Gamestop(NYSE:GME) orAMC Entertainment(NYSE:AMC)? It’s been a while since the meme stock frenzy of 2021, but, believe it or not, there are still traders out there who are more than inclined to continue holding (or should I say “HODL”ing) their shares of Gamestop and AMC Entertainment, two names that are pretty much synonymous with meme trading and short squeezes at this point.
Though I wouldn’t look to punch a ticket at these levels, I certainly wouldn’t dare initiate a short position. Indeed, if the meme frenzy of 2021 taught us anything, it’s that betting against even a seemingly sure thing is a dangerous proposition that might just lead to uncapped losses. Between going long and going short, I’d much rather go for the former any day of the week.
Key Points
- The meme frenzy may be on pause, but many are hanging onto their GME and AMC shares, perhaps for the fundamentals or maybe as a ticket to another potential frenzy.
- GME and AMC are meme stocks that have gone quiet in recent quarters. But is either one worth buying for the fundamentals?
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So, could either GME or AMC shares spike again?
Of course, betting on shares of GME or AMC at these levels probably won’t get you the kind of jolt you’re looking for unless, of course, you think Roaring Kitty will have more to roar about these beloved but challenged businesses.
Indeed, owning a stock just because you think someone else will scoop it up is a risky move. But if you’re a frequent poster on the WallStreetBets subreddit and you’re looking for karma, nibbling on a few shares might offer some thrill. Though I would be very surprised if substantial profits were in the cards for the trader with the so-called “diamond hands.”
I have absolutely zero idea. Of course, in theory, it is possible for either name to power higher if a meme frenzy were to restart. Indeed, in today’s red-hot market, the appetite for speculation seems to be in a good spot.
Gamestop
In any case, GME stock exploded higher, seemingly from out of nowhere, back in the spring of 2024. From trough to peak, shares of GME spiked nearly 400% in just weeks. And, as always, the spike led to a painful drawdown.
Though shares are only down about 50% from the May 2026 peak. Of course, the short-lived rally was nowhere near as explosive as the great short squeeze of 2021. Personally, I think a 2021-esque surge is out of the cards. The big question for investors is whether a mini-spike like the one enjoyed last year will be on the table. There is a chance, but, of course, nobody knows when the next bounce will happen.
If you’re looking to buy because you simply like the business, perhaps there are better alternatives out there since, on a fundamental basis, Gamestop does not look cheap at more than 30 times trailing price-to-earnings (P/E). Not in the slightest. Of course, the special dividend is a nice reward for those who’ve committed to stand by their shares, but pending a transformative turnaround, I’d reset my expectations with the name as the price action still seems divorced from the fundamentals.
AMC stock
AMC Entertainment is another beloved business that’s run into trouble in recent years. Shares now go for less than $3 per share, and while the $1.5 billion theatre play may be reportedly collaborating with Taylor Swift on a new event, I’m not sure if anything other than a red-hot box office boom or return of Roaring Kitty could spark a swift reversal in the stock.
Like Gamestop, it’s tough to justify buying based on the fundamentals. As the firm chips away at its debt while narrowing its losses, perhaps there might be a bull case emerging for the name in a few quarters.
Either way, the cigar-butt of a stock stands out as a high-risk buy, but if forced to pick between GME and AMC, I’d have to go with the movie theatre firm. Sure, both firms offer ample nostalgia, but only AMC, I think, implies value at these levels while shares are going for around 0.26 times price-to-sales (P/S). Sure, AMC is challenged, but the price of admission is pretty much at the floor.
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