What Stocks Are Very Volatile? Stock market volatility is nothing new, but the past year has amplified moves up and down as economic lockdowns hampered business prospects. Investors can make big gains or lose their shirts overnight, especially with cryptocurrencies and Reddit retail traders pumping prices up to squeeze short sellers.
So, what stocks are very volatile?
We have to look both forward and backward to determine that. Some companies are volatile because of the market they’re in or their age. Others have specific interest from short sellers, day traders, and other retail investors but lack institutional support.
Meanwhile, there are future-based companies that still haven’t proved their profitability and long-term viability of their business models.
Here are five stocks that are very volatile on today’s market.
AMC Entertainment Holdings Inc (NYSE:AMC) initially mimicked GameStop’s stock market insanity that defined the 2021 stock market.
A subreddit called Wallstreetbets on Reddit fueled a rally around the company’s stock as it struggled at the apex of the COVID-19 pandemic.
Although movie theaters reopened, they’re still struggling to regain pre-pandemic revenue. Many major movie studios like Disney and Netflix have direct-to-consumer release models tested on blockbusters like Mulan on Disney Plus and Wonder Woman 1984 on HBO Max.
Despite all the odds being stacked against it, AMC’s market capitalization of $14 billion in June 2021 is the highest it has seen since 2017. That’s a landmark achievement that doubled the previous spike earlier in the year and shows just how sticky this Reddit march on Wall Street truly is.
What was once viewed as “dumb money” that couldn’t sustain itself is now being respected across the country. WallStreetBets and its meme stocks could outperform 2020’s darling ARK Invest and Cathie Wood. Of course, the Oracle of Omaha Warren Buffett always advises a long-term hold strategy of at least 10 years.
We’ll see if the degenerates at Reddit have diamond hands for the long haul.
Beyond Meat Inc (NASDAQ:BYND) was founded in Los Angeles, California in 2009 as a plant-based meat substitute company. Since launching its initial lineup in 2012, it became a media darling and gained a lot of high-profile partnerships. You can find Beyond Meat in McDonald’s, Taco Bell, KFC, Pizza Hut, and more around the country.
Even though it’s widely available in both restaurants and supermarkets, Beyond Meat still has a lot of obstacles hindering it from comfortably pulling over the $10 billion market capitalization level.
This includes supply-chain issues, high pricing, and the need to spread consumer awareness. On top of these challenges, major food producers are working to recreate the texture of a fine steak, as most plant-based substitutes are based on ground beef and pork products.
And there’s plenty of competition; besides Impossible Foods, existing meat manufacturers like Tyson Foods (TSN) are growing their own plant-based meat substitutes, and the category is becoming crowded fast. This makes for a bumpy ride for any current and potential investors.
If Beyond Meat can leverage its existing partnerships to grow more space on grocery shelves (which its partnership with PepsiCo hints at), it has the potential to become a juggernaut. But don’t expect an easy road to the top.
Virgin Galactic Holdings Inc (NYSE:SPCE) is the Mojave, California-based space-flight subsidiary of Virgin Group.
Founders Richard Branson and Burt Rutan have high hopes for the space industry, and the company even inspired ARK Invest’s Wood to create a Space Exploration and Innovation ETF under her fund.
Still, the company has yet to hold a successful launch, and it’s not expecting to do so until early 2022. It won’t be a surprise if that’s delayed further, as test launches often are in the private space flight industry.
Tickets for a ride into space cost $250,000 a piece, and there are over 650 tickets sold already. About half of those potential passengers paid before the company’s 2014 crash of a test flight. Things have been rocky since then, and that volatility shows in the company’s market value.
Expect this to continue being volatile until a successful consumer launch. That could send the stock to the moon, but it surely could crash again if any civilians become casualties.
Ooma Inc (NYSE:OOMA) is a Silicon Valley-based telecommunications company that provides state-of-the-art VoIP services for home and business. These digital phone lines are much more stable than cellular, and they provide a robust offering of personalized add-on services.
However, it’s a volatile small-cap stock because of the industry it’s in. VoIP is more popular than ever, especially with people working from home. And the company could possibly climb above a $500 million market valuation.
It’s unlikely to remain there for long though, as pricing instability is consistent across all major carriers. Telecommunications is not an easy game, and it’s to some extent due to its broad array of subsidiaries that this company is still afloat.
And that brings us to our final volatile stock.
GameStop Corp (NYSE:GME) is the apex stock of the WallStreetBets diamond hand community. It was featured in a congressional hearing in early 2021 that included the CEO of the Robinhood app and some of the biggest players on Wall Street.
The company’s business model is viewed as a dead end as gamers increasingly buy digital games. However, there’s a proven secondary market for physical games, especially first-party Nintendo games. And many games come with extras like toys, shirts, and other exclusive real-world collectibles fans still love.
While many thought the company’s stock price would be dead, Reddit’s community rallies around it, and GameStop is proving more sustainable than analysts first thought possible. It got a new breath of fresh air in 2021 while many struggling retail investors proved their dominance over hedge funds and ETFs.
There’s no telling where the volatility sill strike next.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.