Just when you thought S&P 500 investors finally came to their senses, this happens: Meme stocks are up an average 133% this year.
X The meme stock rally is as definitive as it is powerful.Ten stocks in the Roundhill Meme Stock ETF ( MEME ), including Carvana ( CVNA ), Coinbase ( COIN ) and Tesla ( TSLA ), have doubled or more this year, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith .That makes the S&P 500’s 19% rise this year look puny.And the meme stock averages obscure some of the most head-turning gains, such as Carvana’s 876% rise this year.
The second-wind rally in stocks popular on online discussion groups shows how speculation is back following 2022’s massive crash in most of these same stocks.
“The recent market strength is being driven by FOMO (Fear of Missing Out) by both retail and institutional investors,” said James Demmert, chief investment officer, Main Street Research.
Meme Stocks On Fire It’s not just the top-performing meme stocks that are racing higher either.The Roundhill ETF, which equal weights the 25 stocks popular with the Reddit crowd, is up nearly 61% this year.
That even tops the red-hot 41% jump this year by Invesco QQQ Trust ( QQQ ), which gained so much this year that a special rebalancing was done to cap the leaders .
Some of the meme stock gains are perplexing investors who focus on profit growth and more stable S&P 500-like stocks.Carvana, an online seller of cars, has seen its shares shoot up more than 80% in the past 12 months.Who cares the company is expected to lose money until 2026?
“Has everybody lost their minds?” wrote Herb Greenberg in Empire Financial Daily.
“It’s great that Carvana pulled off such a stock-goosing magic trick, but lost in all of the mania of the market is that the viability of the company’s business remains a question mark …and until proved otherwise, investing in Carvana continues to be a dash for trash.” Keep in mind the stock tanked 98% in 2022.
But it’s not simply beginning investors capitalizing on the meme rush.Cathie Wood’s ARK Innovation ETF ( ARKK ) plunks more than 8.6% of its portfolio in Coinbase shares.And that’s been a boon this year with shares of the digital wallet firm rising 182%.The company isn’t expected to make a dime until 2027.
Some Old Speculative Plays Perk Up Too It would be simplistic, though, to say meme stocks are the only points of speculation to take off this year.
ARK Innovation itself is up more than 50%, making it the top-performing U.S.diversified ETF .
And remember ProShares Bitcoin Strategy ETF ( BITO )? It’s up roughly 49% this year as the prices of crypto currencies shake off 2022’s drop.The Bitcoin ETF fell 64% in 2022.
And don’t overlook Tesla, perhaps the Blue Chip of the meme stocks.
Shares of Tesla are up 118% this year, helping to undo the 65% implosion in 2022.Investors don’t seem to think the influx of hundreds of new electric vehicle models , many priced below Tesla, will make any difference.
Maybe investors are right: This time is different.
But if speculation runs out again, some investors results might be another big reminder of risk.
Biggest Meme Stock Gainers Based on stocks in Roundhill Meme ETF
Company Ticker 2022 YTD % ch.Sector Carvana ( CVNA ) -98.0% 875.7% Consumer Discretionary Riot Platforms ( RIOT ) -84.8 413.7 Information Technology Marathon Digital ( MARA ) -89.6 377.9 Information Technology Upstart Holdings ( UPST ) -91.3 307.5 Financials Coinbase Global ( COIN ) -86.0 179.5 Financials DraftKings ( DKNG ) -58.5 168.7 Consumer Discretionary Palantir Technologies ( PLTR ) -64.7 154.3 Information Technology Carnival ( CCL ) -59.9 121.2 Consumer Discretionary Tesla ( TSLA ) -65.0 118.5 Consumer Discretionary SoFi Technologies ( SOFI ) -70.8 104.9 Financials Sources: S&P Global Market Intelligence, IBD Follow Matt Krantz on Twitter @ mattkrantz YOU MAY ALSO LIKE:
Two Of The World’s Richest Men Loaded Up On The Exact Same Stock
Six Stocks Turn $10,000 Into $69,878 In Six Months
Learn How To Time The Market With IBD’s ETF Market Strategy
Find Today’s Best Growth Stocks To Watch With IBD 50
Join IBD Live Each Morning For Stock Tips Before The Open
Related news Dow Jones Futures Rise As Dow Rides Win Streak; Fed Meeting, Tech Titans On Tap 7/25/2023 The Dow win streak is now 11 sessions.Tesla rebounded above a key level.The Fed meeting and tech titans…
7/25/2023 The Dow win streak is now 11 sessions.Tesla rebounded…
Top China Stocks: These Two Are In Buy Areas GM Earnings Top; Auto Giant Plans To Ramp Up EV Output, Cut Costs Stock Market Today: Stock Market News And Analysis These Are The 6 Best EV Stocks To Buy And Watch Now Stock Market Holds Onto Gains In Start To Busy Week; AI Robotics Stock Short-Circuits How Nasdaq 100’s Special Rebalance Punishes The ‘Magnificent 7’ Dow Jones Rises As Fed Meeting, Huge Earnings Loom; Tesla Stock Shrugs Off Downgrade Tesla Stock Pulls Back And This Market Wizard Is Worried Today’s Spotlight New “Investing With IBD” Episode This week, guest Tom Sosnoff shares how he trades earnings movers with options.Trade Like a Market Shark Start swimming through killer trade ideas—get 4 weeks of MarketSmith for only $24.95! Start Trading Stocks in 3 Days Learn how to trade stocks like a pro with just 3 email lessons! Sign up for free today.
More News How Nasdaq 100’s Special Rebalance Punishes The ‘Magnificent 7’ EV tax credits are enticing car buyers, who can choose from a growing number of models.(© Dave Cutler)
EV Tax Credits: All The 2023, 2024 Cars And Trucks That Get $7,500 A Window into the Microsoft Trade.Is AI the Answer? Promoted Content By Direxion
TRADING CENTER INVESTING RESOURCES Take a Trial Today Get instant access to exclusive stock lists, expert market analysis and powerful tools with 2 months of IBD Digital for only $20!
IBD Videos Get market updates, educational videos, webinars, and stock analysis.
Get Started Learn how you can make more money with IBD’s investing tools, top-performing stock lists, and educational content..
