Meme stocks have become popular investment bets among retail traders, given their explosive growth potential. However, amid rising concerns surrounding the omicron variant, investors have been exiting their positions from these speculative stocks due to surging market volatility. Thus, popular meme stocks such as Walt Disney (DIS), GameStop (GME), Peloton Interactive (NASDAQ:PTON), and ContextLogic (WISH) are best avoided now.Meme stocks have been gaining traction since the beginning of 2021, as retail investors leveraged the power of social media to boost the popularity of their favorite stocks to sky-high limits. Since then, popular social media platforms such as Reddit forum r/wallstreetbets have been the go-to websites for retail investors for identifying the best short-term investment opportunities.
However, the recent market pullback, driven by rising concerns surrounding the omicron COVID-19 variant has also caused meme stocks to take a hit. This is evident from VanEck Vectors Social Sentiment ETF’s (BUZZ) 1.8% decline over the past month. Meme stocks tend to be very risky investments and highly depend on investor sentiment rather than macroeconomic factors. As investors hedge their portfolios against a severe market pullback, meme stocks are expected to slump in the near term.
Popular meme stocks The Walt Disney Company (NYSE:DIS), GameStop Corp . (NYSE:GME), Peloton Interactive, Inc. (PTON), and ContextLogic Inc. (WISH) have been slumping over the past few months. Moreover, with infrequent mentions on wallstreetbets, these fundamentally weak stocks are best avoided now.