There’s a lot of significance behind the timely return of investing influencer Keith Gill, who is best known by his YouTube and X persona, “Roaring Kitty.” Gill was a driving force behind the 2021 meme stock frenzy that saw GameStop’s stock briefly soar 4,000% in a now infamous short squeeze. Now, there are several meme stocks ready to go to the moon.
The events of January 2021 and the unlikely rise of GameStop inspired a new wave of meme investing off the back of a strong post-pandemic recovery on Wall Street that saw more retail investors coordinate to inflate the value of their favorite stocks based solely on sentiment.
Following a hiatus of almost three years, Roaring Kitty’s X account exploded with a flurry of activity in the form of cryptic meme-focused multimedia posts. With followers assuming Gill was focused on a GameStop revival, GME embarked on a Q2 2024 peak of around 306% before a harsh correction. The stock finished the quarter with growth of more than 105%.
But what’s so significant about Gill’s return in 2024? Crucially, markets have embarked on a new wave of optimism that hasn’t been seen since the time of the last meme stock rally in 2021. With expectations of Federal Reserve rate cuts on the horizon, the S&P 500 has recovered its 2022 losses and sits in uncharted territory at 5,572 at the time of writing.
This makes conditions ideal for retail interest and the return of meme investing, and these three meme stocks could be the biggest beneficiaries should the Roaring Kitty rally 3.0 take place in the second half of 2024:
GameStop (GME)
The reality of the matter is that no meme stock frenzy would be complete without GameStop (NYSE:GME), and a prospective Roaring Kitty rally 3.0 is highly unlikely to see GME remain static in the face of renewed retail interest.
GameStop is by far the most popular meme stock on Wall Street today. From the beginning of Q2 2024 to the stock’s peak during the quarter, GME had rallied 306.59%.
At this stage, it’s important to highlight that there are problems related to the stock. This is natural in meme investing because struggling stocks make for the best short-squeeze opportunities.
In its Q1 2024 earnings, GameStop reported net sales were down to $882 million, a substantial decline from the $1.237 billion reported in the first quarter of the year prior and an illustration of the challenges the company has faced in the wake of declining consumer confidence.
The stock’s biggest cheerleader, Gill, had also faced a lawsuit accusing the influencer of defrauding investors through a ‘pump-and-dump’ scheme in connection with his promotion of GameStop. However, the allegation has since been withdrawn.
Despite its hardships, GameStop remains the king of meme stocks and a draw for retail investors. The stock’s meme credentials are likely to see GameStop remain front and center during any future meme stock revival.
Palantir (PLTR)
On the face of it, software firm Palantir (NYSE:PLTR) doesn’t appear as an archetypical meme stock. The company is new, innovative, and operates on strong fundamentals. Meme stocks, however, have often taken the form of nostalgia-driven companies that have fallen on hard times. This makes them a target for a short squeeze.
Palantir bucks this trend. The stock’s Q1 2024 earnings were so good. In fact, the company reported a revenue increase of 21% year over year to $634 million.
For Q1 2024, Palantir reported revenue of $634 million. This marked a 21% increase year-over-year and surpassing the analyst estimates of $625.43 million. This growth is attributed to a robust performance in both the commercial and government sectors.
The stock has also consistently outperformed the wider market. It has grown by 52.77% in the first two quarters of 2024.
Palantir CEO Alex Karp has helped to inspire retail investors to buy into PLTR after recognizing the potential of meme investing. Furthermore, the stock remains a popular option on Reddit boards today.
In terms of utilizing a company with strong fundamentals as a meme investment opportunity, there’s perhaps no better option than Palantir.
Chewy (CHWY)
There are no meme stock’s more fascinating in 2024 right now than Chewy (NYSE:CHWY). Given the weird and wonderful world of meme investing, that’s really saying something.
Chewy is an online pet food retailer. It entered Q3 2024 more than 77% adrift from its February 2021 all-time high value on Wall Street.
So, what’s changed for CHWY? Roaring Kitty. Despite long adopting a sole focus on GameStop, it was revealed in recent weeks that Keith Gill had purchased over nine million Class A shares in Chewy. This represents a 6.6% stake in the company.
Why the interest in Chewy? GameStop CEO Ryan Cohen founded the pet food retailer, which is likely to have strengthened Gill’s affinity with CHWY.
Gill’s most recent post on X was simply a cartoon image of a dog. This may signify a change of tact for the world’s most famous meme stock influencer. Is it enough to prompt a Chewy rally to the same meteoric highs as GameStop achieved in 2021? Only time will tell.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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.