The term “meme investing” shot into public consciousness in January 2021 when high volumes of retail investors orchestrated a short squeeze on GameStop (NYSE:GME) stock to cause a sharp rally of over 1,500% in a matter of days.
Forming the backdrop to the exceptional circumstances of GameStop was a cryptocurrency rally that ultimately saw Bitcoin (BTC-USD) reach an all-time high value of $69,000. That crypto rally played a key role in igniting the interest of individuals keen to embrace the world of investing without having to conduct deep market research or wait longer for a substantial return on investment (ROI).
Although we recently saw Roundhill’s MEME ETF shut down due to flagging investor interest, it’s important to acknowledge that recent economic headwinds have forced investors to look away from riskier stocks. Despite this, there have been many cases of meme stock opportunities.
It’s also important to note that the r/WallStreetBets Reddit page still has some 15 million members and ranks in the top 1% of most active groups on the platform. This, coupled with the arrival of a Bitcoin ETF and a long-awaited Bitcoin halving event on the way, suggests we may soon see market conditions that closely replicate the GameStop and AMC (NYSE:AMC) rallies of 2021.
Of course, the biggest performers in future meme stock rallies will be the stocks that inspire investor enthusiasm alongside institutional derision without already being recognized as fully-fledged meme stocks. With this in mind, I believe the three stocks below have the potential to see GameStop’s levels of gains in the right market conditions.
Virgin Galactic (SPCE)
The beauty of Virgin Galactic (NYSE:SPCE) is that it displays excellent meme stock credentials. Having become the first special purpose acquisition company (SPAC) deal set up by Chamath Palihapitiya, a former executive at Meta Platforms (NASDAQ:META), SPCE became the first space tourism stock to go public.
In addition to this, the concept of space tourism is more likely to resonate with retail investors as an exciting uncharted industry that’s unfamiliar territory for institutions with intentions to short the stock.
Furthermore, the stock already experienced a boost from meme investors as the firm began flying its first commercial passengers into space in June 2023. With commercial space tourism seats costing passengers $450,000, Virgin Galactic’s unique industry position could see more meme investors picking up the stock as packages finally begin to bring in much sought-after revenue for the company.
A newer member of the meme stock circuit is Fisker (NYSE:FSR), an electric vehicle (EV) stock that a passionate community of sustainability-focused retail investors could buoy.
Fisker, according to Tom Bruni, social investment platform Stocktwits’ lead writer, “has arguably become a ‘meme stock.’ …However, like other ‘meme stocks,’ the company has since been unable to produce the business results it so confidently forecasted.”
While Fisker has struggled for performance in recent years, the automotive firm recently announced an agreement with an institutional investor set to free up higher volumes of cash to cover operating costs. The news puts the stock on track to make its first gain in 2024 and could make its sub-$500 million market capitalization attractive for meme investors.
“I am pleased that we were able to reach an agreement with one of our investors that will provide increased flexibility and better position us to execute on potential strategic business deals,” said the company’s chief executive, Henrik Fisker.
Spirit Airlines (SAVE)
Spirit Airlines (NYSE:SAVE) has become the world’s newest meme stock following a failed $3.8 billion acquisition launched by JetBlue (NASDAQ:JBLU). In a market rollercoaster set to rumble on, the U.S. Department of Justice (DOJ) blocked the merger, citing antitrust concerns.
Although the bungled acquisition attempt saw Spirit shed around 50% of its market value, the stock found a vocal supporter in Barstool Sports founder and owner Dave Portnoy.
Calling Spirit Airlines “the people’s airline,” Portnoy has helped to generate significant positive sentiment towards the stock, citing how the company has often avoided the PR disasters of other budget airlines in recent years.
The rally saw Spirit double in value at its peak and if this positive market sentiment captures the imagination of retail investors, we could see Spirit’s relatively modest market capitalization of under $1 billion offer attractive levels of potential for meme investors seeking to hold the troubled stock.
Whether external factors like a prospective cryptocurrency bull market provide more retail investors with the confidence and liquidity to once again embrace meme stocks like 2021 remains to be seen. However, it’s certainly worth tracking these strong meme prospects that hold plenty of potential to pop in the year ahead.
On the date of publication, Dmytro Spilka did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.