The meme stock phenomenon is resurfacing in the stock market, with companies like Marathon Digital Holdings (NASDAQ:MARA), MicroStrategy (NASDAQ:MSTR), and AMC Entertainment (NYSE:AMC) experiencing significant price swings and trading volume. This volatility is driven by the collective online activity of retail investors rather than traditional financial metrics.
The recent surge in retail investor activity, reminiscent of the meme stock craze in early 2021, highlights a potential paradigm shift in market dynamics. This renewed interest raises questions about investor behavior, market trends, and the enduring influence of social media on stock valuations.
Empowered by online communities and user-friendly trading platforms, individual investors are showcasing their ability to significantly impact stock prices, thereby challenging traditional Wall Street practices.
Understanding the Hype and the Mechanics
To understand the current market environment, it is crucial to define what constitutes a meme stock. In essence, meme stocks are equities that gain viral popularity among retail investors, primarily through social media and online forums. This popularity translates into rapid increases in trading volume and stock price, often irrespective of the company’s underlying financial health or business prospects.
Several key characteristics define these unconventional market darlings. High volatility is the most prominent trait, with meme stocks experiencing dramatic price swings in short periods. These fluctuations are largely disconnected from traditional financial analysis, instead driven by social media sentiment and coordinated buying pressure.
The significant influence of retail investors, who often coordinate their actions through online communities such as Reddit r/wallstreetbets, cannot be overlooked. These groups can rapidly mobilize and generate substantial buying pressure, which can trigger events like short squeezes.
Investing in meme stocks carries considerable risk. Their inherent volatility and detachment from fundamental value make them highly speculative. Investors should be acutely aware of the potential for rapid and significant losses. While the allure of quick gains is undeniable, the underlying risk profile necessitates a cautious and informed approach.
1. AMC: Meme Stock Legacy
AMC Entertainment is one of the original and most prominent meme stocks from the 2021 surge. As the world’s largest movie theater chain, its business was profoundly impacted by the pandemic, yet it garnered immense support from retail investors, affectionately known as "Apes."
This dedicated investor base continues to play a significant role in AMC’s stock dynamics, maintaining its meme stock identity. Recent trading data for AMC on February 27, 2025, shows a closing price of $3.22, a modest 1.26% decrease, with a volume of 8.81 million shares, somewhat below its average.
However, AMC’s 52-week range of $2.38 to $11.88 underlines its volatile nature. AMC’s Q4 2024 earnings report showed positive signs of recovery, with revenue increasing by 18.3% year-over-year to $1.3 billion and adjusted EBITDA more than tripling.
Despite these improvements, AMC still reported a net loss and missed earnings-per-share (EPS) estimates. Investing in AMC is inherently tied to the unpredictable nature of meme stock trading and the company’s ongoing recovery in the movie theater industry. The strength of box office performance and continued retail investor support remain critical factors for AMC’s future.
2. Mara Holdings: Bitcoin’s Volatile Ally
Mara Holdings is an example of the meme stock dynamic within the cryptocurrency sector. As a Bitcoin mining company, MARA’s stock price strongly correlates with the fluctuating value of Bitcoin. This inherent volatility, combined with heightened social media attention, firmly places MARA in the meme stock category.
Recent market data underscores this point. On February 27, 2025, MARA’s stock closed at $13.13, a notable 5.46% increase on the day. This was accompanied by an exceptionally high trading volume of 90.24 million shares, significantly exceeding its average volume. However, this single-day surge is set against a backdrop of considerable volatility, evidenced by its 52-week range of $12.05 to $34.09.
Mara Holdings recently reported its Q4 2024 earnings, revealing record revenue of $214.4 million and a net income of $528.3 million, both figures exceeding analyst expectations. Despite a consensus Hold rating from analysts, there is a wide range in price targets, from a low of $21 to a high of $34, with an average target of $25.67.
Post-earnings, some analysts have reiterated Buy ratings and increased their price targets, suggesting a potentially improving outlook. Investing in MARA requires careful consideration of its potential as a Bitcoin proxy and the amplified volatility associated with its meme stock status.
3. MicroStrategy: A Meme Stock Hybrid
MicroStrategy, now known as Strategy, presents a unique case within the meme stock sector. While fundamentally an enterprise analytics software company, Strategy has strategically positioned itself as a primary corporate holder of Bitcoin. This singular focus on Bitcoin has transformed MSTR into a de facto Bitcoin proxy investment within the stock market, amplifying its meme stock characteristics.
Similar to MARA, MSTR’s stock price is linked to Bitcoin’s performance, resulting in significant volatility. On February 27, 2025, MSTR closed at $240.05, marking a substantial 8.82% decline, coinciding with a downturn in Bitcoin prices. Its 52-week range of $91.55 to $543.00 vividly illustrates the extreme price fluctuations investors can expect. Strategy’s Q4 2024 earnings revealed a net loss of 670.8 million, or 3.03 per share, missing analyst estimates.
Despite the earnings miss, analyst consensus remains a Buy, with a high average price target of $536.90, suggesting a considerable upside potential from current levels. However, recent analyst actions indicate some price target reductions, reflecting concerns about Bitcoin’s inherent volatility.
Investing in Strategy is a leveraged bet on Bitcoin, amplified by meme stock dynamics. The company’s future performance is heavily dependent on Bitcoin’s price trajectory and sustained retail investor interest.
Retail Investors Redefining the Market
The stock market continues to evolve as retail investors gain greater influence, which is evident in the resurgence of meme stocks. Companies like Mara Holdings, MicroStrategy, and AMC Entertainment represent this trend and highlight how social media and online communities can mobilize retail investment and affect stock prices, often defying traditional market logic.
Meme stocks offer a chance for speculative gains, but they also carry significant risk and require careful consideration and risk management. The persistence of meme stocks signifies a fundamental change in market dynamics, emphasizing the need for all investors to adapt to the evolving terrain shaped by retail traders.
The meme stock phenomenon is far from over, and its ongoing influence will undoubtedly shape the future of market participation and investment approaches.