A "meme" refers to viral internet content in images with funny captions.

Meme stocks are low-priced stocks that ran up in price for no particular fundamental reason other than short-squeezes perpetuated by retail investor enthusiasm and social media hype. The ridiculous nature of the underlying price move exposed it to ridicule with clever memes that would gain popularity and go viral. Meme stocks are closer to penny stocks than blue-chip stocks and don’t pay dividends. The meme stock bubble of 2021 was a mania that melted in 2022. 

Even after the meme stock surge and bust, speculators are always searching for the next meme stock. Top meme stocks have certain requirements to qualify as potential meme stocks. Their fundamentals should be pretty negative, which draws in bears and short sellers who expect the stock price to fall lower. Logically, this makes sense since the fundamentals usually determine a company's underlying stock price. This negative sentiment causes short interest to rise, another key factor for meme stocks. Meme stocks must have a high short interest to spark a short squeeze. Meme stocks should have social media buzz, a huge rising volume and a small float. 

Which Stock Will Be the Next GameStop?

That is a guess at best. GameStop was unique because it had a 140% short interest, which is only possible through extensive naked shorting. That was the fuse triggering the short squeeze, which then took on a life of its own as it moved higher. Even GameStop can’t be the next GameStop stock with just a 16.95% short interest repeating what happened at the dawn of the meme stock bubble. The next GameStop stock will have to have more than a 100% short interest.

A look at the first meme stock helps to provide an idea of what can transform a stock into a meme stock. GameStop was a dying video game retailer, one of the last ones standing. GameStop stock had a 140% short interest, making it highly susceptible to a short squeeze, akin to lighting a match in a kerosene-soaked warehouse. 

To have a short interest over 100% means there are illegal naked shorts. The float was also relatively small, at just over 56 million shares. Many astute retail traders figured if GME shares were to rally, it could cause a crazy short squeeze as the overcrowded short side would be forced to cover to avoid taking large losses. 

The higher the price of GME rose, the more that shorts would chase it to buy and cover their short positions. Additionally, forced margin calls would automatically trigger short covering surges of buying pressure.  

GameStop had already risen from $4 to $19 in the months leading up to the meme stock mania. It ushered in the meme stock era during its historical climb from $19 on Jan. 14, 2021, to a high of $483 on Jan. 28, 2021.

Retail traders and popular Reddit forums like Wallstreet Bets viewed GME as a way to "stick it" to Wall Street, or “Eat the Rich" as rich hedge fund managers took a bath in the squeeze while the average little investor and speculator got rich. This theme underscored a movement that united retail investors as social media was abuzz, and legions of retail investors scoured social medial sites for what's new meme stock-wise. 

The Reddit message boards jumped on other stocks with horrible fundamentals, small floats and high short interest, eventually calling them meme stocks. New meme stocks were christened almost daily. The world’s largest movie theater operator AMC Entertainment Holdings Inc. (NYSE: AMC), became synonymous with the meme stock frenzy as shares squeezed from $2 to $72.62 on June 2, 2021. 

Many stocks latched onto the meme stock frenzy, including photography supplier Eastman Kodak (NASDAQ: KODK), which rallied from $2 to $60 in July 2020. Blackberry Ltd. (NYSE: BB) rallied from $6.52 up to $28.77, and luxury electric vehicle (EV) startup Lucid Group Inc. (NASDAQ: LCID) was a special purpose acquisition company (SPAC) Churchill Capital Corp. that surged to a high of $64.86 from $10. Ultimately, meme stocks lost momentum and sold off in the correction of 2022. 

GME had a four-for-one stock split on July 6, 2022. GME eventually fell to a low of $61.54 (pre-split) on Jan. 6, 2023. The rally in the stock market in 2023 may set the stage for another meme stock rally. While everyone is searching for how to find the next meme stock, we have a list of six that could be the ones.

6 Choices for the Next Meme Stock

Here is a list of six stocks that may usher in the next meme stock frenzy or just short squeeze by themselves. While everyone wants to know, "What is the next meme stock to surge?" it’s important to know what happens to most meme stocks. 

Each potential meme stock on this list has weak fundamentals, relatively small float and high short interest, which can trigger social media buzz and surging volume as prices rise. Many of the stocks on this list are already up large in 2023 due to short squeezes, so do your research before taking any positions. Here’s our list to answer the question, "What is the next meme stock to make headlines?"

1. Tupperware Brands Co.

The iconic plastic storage wear and kitchen product manufacturer, Tupperware Brands Co. (NYSE: TUP), has seen its stock collapse on weakening sales. The company doesn't sell its products in stores but through its direct sales and multilevel marketing (MLM) through independent reps hosting "Tupperware parties." Its antiquated selling model has been a key detriment to its downfall because you can buy plastic containers online through numerous outlets at much lower prices. 

Tupperware has virtually no competitive advantage, and its sales model is a hindrance rather than helpful. The company also sells kitchen utensils and products from cutting boards to measuring cups. The company, or the "consultants," also sells cosmetics and travel container products. The company has seen declining sales and has pushed back its 10-K report, and received a non-compliance listing notice from the New York Stock Exchange on June 7, 2023. All this seems like very bearish news, so its short interest rose to 27%.

2. Carvana Co.

Used car reseller known for their massive automobile vending machines, Carvana Co. (NASDAQ: CVNA) was once a $376 stock in August of 2021 before plunging to a low of $3.55 by December 2022. There's nothing quite like a downgrade to a $1 price target with bankruptcy concerns to crush sentiment on stock and suck in short sellers. 

On Nov. 22, 2022, Morgan Stanley analyst Adam Jonas warned that CVNA could be a $1 stock due to the deteriorating car market and high-interest rates. On Dec. 7, 2022, Wedbush downgraded shares of CVNA to $1 as analyst Seth Basham believed the company would run out of cash by the end of 2023, based on news that its largest creditors signed an agreement for cooperating in a restriction. 

Carvana shares have already been in a short squeeze as shares rose as high as $57.19 and have rallied over 1,000% in 2023. The short squeeze caused short interest to fall back to 21%, but anything above 20% is still considered a high short interest. 

3. Upstart Holdings Inc.

Artificial intelligence (AI) powered cloud-based lending platform Upstart Holdings Inc. (NASDAQ: UPST) sought to disrupt the lending industry. The platform accesses over 1,000 data points instead of conventional credit scores to better assess a borrower's creditworthiness. 

It connects borrowers with lenders, including more than 60 banks and credit unions, to find the right match. The company claims that deriving a credit score is more accurate, reduces lenders' default risk, and provides borrowers with faster and more personalized loans. UPST reached a high of $401.49 in October 2021 and fell to a low of $11.93 in May 2023. UPST shares are up over 430% in 2023, propelled by its 37.44% short interest.

4. Beyond Meat Inc.

Plant-based meat producer Beyond Meat Inc. (NASDAQ: BYND) kicked off the plant-based meat frenzy when it went public in 2019, reaching a high of $239.71 in July 2019. BYND fell to a low of $48.18 and bounced back to $221 by January 2021. 

It sold off to a low of $9.92 in June 2023. Despite its partnerships with well-known fast and casual restaurants, sentiment turned sour as the competition crawled out of the woodwork, diluting its market share. The supply chain disruption during the pandemic also impacted operations. The company has not profited in its operating history since its launch in 2009. BYND has a 36.86% short interest. Shares are only up 27% in 2023.

5. Allogene Therapeutics Inc.

Clinical-stage biotech Allogene Therapeutics Inc. (NASDAQ: ALLO) specializes in immunotherapy for oncology. They develop allogeneic chimeric antigen receptor T (CAR-T) cell therapies for treating solid tumors. CAR-T is an immunotherapy that uses a patient's T-cells to fight cancer. 

T-cells are white blood cells responsible for fighting infections. The process involves extracting a patient's T-cells and modifying them to produce specific receptors on the outside known as chimeric antigen receptions (CARs). These CARs are multiplied in heavy quantities in a lab and re-infused into the patient's body. The CARs can identify specific antigens on the surface of cancer cells to target them for termination. CAR-T treats lymphoma and leukemia successfully but can cause cytokine release syndrome (CRS).  

Allogenic CAR-T is also called "off-the-shelf," where other T-cells are donated rather than a patient's, allowing for speedier and more consistent treatment. It's also beneficial for cancer patients with low or unhealthy T-cells. One of the biggest threats is the potential for graft-versus-host disease (GVHD), where the donated T-cells attack the patient's healthy cells as it views them as foreign. ALLO shares reached a high of $55 in May 2020 and fell to a low of $4.30 in June 2023. ALLO has a 53.88% short interest.

6. C3.ai Inc.

The artificial intelligence (AI) mania hit its full strike in 2023 as it hit the mainstream through the viral acceptance of ChatGPT. C3.ai Inc. (NYSE: AI) provides enterprise AI solutions and consulting to major companies like oilfield giant Baker Hughes Inc. (NYSE: BHI), aerospace giant The Boeing Co. (NYSE: BA) and the world’s largest defense contractor, Lockheed Martin Co. (NYSE: LMT). 

C3.ai has over 100 Fortune 500 companies using its platform. It also has the best stock symbol AI when AI integration and usage is a major tailwind. AI shares peaked at $183.90 in December 2020 before selling off to a low of $10.16 in December 2022. The global AI frenzy has sent AI shares up over 260% in 2023. The company has a 34.95% short interest. The short interest climbed on a bearish report released by Hindenburg Research, which sent shares falling by nearly 40% before surging through its yearly highs, peaking at $48.87 in June 2023.  

Avoid the FOMO

What is the best meme stock to buy? Meme stocks and their trading patterns are constantly changing. Some of the best meme stocks have made strong moves higher in 2023. The "best" meme stock may often have climbed the most but also has the highest probability of falling back down. The best meme stock to buy meets the criteria of poor fundamentals, high short interest, a small float with social media buzz and rising volume. Check out our list of six that could be the next meme stock to make headlines.

Meme stocks rely on the fear of missing out (FOMO) and short-squeezes to accelerate and maintain their altitude. FOMO drives the pain of a missed meme stock, making you anxious to jump on the next big meme stock. 

It's vital to control your emotions should you take a position in a meme stock. Remember, they are best for trading as underlying fundamentals tend to be weak, which causes bears to short the stock, resulting in high short interest. Meme stocks don't have to be rational. The more irrational it is, the more likely short-sellers get involved and the more potential it has to short squeeze. 

However, it's worth noting that every meme stock mentioned in this article has sometimes fallen over 90% from its highs. For this reason, they can be dangerous and are only worth holding if you get in at a good price and things are fundamentally improving.