GameStop vs. Beyond Meat: What Can These Meme Stock Rallies Teach Us?

The moniker "meme stock" was only created a few years ago. It was how Wall Street described GameStop (NYSE: GME), a struggling video game retailer that suddenly gained the attention of small investors chatting in online investment forums.

The sharp rise and subsequent decline of GameStop's stock price serve as a warning to investors that has not been heeded, as evidenced by the recent price action of Beyond Meat (NASDAQ: BYND). What lessons can meme stocks like GameStop, AMC (NYSE: AMC), and Beyond Meat teach us?

Mr. Market is as alive as ever

Warren Buffett, one of the most famous investors in Wall Street history, has explained that investing doesn't require anything more than average intelligence. After that point, what an investor needs is the right temperament. In other words, the ability to control your emotions is more important than being smart. He likely learned this from his mentor, Benjamin Graham.

Image source: Getty Images.

One of Benjamin Graham's most enduring creations is the concept of Mr. Market. This fictional character was used to explain just how fickle investors, as a group, can be. Some days, Mr. Market is excited and will buy at high prices. Some days, Mr. Market is moribund, and he will sell at low prices. An investor's goal is to understand Mr. Market's mood and, frankly, take advantage of it by buying stocks when they are cheap.

However, there's a counterpoint to Graham's Mr. Market analogy. Yes, you want to take advantage of Wall Street when investors are exuberant. And, at the same time, you also need to make sure you don't get caught up in the exuberance. It is easy to follow bullish investors like a lemming when the market is rising. That's where the story comes to meme stocks like GameStop, AMC, and, more recently, Beyond Meat.

What goes up fast can come down fast, too

Graham is often referred to as the father of fundamental analysis because he pioneered the idea of examining a business and its finances in detail before making an investment. The idea was to determine the value of what you were buying and then to compare that to the price Mr. Market, Wall Street, was offering you.

When it came to GameStop and AMC, which were among the first meme stocks, the business story was and still is fairly weak. GameStop is a struggling video game retailer, and AMC is a struggling movie theater operator. And yet their stocks rallied to exceptional levels in 2020 and 2021.

GME data by YCharts

To be fair, GameStop's stock price has held up better than AMC's. Still, both stocks are well off their peak during the meme rally, as the chart above highlights. There were reasons for each stock to rally, but the emotionally driven excitement surrounding the stocks was what drove the prices so high. Investors wanted to get in on the action and were willing to pay virtually any price. The subsequent price declines are clear evidence that the fundamentals weren't there to support the incredible price advances.

The big rally in Beyond Meat was a repeat of the story. What's shocking is that Beyond Meat's business has been performing poorly for several years, with the volume of imitation meat it sells declining in 2023, 2024, and through the first nine months of 2025. The volume gain in 2022 was a tiny 0.4%. It is hard to paint that trend with a positive brush and yet investors rushed in anyway.

BYND data by YCharts

It is hardly surprising that, following a brief rally, Beyond Meat's stock price has resumed its decline. To revisit Benjamin Graham, he has noted that Wall Street is a weighing machine over the long term, properly assigning value. Over short time spans, however, the stock market is a voting machine, where popularity is often more important than the actual value of a business.

The big takeaway: Contain your emotions

You can dissect the individual stories behind meme stocks like GameStop, AMC, and Beyond Meat, but that might lead you to miss the big picture. Simply put, when an investor's emotions take over, it can lead to bad investment decisions. Wall Street legends like Graham and Buffett have been explaining this fact for decades. If you heed their valuable advice, you won't have to learn the hard way by gambling and likely losing money with meme stocks.

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Beyond Meat. The Motley Fool has a disclosure policy.