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When GigaCloud technology (NASDAQ:Conditions) emerged on its first day of trading, which investors everywhere took notice of. In fact, they watched closely. Wall Street had just been eyeing other Chinese tech firms AMTD Digital (NYSE:HKD) and Magic Empire Global (NASDAQ:ESTATE AGENTS) are showing unprecedented gains after their trading debut. As these names soared, speculation mounted as to whether the US markets would see another wave of meme stocks. Almost a month later, GCT stock is still steadily rising, even though its peers have slowly declined.
Since the initial public offering (IPO), GCT stock is up about 50%. Although it collapsed late last week as bearish energy swept through the markets, it has since recovered. Stocks are back in the green today. As of this writing, GCT stock is up about 60% on the day.
Meanwhile, both HKD and MEGL are trending steadily lower and seem reluctant to stage a comeback any time soon. However, all three Chinese tech stocks have proven that they can rise unexpectedly and take the markets by storm. Does that mean GCT stock is a good buy at the current price?
Let’s take a closer look at what investors can expect.
What will happen to GCT stock?
One thing we know about meme stocks is that they often move with collective momentum. We saw HKD and MEGL rocket onto Wall Street’s radar last month. But investors also know that meme stock rallies are often short-lived, especially when they’re propelling new stocks to such heights. Many retail investors searched for the next Chinese fintech IPO before either MEGL or HKD even fell. GigaCloud fit that bill perfectly, so investor interest was high when it started trading in the US markets. InvestorPlace contributor William White observed the following amid the stock’s rally on Aug. 19:
“It looks like meme stock traders have latched on to GCT stock as one of their big investments […] That prompted heavy trading yesterday as investors bid GCT shares higher with the IPO. This sent shares up as much as 62% yesterday and that momentum isn’t stopping today.”
Just under two weeks later, the momentum picked up again. GigaCloud didn’t release any company-specific news, and things haven’t necessarily been good for tech stocks. That Nasdaq Composite is still down despite an attempted rally this afternoon. So both trends suggest that the current GCT stock surge is being driven by strong meme interest in the stock, likely from the Reddit r/WallStreetBets amount.
Data from ApeWisdom supports this thesis; According to the Meme Stock Analytics platform, interest in the stock has skyrocketed this morning, with mentions up more than 4,000% over the past 24 hours. The general sentiment for GCT on various social media forums is high.
The final result
ApeWisdom isn’t showing that much interest in either HKD or MEGL, so it’s possible that investors are no longer considering the two Chinese fintech names. Rather, they seem to have turned their attention to the newer public GCT stocks. However, it’s unclear how long the momentum can last here, although GigaCloud has the advantage for now.
At the time of publication, Samuel O’Brient held no position (neither directly nor indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s publicity guidelines.
Samuel O’Brien has been covering financial markets and analyzing economic policy for more than three years. His areas of expertise include electric vehicle (EV) stocks, green energy and NFTs. O’Brien loves helping everyone understand the complexities of economics. He is in the top 15% of stock pickers on TipRanks.
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