Krispy Kreme, GoPro both soar as the next darlings of this summer's meme stock resurgence

GoPro (GPRO) and Krispy Kreme (DNUT) surged significantly in early trading, gaining as much as 90% and 70% respectively, as they became the latest focus of a renewed meme stock rally. This speculative trading activity, driven by retail investors targeting small-cap companies, occurred despite both firms reporting recent revenue declines—GoPro's Q1 2025 revenue fell 13% and Krispy Kreme's dropped 15%. The rally highlights the re-emergence of frenzied small-cap trading patterns, often targeting heavily shorted stocks, though GoPro's short interest is comparatively lower than other meme rally participants.

Analysis

GoPro (GPRO) and Krispy Kreme (DNUT) are exhibiting extreme price volatility characteristic of a meme stock rally, driven by speculative retail investor interest rather than fundamental performance. The premarket surges of up to 90% for GPRO and 70% for DNUT are starkly detached from their underlying financial health. Both companies reported significant year-over-year revenue declines in Q1 2025, with GoPro's falling 13% to $134.3 million and Krispy Kreme's dropping 15% to $375.2 million. This highlights a critical divergence between market sentiment and operational reality. While the rally is thematically linked to targeting heavily shorted stocks, a key distinction exists between the two firms; Krispy Kreme fits the profile with a 28% short float, whereas GoPro’s sub-10% short interest suggests its inclusion is driven more by momentum and its status as a recognizable, low-priced stock. The recent performance of other meme stocks like Opendoor and Kohl's, which fell over 10% after their respective rallies, serves as a cautionary precedent for the ephemeral nature of these movements. Upcoming earnings reports in August will be a significant catalyst, potentially re-anchoring valuations to fundamentals.

Key Decisions for Investors

• Treat the share price surges in GPRO and DNUT with extreme caution, as they are driven by speculative momentum disconnected from weak fundamentals and are prone to sharp, rapid reversals similar to those recently seen in OPEN and KSS.
• Investors should differentiate the catalysts; DNUT's 28% short float provides a basis for a potential short squeeze, whereas GPRO's rally, with a sub-10% short float, is more purely momentum-driven and may be less sustainable.
• Monitor the upcoming August earnings reports for both companies, as the significant Q1 revenue declines could serve as a major fundamental catalyst to halt the speculative rallies.
• Traders engaging with these stocks must implement stringent risk management protocols, as the high volatility and precedent of swift downturns in similar meme rallies present a substantial risk of capital loss.