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You know what they say—when in a corporate drought, recruit a popular celebrity to do the leg work for you.
That playbook seems to have worked for American Eagle, which saw its shares surge nearly 18% in premarket trading after unveiling a new campaign with actress Sydney Sweeney, known for her role in drama series Euphoria and romcom Anyone But You. Shares ended the day up 4.25%.
The denim ad, entitled “Sydney Sweeney Has Great Jeans,” comes at a tough time for the mall staple. Shares of American Eagle have sunk 32.27% in 2025, thanks to a broader consumer slowdown and fears that tariffs will hurt sales. Back in May, the company pulled its full-year guidance.
But today’s ad campaign triggered a different kind of revival for the company: a wave of retail trader attention. Like many meme favorites, AEO has steep short bets against it, which tends to drive interest from retail traders. Roughly 13% of available American Eagle shares are sold short, according to CNBC.
Meme-ing all the way to the top
American Eagle is just the latest nostalgic name to be elevated to meme status by a group of r/WallStreetBets loyalists, who started posting about AEO last night.
Other companies swept up in the latest meme stock craze this week include GoPro, Krispy Kreme, Opendoor, and Kohl’s. To outsiders, the names may seem totally random, but retail traders tend to go for household names with high short interest, buying shares en masse in order to to “squeeze” short sellers, who are forced to buy more shares to cover their bets, thereby pushing the stock even higher.
The recent meme stock madness has sparked a search for the next stock preparing to pop. Other highly shorted names include Hims & Hers, Wayfair, Etsy, and Rivian, according to Barron’s, while CNBC highlighted stocks like Beyond Meat and 1-800-Flowers.
Retail rewind: Retail traders became a force to be reckoned with during the pandemic years, beginning with the notorious GameStop short squeeze of January 2021. But since then, these average Joes have built increasing sway in the financial system.
With the Nasdaq and S&P 500 hitting fresh all-time highs this week, the meme traders are back and more confident than ever. These days, regulators and brokerages alike are making it easier to feed the meme frenzy in the hopes of keeping the rally going and raking in retail cash—which means we may get to see what kind of damage meme stock traders can cause when the leash really comes off.—LB