TLDR
- A new meme stock rally is underway in summer 2025, featuring Opendoor, Kohl’s, Krispy Kreme, and GoPro replacing GameStop and AMC as market favorites
- Opendoor stock surged over 300% in the past month, while Krispy Kreme and GoPro saw 90% and 70% premarket gains respectively before pulling back
- The rally is driven by retail investors feeling “invulnerable” after markets recovered from April’s Trump tariff shock and hit new record highs
- Short squeeze activity is prominent, with companies like Kohl’s having 49% of shares sold short and Krispy Kreme at 28% short interest
- Options trading shows 68% concentration in calls and 25% of trading volume in stocks under $5, matching patterns from the 2021 meme stock craze
The meme stock phenomenon has returned to Wall Street in summer 2025. Retail investors are once again piling into speculative trades, creating a fresh roster of market darlings that echo the GameStop mania of 2021.
Companies like Opendoor, Kohl’s, Krispy Kreme, and GoPro have emerged as the new meme stock favorites. These stocks are experiencing wild price swings with little fundamental backing to explain the dramatic moves.
Opendoor stock has surged more than 300% over the past month. The real estate technology company saw a 140% increase in retail trading over two weeks compared to the previous month, according to VandaTrack data.
Krispy Kreme and GoPro joined the rally on Wednesday with premarket gains of more than 90% and 70% respectively. Both stocks later swung to losses before the market opened Thursday, following the volatile pattern typical of meme stock trading.
The current market environment appears ideal for risk-taking behavior. Interactive Brokers chief strategist Steve Sosnick suggests that investors are feeling “invulnerable” because their recent trades have been successful.
The stock market has roared back after a historic drop in April following President Trump’s tariff announcement. The S&P 500 is now routinely hitting record highs, including this week.
Short Squeeze Activity Drives Gains
Short squeeze dynamics are playing a key role in the current rally. Many of the trending stocks have high percentages of their shares sold short by institutional investors betting against them.
Kohl’s leads with a 49% short float, meaning nearly half of its outstanding shares are borrowed for short positions. Krispy Kreme sits at 28% short interest, while Opendoor has around 21% of shares sold short.
The Goldman Sachs Most Shorted Rolling Index has gained 13% this month compared to just 2% for the Russell 3000. This basket of heavily shorted stocks is up over 60% since April’s market low.
Options trading data reveals the speculative appetite among retail traders. Stocktwits reports that 68% of the options market is now in calls, the highest concentration since 2021’s meme stock peak.
More than 25% of all trading volume this year has occurred in stocks priced under $5 per share. Low-priced stocks were also a hallmark of the 2021 meme stock rally.
Broader Market Froth
The meme stock surge reflects broader speculative activity across multiple asset classes. Cryptocurrencies are rallying alongside equity markets, with Bitcoin recently hitting a record high of $123,153.
Crypto-related stocks have also soared. Coinbase Global and Strategy (formerly MicroStrategy) have posted strong gains as crypto enthusiasm returns to markets.
The current market environment shows signs of froth, though analysts say it hasn’t reached extreme levels. Various options market gauges point to increased risk-taking but remain below peaks seen during past speculative periods.
Retail investors appear more confident than institutional players. BCA Research notes that while retail sentiment is overextended, institutional investor positioning remains more cautious.
Despite the S&P 500 making new highs, equity positioning remains below February levels as professional investors stay underweight stocks according to Deutsche Bank estimates.
The S&P 500 trades at 22.5 times expected earnings, its highest level this year. This valuation has occurred only 7% of the time over the past 40 years and sits well above the long-term average of 15.8.
Market strategists warn that elevated valuations could make stocks vulnerable to disappointing news. However, positioning data suggests the rally may continue in the near term as speculative activity builds momentum.
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