[A person holding a Krispy Kreme packaged donut box. Photo Credit to Unsplash]

Krispy Kreme and GoPro stocks have skyrocketed this week as retail traders reignited a meme stock rally, sending both firms’ share prices sharply higher despite little change in their financial or strategic outlooks. 

With gains driven more by short squeeze speculation than business fundamentals, the pattern is fueling comparisons to the frenzied meme trading episodes of 2021.

Krispy Kreme surged nearly 27% on July 22, and continued climbing through Wednesday, while GoPro jumped more than 40% and gained another 45% by the next trading day.

Neither company had released earnings or business updates that could justify such movements, making the rally stand out from typical trading behavior.

The fuel behind the surge appears to be the familiar cocktail of high short interest, algorithmic trading triggers, and the power of collective retail enthusiasm amplified through platforms like Reddit’s r/wallstreetbets, Stocktwits, and X (formerly Twitter). 

Algorithmic triggers refer to automated trading systems that execute large buy or sell orders when specific conditions, like price spikes or volume surges, are met, often accelerating momentum in either direction.

On July 22, mentions of Krispy Kreme on Stocktwits rose over 2,000% in 24 hours, while GoPro topped the “trending” tickers on multiple brokerage dashboards.

GoPro, while not as heavily shorted, had enough bearish positioning to be flagged as a squeeze candidate, triggering algorithmic buying as its price began to climb. (In market terms, bearish refers to expecting a stock to decline, while bullish means expecting it to rise.)

The rush of retail inflows further accelerated the momentum.

However, the fundamentals behind both firms remain largely unchanged. 

Krispy Kreme’s most recent quarterly report, published on May 8, showed flat growth, missed analyst expectations, and the suspension of its dividend. 

GoPro continues to face stagnant profitability, with a product lineup that’s struggled to compete against modern smartphones and action cameras from rivals like Insta360.

Despite weak financials, investors poured in, fueled by the thrill of potential short squeezes and a broader uptick in speculative appetite. 

The S&P 500 recently notched new highs, crypto markets rebounded sharply in Q2, and cooling inflation data have stirred hopes that rate cuts could arrive by year-end.

This macro backdrop appears to have emboldened risk-taking.

The retail-driven rally is also lifting other high-short-interest stocks. 

Shares of Beyond Meat, 1-800-Flowers, and Kohl’s have all seen moderate to double-digit gains over the past 72 hours, despite the absence of major business developments. 

This signals a broader wave of speculative energy targeting underperforming or shorted companies.

Yet history suggests that rallies fueled by retail momentum alone are difficult to sustain. 

Once the initial hype fades or retail traders move on to the next trending ticker, demand often dries up quickly, leaving stocks vulnerable to sharp reversals.

Many investors remember the rapid reversals that followed similar episodes involving GameStop, AMC, and Bed Bath & Beyond, where meteoric rises gave way to steep losses once the hype waned. 

Analysts caution that unless underlying performance improves, stocks like Krispy Kreme and GoPro may not hold their elevated valuations for long.

As of now, neither company has signaled any shift in corporate strategy or product innovation that could support a lasting growth narrative. 

Neither Krispy Kreme nor GoPro has issued any official statement regarding the recent rise in their stock prices.

For now, the current rally seems to reflect more about investor behavior than company value.

A sentiment-fueled reminder that in today’s markets, price can sometimes outrun reality.