A new meme stock ETF has launched and it says a lot about what retail traders want

The Roundhill Meme Stock ETF is back and began trading on Wednesday. It’s a reboot of a product the company launched in 2021 at the height of the meme stock craze.
Could it mark the top for the stock market? Its first launch coincided with the top for the Nasdaq Composite - by the time it closed two years later the index had shed about 10%.

It underscores investor appetite for strong-momentum and high-volatility (high beta) plays on this stock market. It also shows that Wall Street is taking seriously the impact of retail investors as a collective force in the stock market.

The MEME ticker is reborn, but it’s a little different in composition this time. For instance, it relies less on social media activity and short interest than before. This time it’s looking more for options market data to suggest which stocks have the highest implied volatility. It will be rebalanced at least once a week. Out goes GameStop and AMC, in comes the new breed of meme names, though not always the most obvious.

Unsurprisingly perhaps the holdings in the ETF are among the most popular stocks traded by retail clients at Saxo, such as Opendoor Technologies, BitMine Immersion Technologies, IREN and a bunch of quantum computing stocks. There is also room for innovative energy stocks like Plug Power (hydrogen) and Oklo (nuclear) that tap into the trend for growing AI energy demand.

Some of the stocks tap into retail-focused trends such as crypto and quantum computing. Some could be argued to be ‘meme’ stocks but really these are high-beta, high-volatility stocks that move a lot. Some of the ‘new’ meme stocks we looked at in July – such as Krispy Kreme, GoPro and Kohl’s - haven’t made the cut. Presumably that’s down to a lack of implied volatility – things move fast in meme land.

So it shines a light on where the growing contingent of active retail traders are looking next.

There are some interesting new names in the meme space and we see clear evidence of the AI-crypto-energy nexus at work.

POET Technologies is the latest meme craze – shares jumped 17% yesterday after popping 23% on Tuesday. Its optical communication tech is designed to inscrease the speed of data transmission in AI data centres. It’s also been the most positively mentioned ticker on Reddit’s r/WallStreetBets thread.

Cipher Mining builds and operates industrial-scale data centres for bitcoin mining and high-performance computing (HPC) hosting. It’s posted a YTD gain of 265% after rallying nearly 12% yesterday.

Bloom Energy makes solid oxide fuel cells for data centres and has risen 275% YTD, jumping after it signed a power generation deal with Oracle in July.

Here’s a list of the stocks included in MEME as of 8 October.