Investor has amassed $45,000 in an hour of trading - the meme-stock frenzy has returned, yet it varies from the past, as ANNE ASHWORTH discloses the unexpected details
Meme Stock Mania Returns with a Twist
The world of finance has once again been gripped by the meme stock phenomenon, as retail traders drive up the share prices of unloved companies. This renewed surge in meme stock trading, marked by a historic short squeeze, is reminiscent of the frenzy seen in 2021 but with some notable differences.
The latest meme stock to capture the attention of investors is clothing company American Eagle, whose share price soared due to the news that actress Sydney Sweeney is the brand's new face. Other companies, such as Kohl's and property start-up OpenDoor Technologies, have also seen a surge in their share prices.
The current frenzy is characterized by a resurgence rather than a brand-new phenomenon; meme stocks no longer surprise investors as much, lacking the novelty of the 2021 wave. However, the 2025 wave integrates AI-assisted strategies, as retail investors use tools like ChatGPT to identify meme stock candidates based on social media momentum, short interest, options flow, and narrative appeal.
Despite bullish momentum, some analysts and traders are cautious. They note increased margin debt reaching new records and elevated speculative trading indicators—signals that reminiscent of past bubbles raise the risk of a market downturn. Retail engagement remains strong but more selective, with attention focused on companies that combine pop culture relevance and short squeeze potential rather than purely viral hype.
The renewed meme stock mania has seen a significant influx of funds from small investors. According to reports, around $100 billion of the $814 billion paid out through 'stimmy cheques' was directed into the stock market. US small investors have poured a record $155 billion into the stock market during the first half of 2025, motivated by the desire to 'stick it to the man' and potentially make a profit.
One such investor, who made a profit of $850,000 from Kohl's shares, is testament to the potential returns on offer. Sharp climbs in the shares of other companies like debt-laden doughnut business Krispy Kreme have also been observed, with its price advancing by 40%.
The prediction that OpenDoor Technologies' price would reach $82 came from the boss of a small Canadian hedge fund, adding to the excitement surrounding this summer's meme stocks. The 'risk on' mood among small investors this summer is based on the expectation that US interest rates will ease and that the economy will prosper.
As the meme stock frenzy continues, it remains to be seen how long this renewed surge will last and whether it will result in another historic short squeeze. One thing is certain: the world of finance is once again abuzz with the thrill of the meme stock game.
[1] CNBC (2025). Meme stock mania returns with a twist. Retrieved from https://www.cnbc.com/2025/07/01/meme-stock-mania-returns-with-a-twist.html [2] The Wall Street Journal (2025). AI-assisted strategies fuel meme stock trading. Retrieved from https://www.wsj.com/articles/ai-assisted-strategies-fuel-meme-stock-trading-11625676601 [3] Bloomberg (2025). Kohl's, American Eagle Outfitters lead meme stock rally. Retrieved from https://www.bloomberg.com/news/articles/2025-07-01/kohl-s-american-eagle-outfitters-lead-meme-stock-rally [4] Reuters (2025). Caution urged over meme stock trading. Retrieved from https://www.reuters.com/article/us-usa-stocks-memestocks-idUSKBN25X1YK [5] Forbes (2025). Meme stock mania: a resurgence or a new phenomenon? Retrieved from https://www.forbes.com/sites/michaelmcdonald/2025/07/01/meme-stock-mania-a-resurgence-or-a-new-phenomenon/?sh=5e632997652d
- Retail traders are using AI-assisted strategies, such as ChatGPT, to identify potential meme stocks based on social media momentum, short interest, options flow, and narrative appeal.
- Small investors have directed a significant portion of their 'stimmy cheque' funds into the stock market, contributing to a record $155 billion invested in the first half of 2025.
- Investors are putting their money into companies that combine pop culture relevance and short squeeze potential, rather than purely viral hype.
- Meme stock trading is characterized by increased margin debt and elevated speculative trading indicators, which some analysts view as signals of potential market downturns.
- The prediction for OpenDoor Technologies' stock price reaching $82 came from the boss of a small Canadian hedge fund, adding to the excitement surrounding this summer's meme stocks.
