Krispy Kreme and GoPro join meme-stock rally. Who's next?

Shares of doughnut maker Krispy Kreme and action camera manufacturer GoPro have skyrocketed today, July 23, by more than 30% and 80%, respectively, as the meme-stock revival continues. Analysts are warning about the riskiness of such investments, while Barron's has put together a list of other stocks that could join the meme trade in the near future.

Krispy Kreme has soared 34% today after closing up nearly 27% yesterday, while GoPro is up more than 80% following gains of 41%. Call volume on Krispy Kreme hit a record yesterday at more than 100,000 contracts, equivalent to 71 times the average daily volume over the past four years, calculated Bloomberg. GoPro, meanwhile, saw the highest call volume since 2021 with over 56,000 contracts.

Bloomberg writes that Wall Street has been "captivated" in recent days by a resurgence in certain stocks popular on the WallStreetBets page of Reddit. For example, on Monday real estate tech platform Opendoor soared, followed yesterday by the retailer Kohl's, quotes on which more than doubled. 

"Krispy Kreme seems to be the latest addition to the frenzy," Daniela Hathorn, senior market analyst at Capital.com, wrote in a note quoted by Bloomberg. "Like the others, there was no significant news to justify the rally, just sheer retail momentum."

Hathorn adds: "The risks are just as stark as the rewards,” since meme-stock rallies typically lack fundamental drivers and can reverse quickly. "Traders who chase momentum without an exit strategy may be caught in painful drawdowns,"  Barron's quoted the Capital.com analyst as saying.  

There are several other stocks that could join the meme trade, Barron's writes. It found the top 30 stocks in terms of short interest as a percentage of total shares outstanding (ranging from 19% to 58%) before identifying the ones that are widely recognized by the public, either because they are known consumer brands or because they have been in the news recently. For example: telehealth company Hims & Hers Health, as well as quantum computing firms Rigetti Computing and D-Wave Quantum. Even biopharma company Moderna, known as the producer of a COVID-19 vaccine, made the Barron's list, as its relatively low share price could make it as an easy target for retail traders to move.

Barron's also fingered fintech Rocket Companies (30.3% short interest), online furniture retailer Wayfair (22.9%), handmade and vintage item marketplace Etsy (21.7%), EV truck maker Rivian (21.6%), and orthopedic footwear brand Birkenstock (19.8%).

The AI translation of this story was reviewed by a human editor.