Krispy Kreme, Inc. (NASDAQ: DNUT) is making headlines with a massive surge in its shares, which are up more than 13% in a single day through July 23, 2025. This surge, driven by retail investor enthusiasm and social media buzz, has put the doughnut giant in the spotlight as the latest meme stock favorite. But what's behind this wild surge, and is it a lucrative deal or a sign of trouble? Let's take a closer look.
Krispy Kreme stock soars in wild meme stock frenzy.Why Is Krispy Kreme’s Stock Soaring
The surge in Krispy Kreme shares is a great example of the meme stock craze, reminiscent of the GameStop and AMC surges of 2021. Retail traders, armed with the influence of social media, are pushing the stock to new highs. On July 22, 2025, the stock surged 26.7%, followed by a premarket surge of 18.5% to 34% on July 23, to hit around $4.88. Behind this frenzy are:
- High short interest: With 28% to 32% of Krispy Kreme's free-floating shares shorted, it is a prime target for short squeezes. Short sellers are scrambling to cover their positions, driving up the stock price, with trading volume for call options reaching 100,000 contracts on July 22—71 times the average daily volume of the past four years.
- Social media buzz: Platforms like Reddit's WallStreetBets, StockTwits, and X are abuzz with the #DNUTsqueeze and #KrispyMoon hashtags. Bullish mentions on these platforms have surged by more than 3,500%, and ex-users like @atmdotday have fueled the stock's rapid gains, with the market cap jumping from $719,000 to $4.28 million in a matter of hours.
How Does This Fit Into the Bigger Meme Stock Picture
Krispy Kreme isn't alone in this rally. Other heavily shorted stocks like GoPro (up 39% to 60%), Kohl's (up 38%), and Beyond Meat (up 10%) are also riding the meme stock wave as of July 23, 2025. The broader market's bullish environment, with the S&P 500 and Nasdaq hitting record highs, is further fueling this risk-off sentiment. Retail traders are taking advantage of this optimism and targeting stocks with high short interest for potential sell-offs.
What’s the Catch With Krispy Kreme’s Fundamentals
Despite the hype, Krispy Kreme's fundamentals aren't particularly encouraging. The company reported a 15% drop in revenue in the first quarter of 2025 to $357.2 million, posting a non-GAAP loss per share of $0.05, compared to a profit of $0.07 in the prior year. Recent moves such as ending its partnership with McDonald's, suspending dividends, and withdrawing its 2025 forecast indicate financial challenges. Its Altman Z-score of 0.49 also indicates a risk of bankruptcy within two years. This gap between stock price and fundamentals rings alarm bells for long-term investors.
What Are Investors Saying About the Rally
Sentiment on X is mixed. Some users, like @buccocapital, are warning that Krispy Kreme's rally will not match GameStop’s 2021 spectacular performance, while others are riding the wave and celebrating the stock's volatility. StockTwits' trend was neutral as of June 25, 2025, but recent posts indicate a growing bullish momentum. The Motley Fool advises caution until Krispy Kreme sees a real turnaround, and emphasizes the risks of chasing the meme stock's highs. Should
Should You Jump on the Krispy Kreme Bandwagon
Krispy Kreme stock rally is an exciting ride, but it's not for the faint of heart. Meme stock rallies are notoriously volatile, and Krispy Kreme weak fundamentals put it at risk for a massive drop. Investors should tread carefully, gather all the information, and have clear exit strategies.
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