The fever of 2021 meme stocks hits Wall Street once more as Kohl's, and Opendoor grips the market in 2025.

Retail traders, armed with smartphones and a thirst for quick riches, have reignited a speculative frenzy, propelling Kohl’s Corp and Opendoor Technologies Inc into the stratosphere. This resurgence mirrors the chaotic days of GameStop and AMC Entertainment, when amateur investors turned heavily shorted stocks into weapons against hedge funds. Yet, beneath the euphoria lies a complex tapestry of market dynamics, economic uncertainty, and the undeniable power of the retail crowd.

Kohl’s: The Department Store Turned Meme Darling

Kohl’s Corp, a department store chain battered by shifting consumer habits, has improbably emerged as the poster child of the 2025 meme surge. On Tuesday, July 22, its shares erupted, briefly doubling to a 10-month high of $21.23 before settling at $14.48—a 39% daily gain. Trading volume exploded to 183 million shares, 25 times the stock’s 25-day average, while options activity hit fever pitch with 360,000 contracts traded, 12 times the norm. Call options betting on a rise above $17.50 by week’s end dominated, signaling unbridled speculative zeal.

What sparked this wildfire? High short interest—49% of Kohl’s float—made it a juicy target for a short squeeze. Retail traders, galvanized by platforms like Stocktwits and WallStreetBets, pounced, forcing short sellers to scramble for cover and amplifying the rally. The parallels to 2021 are striking: a coordinated swarm overwhelming a stock with little fundamental justification. Kohl’s, down a third this year amid leadership upheaval and short-seller scrutiny, became a canvas for retail bravado rather than a reflection of its retail woes.

Opendoor: Riding the Real Estate Rollercoaster

Meanwhile, Opendoor Technologies Inc, an online home-flipping platform, has ridden its own meme-fueled rocket. In just six trading sessions, its stock soared over 300%, peaking before a 10% dip to $2.88 on Tuesday. Despite a housing market choked by high interest rates and low inventory, Opendoor’s high short interest and low share price drew retail hordes. Hedge fund manager Eric Jackson of EMJ Capital fanned the flames with an audacious $82 price target, a call amplified across Reddit and X.

Yet, Opendoor’s fundamentals paint a bleaker picture. The company has never turned an annual profit, and analysts predict losses through 2026. Its business model—buying and selling homes in a sluggish market—faces stiff headwinds. The rally, then, is less about valuation and more about momentum, a classic short squeeze fueled by retail traders betting against the shorts. It’s a high-stakes game of chicken, with social media as the megaphone.

Krispy Kreme: A Doughnut-Fueled Short Squeeze

Adding to the meme stock frenzy is Krispy Kreme Inc (DNUT), the iconic doughnut chain that has seen its stock surge 26% despite a string of negative developments. Unlike Kohl’s and Opendoor, Krispy Kreme’s rally comes with no recent positive news—in fact, the headlines have been dismal. In May, the company’s first-quarter report disappointed, leading to a dividend cut and the termination of its unprofitable partnership with McDonald’s. Krispy Kreme also appointed a new CFO amid leadership changes, while its debt ballooned to $935 million. The company remains unprofitable on a GAAP basis, grappling with softer-than-expected demand.

Despite these headwinds, Krispy Kreme’s short interest had climbed to 14.2% of shares outstanding and a staggering 26.4% of its publicly traded float by June 30. This high short interest, combined with a relatively low float, made it an attractive target for meme stock traders. On Tuesday, the stock surged as retail investors piled in, likely aiming to trigger a short squeeze. The lack of fundamental justification for the rally underscores the speculative nature of the meme stock phenomenon—where sentiment and coordinated buying, rather than financial health, drive stock prices.

Why Now? Decoding the Meme Stock Resurgence

The meme stock revival isn’t a random flare-up—it’s a symptom of a market teetering on euphoria’s edge. The S&P 500 sits at record highs, Bitcoin flirts with $120,000, and Cathie Wood’s ARK Innovation ETF has surged 34% this year. SPACs are back, blank-check fever is spreading, and retail traders now drive 20.5% of U.S. stock market volume. Low-priced stocks under $5 account for over 26% of trading activity, a playground for the risk-hungry.

Steve Sosnick, chief strategist at Interactive Brokers, calls it a “flight to crap”—a shift from blue-chip rallies to speculative gambles. Unlike 2021, when stimulus checks and lockdowns fueled the fire, today’s backdrop is dicier. Jobs are scarcer, interest rates bite, and student loan repayments loom. Yet, fear of missing out (FOMO) trumps caution. Michael Arone of State Street Investment Management notes the liquidity flooding markets, feeding a cycle of new highs and bolder bets.

Social media amplifies the madness. WallStreetBets buzzes with Kohl’s and Opendoor chatter, echoing its 2021 role as a retail rallying cry. Crypto crossover adds fuel—Michael O’Rourke of JonesTrading sees meme stock enthusiasm spilling over from digital asset hype. After a tariff-induced market scare earlier this year, Trump’s policy pause sparked the fastest bear-market recovery ever, padding wallets and stoking risk appetite.

Risks and Rewards in a Frothy Market

This isn’t a game for the timid. Meme stocks thrive on sentiment, not substance, and their surges often end in tears for latecomers. Kohl’s and Opendoor exemplify the disconnect: one a struggling retailer, the other a profitless tech play. Mike Bailey of FBB Capital Partners warns of “irrational exuberance,” a bubble primed to burst. The 2021 safety net—stimulus cash and low rates—is gone, replaced by a tighter economic rope.

Regulators may take note. The SEC could tighten oversight as retail coordination via social media challenges market surveillance. For now, retail traders hold sway, forcing institutional players to adapt to a landscape where crowd power can trump fundamentals. Arone draws a 1998 parallel: volatility paired with strong gains. He’s “uncomfortably bullish,” but the unease is palpable.

The Road Ahead: Boom or Bust?

Kohl’s and Opendoor are the latest chapters in the meme stock saga, a testament to retail traders’ enduring clout. Their rallies have minted quick fortunes and burned short sellers, but the foundation is shaky. As market euphoria clashes with economic reality, the question looms: can this frenzy hold, or will it fade faster than its 2021 predecessor?

Investors face a tightrope. Meme stocks offer tantalizing upside but punishing volatility. Prudence demands skepticism—fundamentals matter, even when the crowd says otherwise. For now, the market’s wild ride continues, driven by a retail army rewriting the rules, one tweet at a time.