Retail investors’ appetite for so-called memes is starting to fade, and 3 types of stocks may be the next target for this cohort of investors, according to a Wednesday note from Vanda Research.
Weekly purchases of a meme inventory package have fallen more than 50% this month, from a high of $963 million on June 8 to $417 million this week, according to the memo. as “few institutional investors can or dare to sell those inventories lower,” Vanda said.
AMC Entertainment is still trading below all-time highs of $56. 43 at Tuesday’s close, while GameStop’s percentage value remains above $200 for five full months after hitting a high of about $400 amid an epic shortcut.
Still, it’s very likely that retail investors will even abandon stocks and be investigating the next hot trade, which may very well be in the hydrogen, cryptocurrency or hashish sectors, according to Vanda.
Hydrogen stocks experienced significant inflows before the meme justice category exploded in early 2021, while hashish and cryptocurrency stocks “exploded as soon as industry restrictions on short stocks were put in place,” the note says.
While none of those speculative assets saw a giant retail share in the current quarter, FOMO’s retail trade is none other than that expected to take action as its costs continue to rise.
“If fair purchases continue to fall, retail investors will lean toward other speculative stocks, as they did in January and February,” Vanda concluded.