When GigaCloud Technology (NASDAQ:GCT) popped on its first day of trading, investors everywhere noticed. In fact, they were watching closely. Wall Street had just watched fellow Chinese tech firms AMTD Digital (NYSE:HKD) and Magic Empire Global (NASDAQ:MEGL) demonstrate unprecedented surges after their trading debuts. As those names spiked, speculation rose around whether U.S. markets were witnessing another wave of meme stocks. Almost one month later, GCT stock is still rising steadily, although its peers have been slowly declining.
Since its initial public offering (IPO), GCT stock has spiked about 50%. Although it dipped late last week as bearish energy swept over the markets, it has since rebounded. Shares are now back in the green today. As of this writing, GCT stock is up about 60% on the day.
Meanwhile, both HKD and MEGL are steadily trending downward and don’t look poised to make a comeback anytime soon. That said, all three Chinese tech stocks have proven they can rise unexpectedly, taking markets by storm. Does that mean GCT stock is a good buy at its current price?
Let’s take a closer look at what investors can expect.
What’s Happening with GCT Stock
One thing we know about meme stocks is that they often move on collective momentum. We saw as much as HKD and MEGL skyrocketed to Wall Street’s radar last month. But investors also know that meme stock rallies are often short-lived, particularly when they drive new stocks to such heights. Many retail investors were looking for the next IPO from a Chinese fintech firm before either MEGL or HKD even came down. GigaCloud fit that bill perfectly, so investor interest was high as it began trading on U.S. markets. InvestorPlace contributor William White observed the following amid the stock’s surge on Aug. 19:
“It looks like meme stock traders have latched onto GCT shares as one of their big investments […] That resulted in heavy trading yesterday as investors pumped up shares of GCT stock with its IPO. This saw shares rise as much as 62% yesterday and that momentum isn’t stopping today.”
Almost two weeks later, the momentum has picked back up again. GigaCloud hasn’t released any company-specific news and things haven’t necessarily been a good for tech stocks. The Nasdaq Composite is still down today, despite an attempted rally this afternoon. So, both trends indicate that the current GCT stock surge is being driven by strong meme interest in the stock, likely from the Reddit r/WallStreetBets crowd.
Data from ApeWisdom supports this thesis; according to the meme stock analytics platform, interest in the stock spiked this morning, with mentions rising by more than 4,000% over the past 24 hours. Overall sentiment for GCT across various social media forums is high.
The Bottom Line
ApeWisdom doesn’t show as much interest for either HKD or MEGL, so it’s possible that investors are no longer looking at the two Chinese fintech names. Rather, they seem to have turned their attention to the more recently public GCT stock. That said, it’s unclear how long the momentum can last here, although GigaCloud has the advantage for now.
On the date of publication, Samuel O’Brient did not hold (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.