business model of disrupting traditional credit scoring companies’ monopolistic hold on the market is fascinating. Those looking for companies that are true movers and shakers seem to like what Upstart is doing. In a way, I have to agree wholeheartedly with this sentiment.
Indeed, the company’s revenue growth has been impressive of late. Investors looking for fundamental reasons to own this stock certainly aren’t fooled by its valuation. There’s real reason to believe that Upstart can grow into it over time. That’s why this is the stock on the list I’m most bullish on right now.
Corsair Gaming (CRSR)
Computer peripherals and hardware manufacturing company Corsair has seen impressive revenue growth throughout the pandemic.
Indeed, CRSR stock had been on an incredible trajectory before the concept of meme stocks came into play. However, the company’s pandemic-induced gains seem to be fading away in recent times.
That’s not to say this is a stock retail investors aren’t interested in. The company’s short squeeze potential as rated by various sites is high. Accordingly, there’s a small subset of retail investors following this stock and banking on a squeeze play in the near-term. After all, looking at the performance of other beaten-up stocks, anything’s possible.
That said, traditional investors don’t seem to like the recent deceleration in Corsair’s growth rate. Its annual results showed that revenue growth jumped 55% in 2020. However, expectations are that top-line growth for 2021 might come in at “only” 12% to 24%. That’s not good enough for many hyper-growth investors.
Accordingly, investors are wondering if CRSR stock can squeeze. If not, is this a value pick at these levels?
Right now, the jury’s still out. That said, it’s a gambler’s market right now, and it appears some meme stock investors are throwing a few chips at this one. Let’s see where CRSR stock goes from here.
Meme Stocks: FuboTV (FUBO)
Similar to other meme stocks, FuboTV is getting a lot of attention due to its high short squeeze potential. As a result, the stock comes with high short interest, high borrow fee rates and other metrics that suggest such a scenario is possible.
Possible and likely are two different things. However, investors have reason to like this stock on a fundamental level as well.
FuboTV has been a hyper-growth stock. A beneficiary of the cord-cutting trend that has made streaming stocks fly, FUBO shares have done extremely well in recent years. This happens to be one of Cathie Wood’s picks, and is one that retail investors follow closely.
Whether FUBO stock is a true meme stock can be debated. However, the various momentum-driven swings in this company’s stock price are worth noting.
Accordingly, investors bullish on this stock for fundamental reasons or as a short squeeze candidate have reason to believe FUBO stock can see another rally. We’ll see what happens from here, but this is a stock I’m watching.
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On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.