Wall Street Rebels Strike Again: Traders Pile Into Heavily Shorted Stocks in GameStop-Style Showdown

Reddit traders are reloading the playbook—targeting battered stocks with sky-high short interest in a déjà vu of 2021’s meme-stock frenzy. This isn’t your grandpa’s value investing.

The strategy? Simple. Find companies hedge funds love to hate, then swarm them with enough buying pressure to trigger a short squeeze. The result? A fireworks show of volatility—and a few blown-up hedge fund portfolios.

Why now? With crypto markets cooling, retail traders are redirecting their speculative energy back to equities. The tools haven’t changed: Discord groups, viral tweets, and that sweet, sweet FOMO.

Wall Street’s response? The usual mix of pearl-clutching and SEC murmurs—because nothing terrifies financiers more than ordinary folks using their own rules against them. (Except maybe realizing their ‘sophisticated models’ can’t predict internet mobs.)

One hedge fund manager sniffed: ‘This isn’t investing, it’s gambling.’ To which traders responded by buying another 100,000 shares. Touché.

Reddit traders hunt shorted names again

This week’s rally wasn’t a fluke. Day traders have returned to WallStreetBets in large numbers, pushing what they call “you-only-live-once” plays on companies with high short interest. GoPro and Krispy Kreme were two of the biggest movers, but the frenzy isn’t just about them.

CNBC scanned U.S. markets to identify other possible meme trades using three criteria: stocks with short interest above 30%, market values between $50 million and $2 billion, and share prices under $20. It’s a formula built to find the next target.

WallStreetBets users appear to be chasing exactly that. Instead of circling back to GameStop or AMC, traders are rotating into names that were barely mentioned before. But their goal remains the same: corner hedge funds.

That strategy has reemerged alongside a bigger push into equities overall. Data from VandaTrack shows individual investors put $155 billion into U.S. stocks and ETFs during the first half of the year, overtaking inflows from the 2021 meme stock bubble.

Meanwhile, the S&P 500 hit its 11th all-time high of 2025 on Monday, showing just how much appetite there is for risk. While some of that is institutional, a chunk clearly belongs to the speculative crowd. They aren’t waiting for confirmation or earnings beats, they’re diving into trades that carry real downside.

Galaxy Digital draws attention from Wall Street

Outside the Reddit sphere, crypto-linked names are also pulling in interest. On Tuesday, Jefferies gave a buy rating to Galaxy Digital, with analyst Jonathan Petersen setting a $35 price target, estimating roughly 20% upside from Tuesday’s closing price. Petersen pointed to clearer U.S. crypto regulations and surging demand for AI data centers as drivers for Galaxy’s long-term value.

Galaxy originally entered Bitcoin mining in 2020 but has shifted since then. Now, its mining infrastructure is being repurposed to host AI and high-performance computing operations. The company’s Helios facility in West Texas is already supporting workloads for CoreWeave, a major player in AI computing. Petersen emphasized that most of Galaxy’s expected growth is tied to this shift.

Elsewhere in the market, more meme tickers showed movement. Coinbase dropped to $391, falling 3.32%. Robinhood dipped 0.45% to $101.39. AMC traded at $3.48, down 0.71%. Circle climbed slightly to $198.87, while GameStop ended the day at $24.20, slipping 0.23%. None of these moves was driven by earnings, guidance, or any material disclosures. They were driven by speculation alone.

Back in Asia, Japan’s currency made headlines for different reasons. The yen gained ground against the dollar and euro early Wednesday after U.S. President Donald TRUMP announced a new trade agreement with Japan. But those gains were short-lived.

News broke midday that Prime Minister Shigeru Ishiba might resign after his party lost an upper house election. Although Ishiba responded quickly, calling the resignation talk “completely unfounded,” the yen briefly fell before bouncing back. By the close of day, the dollar was down 0.1% to 146.44 yen, and the euro had dropped 0.3% to 171.82 yen.

KEY Difference Wire helps crypto brands break through and dominate headlines fast