GME Stock Pops 10% as Retail Investors Flock Back to Meme Stocks

Boy, it’s a volatile market out there right now. For meme stock investors, GameStop (NYSE:GME) doesn’t seem to disappoint in this regard. Today, GME stock caught a major bid in earlier trading, surging more than 32% at intraday highs, before settling down toward gains of just below 10% at the time of writing.

GameStop (GME) video game and electronics store logo sign in Bay Terrace, Queens, NY.
Source: quietbits / Shutterstock.com

This move hasn’t necessarily changed the longer-term trend for GME stock, which has still roughly halved since the end of March. However, it is an indication that retail buyers may be flocking back to meme stocks in a big way.

There are a number of potential reasons for this. Many retail investors may be looking at the recent declines in the stock market, comparing such declines to the pandemic. With incredible monetary policy stimulus, the U.S. central bank found a way to avoid recession and create a goldilocks period that took speculative stocks on an incredible run. Many investors who have not invested through previous crashes may think that such a scenario is more likely to play out than a full-on market crash. Time will tell in this regard.

However, there are other dynamics driving retail buyers to GameStop today. Let’s dive into what the retail crowd may be looking at when it comes to this favorite.

Why Is GME Stock Surging Today?

Interestingly, GameStop is among other meme stocks seeing renewed interest today. In fact, GME stock was halted a few times, as volatility-related circuit breakers were tripped.

So, what’s behind this move?

Well, some seem to think that short squeezes may be much easier to orchestrate in this environment. Due to lower market capitalizations, stocks such as GME may be easier targets for not only retail investors but also funds or trading shops to force squeeze events. While today’s attempt at a squeeze may be just that, the spike in GME stock we saw was certainly noteworthy to investors betting on such a move from here.

In this market, a series of macro headwinds are providing resistance for such moves. That said, there appears to be an appetite for GME stock once again. In any case, this will be a fun stock to watch from here.

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.


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