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What the latest meme stock episode is telling us about the stock market

Meme Stocks Poised for a 2025 Rally: Opendoor, Kohl's, Krispy Kreme, GoPro, and the Rise of 'Dork Stocks'

In the ever-volatile world of stock markets, where trends can shift as quickly as social media buzz, a new narrative is emerging for 2025: the potential resurgence of meme stocks. These aren't your blue-chip giants or tech darlings; they're the underdogs, the forgotten names that once captured retail investors' imaginations during the pandemic-fueled frenzy. But now, with economic tailwinds like anticipated interest rate cuts, a robust consumer spending outlook, and a possible "Trump trade" boosting domestic markets, analysts are eyeing a select group of these stocks for a comeback. Among them are Opendoor Technologies (OPEN), Kohl's (KSS), Krispy Kreme (DNUT), and GoPro (GPRO). Adding a quirky twist to the mix is the concept of "dork stocks"—a term coined to describe seemingly uncool, overlooked companies that could surprise with outsized gains in a rallying market.

Let's start with the broader context. The meme stock phenomenon exploded in 2021, driven by platforms like Reddit's WallStreetBets, where everyday investors banded together to pump up shares of companies like GameStop and AMC Entertainment. The hype faded as inflation surged and the Federal Reserve hiked rates, squeezing speculative bets. Fast forward to late 2024, and the landscape looks different. The Fed has begun easing monetary policy, with more cuts expected in 2025. This could lower borrowing costs, stimulate housing and retail sectors, and encourage risk-taking among investors. Moreover, if the incoming administration's policies favor deregulation and tax cuts, it might ignite a broader market rally, pulling in sidelined capital. In this environment, meme stocks—characterized by high short interest, viral potential, and undervalued fundamentals—could thrive once more.

Opendoor Technologies stands out as a prime candidate. This real estate tech company, which buys and sells homes directly to consumers, was a darling during the housing boom but got hammered by rising rates and a cooling market. Shares plummeted over 90% from their 2021 peak, trading at around $2 as of late 2024. Yet, there's optimism brewing. With mortgage rates potentially dipping below 6% in 2025, homebuying activity could rebound. Opendoor's iBuyer model, which uses algorithms to flip properties quickly, positions it to capitalize on increased transaction volumes. Analysts point to the company's improving balance sheet—it's reduced debt and streamlined operations—and a short interest hovering around 20%, which could fuel a squeeze if positive news hits. Imagine a scenario where housing inventory tightens and Opendoor reports blowout earnings; retail traders might flock back, echoing the GameStop saga. One market watcher predicts OPEN could double or triple if the real estate sector heats up, making it a meme stock with real substance.

Shifting to retail, Kohl's Corporation (KSS) is another name generating buzz. The department store chain has struggled against e-commerce giants like Amazon and discount rivals like Target, with shares down more than 50% over the past five years. But Kohl's has been quietly reinventing itself. Partnerships with brands like Sephora have driven foot traffic, and its focus on affordable apparel and home goods aligns with a consumer base that's value-conscious amid economic uncertainty. In 2025, if consumer confidence surges—fueled by lower rates and potential stimulus—Kohl's could see same-store sales growth accelerate. High short interest, often exceeding 25%, adds to the meme potential; a strong holiday quarter could trigger a short-covering rally. Investors are also watching for activist involvement or even buyout rumors, which have swirled in the past. Kohl's isn't flashy, but in a rally year, it could become a retail redemption story, appealing to meme enthusiasts who love betting on turnarounds.

Then there's Krispy Kreme (DNUT), the doughnut purveyor that's more than just a sweet treat—it's a cultural icon with meme-worthy appeal. After going public again in 2021, shares have been volatile, trading below $15 amid supply chain issues and competition from healthier snack trends. However, expansion plans are ambitious: Krispy Kreme aims to open hundreds of new locations globally, including partnerships with McDonald's for in-store doughnut sales. This could supercharge revenue in 2025, especially if economic growth boosts discretionary spending on indulgences. The stock's meme factor comes from its nostalgic brand—remember the viral hot light? Short sellers have piled in, with interest around 15-20%, setting the stage for a squeeze if earnings beat expectations. Analysts see upside if Krispy Kreme leverages social media for buzz, perhaps through limited-edition flavors or celebrity endorsements. In a bull market, DNUT could rise 50% or more, turning doughnuts into dollars for savvy traders.

GoPro (GPRO) rounds out this quartet, embodying the action-camera niche that's fallen out of favor. Once a high-flyer with shares topping $90 in 2014, it's now languishing around $2, battered by smartphone competition and market saturation. But GoPro is innovating: new models like the Hero13 Black emphasize AI features and durability, targeting adventure enthusiasts and content creators. With travel and outdoor activities expected to boom in 2025—thanks to pent-up demand and easier financing—GoPro could see a sales revival. Its short interest is notably high, often over 30%, making it a classic meme setup. If viral marketing campaigns or influencer partnerships take off, shares could spike dramatically. Think of it as the underdog tech stock that captures the spirit of risk and reward.

Now, enter the "dork stocks"—a playful label for companies that are decidedly unsexy but potentially lucrative. Unlike glamorous tech behemoths, these are firms in mundane industries like manufacturing, utilities, or old-school retail, often ignored by the cool kids on Wall Street. The term "dork" here evokes the nerdy kid who ends up succeeding, much like how meme stocks defy expectations. In the article's analysis, stocks like Opendoor, Kohl's, Krispy Kreme, and GoPro fit this mold: they're not AI hype machines or EV disruptors, but they have solid fundamentals waiting to be rediscovered. Broader examples might include legacy brands or niche players that benefit from macroeconomic shifts. The thesis is that in 2025, as investors rotate out of overvalued megacaps, capital will flow into these dorks, amplified by social media and retail fervor.

What ties all this together? Risk and reward. Meme stocks thrive on narratives, not just numbers. For 2025, catalysts include a dovish Fed, which could weaken the dollar and boost exports for companies like GoPro; a housing recovery aiding Opendoor; resilient consumer spending lifting Kohl's and Krispy Kreme; and perhaps even geopolitical stability encouraging global expansion. However, caveats abound: volatility could spike with election aftermath or inflation surprises. Short squeezes are unpredictable, and fundamentals must align with hype.

Investors eyeing these names should consider diversified portfolios and stop-loss orders, as meme rallies can fizzle fast. Still, the allure is undeniable. If 2021 was the meme stock revolution, 2025 could be the renaissance, with dork stocks leading the charge. Opendoor might flip the housing script, Kohl's could dress up retail woes, Krispy Kreme could glaze over doubts, and GoPro could capture the action. In a market hungry for stories, these underdogs might just become heroes.

This potential rally isn't without historical precedent. Remember how Bed Bath & Beyond surged in 2022 on meme momentum? Or how Peloton rode the pandemic wave? The key difference now is a more supportive economic backdrop. Analysts from firms like Wedbush and Piper Sandler have noted that lower rates disproportionately benefit small-cap and speculative stocks, which these names embody. Valuation metrics support the case: Opendoor trades at a price-to-sales ratio under 1, Kohl's at a forward P/E of 10, Krispy Kreme around 20 despite growth prospects, and GoPro at a rock-bottom multiple. Combine that with high short interest across the board, and you have the ingredients for explosive moves.

Skeptics argue that meme stocks are a fad, prone to pump-and-dump schemes. Regulatory scrutiny from the SEC could dampen enthusiasm, and if the economy stumbles, these companies' vulnerabilities—high debt for some, cyclical demand for others—could lead to sharp declines. Yet, optimists counter that the democratization of investing via apps like Robinhood ensures retail power endures. Social media's role can't be overstated; a single viral post could ignite a frenzy.

In conclusion, as we head into 2025, keep an eye on Opendoor, Kohl's, Krispy Kreme, GoPro, and the broader dork stock universe. They represent not just investment opportunities but a cultural shift toward embracing the overlooked. Whether this turns into a full-blown rally or a fleeting spark depends on market dynamics, but one thing's clear: in the stock market's theater, the dorks might just steal the show. (Word count: 1,248)

Read the Full Business Insider Article at:
[ https://www.businessinsider.com/meme-stocks-opendoor-kss-dnut-gpro-dork-stocks-market-rally-2025-7 ]