Penny stocks and meme stocks are once again in the spotlight, with Gamestop (NYSE: GME) and AMC Entertainment (NYSE: AMC) experiencing triple-digit gains in a matter of hours. The stocks highlighted in this article are considered meme stocks, as they have surged by double digits in a short period of time, with the potential to continue rising. While high short interest plays a role in the increase of stock prices, it is not the sole driving factor in these markets.
Faraday Future Intelligent Electric Inc. (NASDAQ: FFIE) has seen a significant surge of over 100% in a single day and quadruple digits since the rally began. The rally is primarily driven by short-covering due to a lack of other news, as the company is involved in the EV market but has no tangible products and a high short interest. However, the rally is expected to lose momentum as there is little substance to support the stock’s growth.
AEye (NASDAQ: LIDR) is a robotics and autonomous vehicle company that recently experienced a 200% rise after releasing positive results and outlook. The company’s earnings report validated its business, leading to a surge in shares. Short interest is not a significant factor in this rally, with the stock showing signs of sustained growth.
Petco Health and Wellness Company (NASDAQ: WOOF) witnessed a 50% increase in its stock price due to short-covering. While the short interest is not as high as other stocks, it remains at 20%, enough to fuel a short squeeze. However, the stock faces challenges in surpassing critical resistance levels, with analysts’ consensus falling in recent months.
iPower (NYSE: IPW) is a small eCommerce retailer that has seen a 17.46% increase in its stock price. The company focuses on gardening and growing light equipment, with quarterly revenue below $25 million. Analysts rate the stock as a Buy, with potential for growth in the near future.
Canaan (NASDAQ: CAN) surged after news that its CEO and CFO would buy at least $2 million worth of their US-listed ADS. The rising prices of Bitcoin support the business, with short interest and short-covering contributing to the rally. Analysts rate the stock as a Buy, with the potential for further growth.
Overall, while these stocks have experienced significant surges in a short period of time, investors should exercise caution due to the speculative nature of these markets.