Everyone loves a good meme, but does the same thing apply to meme stocks, and are they similar to meme-coins? Meme stocks gained popularity years ago, when the famous GameStop fiasco kicked off, and forced Robinhood to limit withdrawals and suspend trading. Do meme stocks still have a place in the world, and what exactly defines a meme stock anyway? Below, we break down how to understand meme stocks and what stocks might be cooking for 2025.
What is a meme stock?
A meme stock is a company’s publicly traded equity that gains sudden popularity among retail investors through social media platforms such as Reddit (notably the WallStreetBets subreddit), X (formerly Twitter), and TikTok. This popularity often results in dramatic price swings, fueled not by earnings reports or macroeconomic shifts, but by viral content, hype, and herd behavior.
What are the main features of a meme stock?
Not all meme stocks are the same, but generally speaking, below is what fits the profile of a meme stock.
High retail investor interest
Many of the most volatile stocks today are driven by retail traders using apps like Robinhood and following buzz on Reddit or X. These investors often act fast and in large numbers, which can cause sharp and sudden price moves. It’s not uncommon for a stock to spike overnight simply because it caught fire on a subreddit.
Elevated volatility
These stocks tend to swing hard in both directions, sometimes moving 10 to 20 percent within a single trading day. For active traders, it can be thrilling, but for long-term investors, it’s a risky environment that demands caution. One earnings call or tweet can flip sentiment instantly.
Short squeeze potential
Stocks with high short interest can become explosive when momentum shifts, forcing short sellers to buy shares back quickly and push prices even higher. This happened with GameStop, where retail investors triggered one of the most well-known short squeezes in modern history. It’s the kind of event that turns market watchers into headlines.
Disconnect from fundamentals
In many cases, these stocks don’t reflect traditional financial metrics like earnings or revenue growth. Prices are driven more by emotion and momentum than by what’s actually happening inside the company. It’s like investing based on vibes rather than balance sheets.
Narrative-driven
These stocks thrive on stories, whether it’s a turnaround play, an underdog fighting off institutional pressure, or a loyalty-driven movement. Traders buy into belief systems, not just balance sheets. Think of it as investing with a mission statement rather than a spreadsheet.
How do meme stocks differ from normal stocks?
Traditional investors look at metrics like P/E ratios, revenue growth, and EBITDA margins, but not so for meme stocks. Meme stocks are almost entirely fueled by community enthusiasm and virality. Below is a breakdown of traditional stocks vs. meme stocks.
| Factor | Traditional Stocks | Meme Stocks |
|---|---|---|
| Valuation approach | Primarily driven by fundamentals, including earnings, revenue, P/E ratios, and future cash flow models | Heavily influenced by social media sentiment, trending narratives, and viral community support |
| Volatility | Typically moderate, tied to earnings cycles and macroeconomic news | Often extreme; subject to daily or hourly swings based on online sentiment or influencer posts |
| Investor base | Mix of institutional investors, analysts, and long-term retail holders | Dominated by retail investors, often younger traders using platforms like Robinhood and Reddit |
| Catalysts | Earnings releases, M&A activity, dividend announcements, and macroeconomic indicators | Trending hashtags, Reddit threads, celebrity endorsements, short squeeze alerts |
| Holding period | Often long-term (months to years) with a buy-and-hold philosophy | Frequently short-term (hours to weeks), focused on momentum trading |
| Risk profile | Generally lower risk with more predictable price movements and regulatory transparency | High risk; susceptible to manipulation, FOMO, and sudden crashes |
Volatility comparison: meme stocks vs. traditional equities
Meme stocks like GameStop (GME) and AMC Entertainment (AMC) have exhibited significantly higher volatility compared to traditional blue-chip stocks such as Apple Inc. (AAPL). To illustrate this, let’s examine the stock price movements of these companies from January 2020 to March 2025.
Analysis:
- GameStop (GME): In January 2020, GME traded around $5.00. By June 2021, during the peak of the meme stock frenzy, it soared to approximately $325.00—a staggering increase of 6,400%. This surge turned out to be short-lived, and by December 2022, the stock had declined to about $25.00. As of March 2025, GME trades at $22.54.
- AMC Entertainment (AMC): AMC’s stock followed a similar trajectory. Starting at $7.50 in January 2020, it climbed to around $62.55 in June 2021, marking an increase of over 730%. By December 2022, the price had fallen to $4.00, and as of March 2025, it stands at $2.90.
- Apple Inc. (AAPL): In contrast, AAPL exhibited more stable growth. From $75.00 in January 2020, it increased to $130.00 by June 2021. By December 2022, it reached $150.00, and as of March 2025, AAPL trades at $219.66.
Investor behavior and portfolio strategy in the meme stock era
The meme stock craze didn’t just put volatile tickers not many people were unfamiliar with on a pedestal; it created its own asset class and investor type. These aren’t your typical 401(k) holders or value-oriented Buffett disciples, these are renegades looking to trade outside of traditional market fundamentals. Meme stock investors are often younger, faster, and more plugged into digital culture than any previous generation of traders.
Why do young people like meme stocks?
Young people love meme stocks and are drawn to meme stocks because they combine community, entertainment, and a shot at financial upside in a way traditional investing never did. After 2020, with trading apps like Robinhood making it easy to buy stocks from a phone, many Millennials and Gen Zers jumped in, often absorbing information from Reddit threads, TikTok explainers, and YouTube breakdowns instead of textbooks. For many, it’s not just about making money, it’s also about pushing back against Wall Street, feeling part of something bigger, and proving that regular people can move markets too.
How does risk tolerance and behavior differ for meme stockholders?
Meme stock investors exhibit remarkably high risk tolerance, often displaying behaviors that would terrify traditional portfolio managers:
All-in trades
Many meme stock investors throw traditional diversification out the window. It’s not uncommon to see someone bet their entire portfolio (sometimes 50–100%)on a single stock they believe will “moon.” While high-risk, it reflects strong conviction and a willingness to chase outsized returns.
Short-term focus
Unlike long-term investors who think in years, meme stock traders often think in hours. Many buy on a Monday morning and sell by Friday based on momentum, news cycles, or social media buzz. It’s fast, emotional, and built on short-term price moves.
Options trading
Plenty of meme stock traders go beyond simply buying shares—they dive into call options. These are contracts that let them control more stock with less capital, magnifying both gains and losses. It’s a common tactic among Reddit users aiming for big wins with small bets.
HODL mentality
Even after big drops, many investors don’t sell the double down, in other words, “hold it
“or HODL it. The “HODL” mindset (hold on for dear life) is part of meme stock culture, where loyalty to the stock and the community often outweighs short-term performance.
Contrasting investor types
| Investor type | Traditional investor | Meme stock investor |
|---|---|---|
| Typical age range | 45–65 | 18–35 |
| Investment style | Buy-and-hold, long-term growth | Momentum-based, short-term gains |
| Primary goal | Wealth preservation and retirement planning | Quick profits, community participation |
| Information sources | Wall Street analysts, financial news, earnings reports | Reddit threads, YouTube channels, TikTok |
| Emotional drivers | Security, legacy building | FOMO, rebellion, entertainment |
The institutional response to meme stocks.
Interestingly, institutions are paying attention, and paying attention with the utmost focus. Hedge funds, quant firms, and market makers now monitor Reddit and sentiment analytics to anticipate surges. Some even allocate small portions of their portfolios to high-risk, high-reward meme plays, a subtle nod to the fact that meme stock investors are not just loud; they’re moving markets.
Top meme stocks to watch in 2025
This year’s meme stock contenders blend old favorites with new viral players. While past performance is not a guarantee of future results (we see you, SEC), these stocks have shown significant traction across social platforms and trading forums.
| Stock | Ticker | Why it’s trending |
|---|---|---|
| GameStop | GME | The original meme stock, boosted by a new e-commerce vision |
| AMC Entertainment | AMC | Still beloved by apes, fueled by NFT ventures and loyalty programs |
| Tupperware Brands | TUP | Turnaround buzz and surprise earnings pop |
| BlackBerry | BB | Catching fire again on AI security hype |
| Trump Media & Technology Group | DJT | Highly volatile, politically polarizing, Reddit favorite |
| SunPower | SPWR | Green energy underdog with meme-worthy momentum |
Is investing in meme stocks worth it?
Meme stocks may offer thrilling highs and a sense of community-driven momentum, but they also come with significant risks. Before jumping in, it’s important to weigh the benefits against the drawbacks, especially in a volatile market environment like 2025.
Pros and Cons to Keep in Mind
Here are some pros and cons to consider:
PROS
- Potential for rapid, outsized returns in short time frames.
- High liquidity and visibility, easy to trade in and out.
- Real-time sentiment tracking via Reddit, Stocktwits, and social media.
- Appeals to younger investors seeking high engagement and community-based trading.
CONS
- Extreme volatility and unpredictable price swings.
- Often disconnected from company fundamentals or long-term value.
- Susceptible to manipulation and hype cycles.
- Not ideal for conservative or long-term investment strategies.
Why are meme stocks still popular in 2025?
Meme stocks were once seen as just a flash in the pan, a trend or fad that was sure to pass or get squashed by regulators. Instead, meme stocks have become an asset class all unto themselves, and in 2025, the meme stock phenomenon continues to echo across trading floors and Discord servers alike. But why did this happen?
Democratization of finance is no longer theoretical
The retail investor revolution sparked in 2020 didn’t end with stimulus checks and lockdown boredom. Today’s retail traders are more sophisticated, more coordinated, and more confident. Meme stocks were the gateway; what followed was a generation of investors unwilling to sit on the sidelines while institutions dictated market direction. Platforms like Robinhood, SoFi, and Public have normalized retail access to markets that once felt gated.
Institutional engagement is growing, not shrinking
Ironically, the very institutions that meme investors once rebelled against have joined the movement. Hedge funds now employ sentiment analysts. Asset managers quietly allocate small “high-volatility buckets” to meme plays. Structured products are being created to ride these waves without full exposure. And yes, ETFs that track social sentiment are now part of the conversation.
Meme stocks are a cultural asset class
In 2025, meme stocks aren’t just financial instruments, they’re cultural artifacts. They embody a generational shift in wealth-building, communication, and rebellion. Just like tech stocks defined the late ’90s and ESG redefined the 2010s, meme stocks are the story of the 2020s: decentralized, emotional, and occasionally and random.
Meme stocks in 2025: Should you get involved?
Just as memes burst onto the scene decades ago to captivate the world’s attention, meme stocks are the latest phenomenon to combine internet culture with something more serious. The most important result from the original meme stock boom is the active involvement of institutional capital. Where institutional capital goes, normal retail investors will follow, and meme stocks could see themselves rise from the fringe into the mainstream.
One thing is certain: if you are a novice trader with a low risk appetite, meme stocks might not be for you. However, if you like to invest with a community, you don’t care about market fundamentals and more market sentiment, and you are comfortable with stomaching loads of risk for a very high upside, meme stocks might be for you.
FAQ
How can I tell if a stock is becoming a meme stock?
Look for a surge in social media chatter across platforms like Reddit (especially r/WallStreetBets), TikTok, and Twitter/X. Other indicators include a sudden increase in trading volume, a spike in short interest, and rapid price movement without any fundamental news to justify it. Monitoring tools like Swaggy Stocks or Stocktwits can help identify early momentum shifts.
