Revival of Meme-Stock Frenzy Points to a Frothy US Stock Market

This week’s meme-stock pop is a sign that US equity markets are frothy and potentially peaking, according to the latest Bloomberg Markets Live Pulse survey.

GameStop Corp. and AMC Entertainment Holdings Inc., two darlings of the meme-stock mania of 2021, saw their share prices soar — then plunge — after Keith Gill, the retail-trading icon who goes by the moniker “Roaring Kitty,” put up a cryptic post on the social-media platform X. GameStop surged nearly 180% on Monday and Tuesday, while AMC leaped 135%, before both sold off on Wednesday and Thursday to cut those gains by more than half.

While the wild price action rekindled memories of the meme-stock frenzy from just a few years ago, many of the 230 respondents in the MLIV Pulse poll were skeptical that it was an encouraging sign for the overall stock market. With the S&P 500 and Nasdaq 100 indexes setting new all-time highs this week and the Dow Jones Industrial Average eclipsing 40,000 for the first time ever, more than 40% of those polled see the trading in GameStop and AMC as a sign of undue euphoria and a potential reason to sell.


“We wouldn’t have seen a surge in meme stocks like this unless equities were already somewhat exuberant,” Steve Sosnick, chief strategist at Interactive Brokers LLC, said over the phone.

The MLIV Pulse survey found that 43% of participants view the surge in meme stocks as a contrarian warning for the market going forward. Roughly a quarter view it as a positive sign for share prices. Meanwhile, 66% of respondents say it poses no real threat to the overall equity market.