AMC Rises As GameStop Falls: Are Meme Stocks A Buy Or Sell Now?

The stock market is once again abuzz with the resurgence of meme stocks, as gamestop (GME) and amc entertainment (AMC) experience dramatic price swings. While GameStop's stock has surged by 179% over the past two sessions, amc has seen a more modest rise of 135% since Friday. This divergence in performance raises the question: are meme stocks a buy or sell now?



The recent surge in GameStop's stock can be attributed to the return of Keith Gill, known as "Roaring Kitty," to social media. Gill's posts and videos have reignited interest in GameStop, mobilizing retail investors and driving up the stock price. In contrast, AMC's stock has not seen the same level of social media buzz, which may explain its relatively lower performance.

However, it's important to note that the current market dynamics and investor sentiment towards meme stocks show some similarities to the 2021 frenzy, but there are also notable differences. In 2021, meme stocks like GameStop and AMC experienced unprecedented surges in price, driven by retail investors who coordinated their buying efforts through online communities like Reddit's WallStreetBets. For instance, GameStop's share price skyrocketed from around $17 to a jaw-dropping $483 within weeks, marking an increase of over 2800% (CNBC, 2021). This surge was fueled by the belief that these stocks were undervalued and heavily shorted by institutional investors, leading to a "short squeeze" where short sellers were forced to buy back shares at higher prices.

In the current market, there is a renewed interest in meme stocks, with GameStop and AMC once again seeing significant price increases. For example, GameStop's stock price has gained 179% over the past two sessions, though it is still well below its record of more than $85 in January 2021 (TradingView). This resurgence is partly due to the return of influential figures like Keith Gill, known as "Roaring Kitty," who posted to X several times Sunday night through Tuesday afternoon after an extended hiatus, sharing a series of videos featuring quotes from famous movie and TV scenes nodding to his retreat from public life and recent return (Investopedia, 2025).

However, there are key differences between the current dynamics and the 2021 frenzy. One significant difference is the level of retail investor participation. Vanda Securities reported that the inflows representing "just a fraction" of the sort of daily cash inflows that GameStop and AMC saw in early 2021 (Vanda Securities, 2025). Additionally, hedge funds have learned from the 2021 experience and are likely better prepared for short squeezes today (Vanda Securities, 2025).

Lessons learned from the 2021 period include the power of social media and online communities in driving market movements. The coordinated buying efforts of retail investors can create significant demand for stocks, leading to dramatic price increases. However, these gains are often short-lived, and prices can plummet just as quickly. For example, GameStop's share price dropped back to around $50 by mid-February 2021, and AMC followed suit with a significant decline (CNBC, 2021).

Another lesson is the importance of understanding the fundamentals of a company before investing. Meme stocks are often driven by hype and speculation rather than the company's actual performance or financial health. For instance, AMC Entertainment was struggling with debt even as its share price surged due to social media hype (Bloomberg, 2021).

In conclusion, while the current market dynamics and investor sentiment towards meme stocks show some similarities to the 2021 frenzy, there are also notable differences in the level of retail investor participation and the preparedness of institutional investors. The lessons learned from the 2021 period highlight the power of social media in driving market movements and the importance of understanding the fundamentals of a company before investing. As for whether meme stocks are a buy or sell now, it ultimately depends on an investor's risk tolerance and investment goals. Those who are willing to take on the high volatility and uncertainty of meme stocks may see opportunities for significant gains, while those who prefer a more stable investment may want to steer clear.