The GameStop stock price got a huge boost over the weekend, which might be directly because of the new COVID-19 variant. However, investors are wondering if it is safe to ride the current market momentum or not.
Big losses are evident across the market in these last few days. The global economy struggled to recover after the discovery of this new delta COVID-19 variant. Negative numbers are seen mainly in stock markets and cryptocurrency charts, disproportionate to the March boost.
However, against all odds, shares for GameStop (NYSE: GME) closed the market with profits on Monday.
GameStop Stock Price Gets Massive Boost
Market Watch highlighted that GameStop GME closed at +2.6% on July 19. At the time of writing, it has a 10.2 percent growth, with a market value of $191.18. This momentum showed no signs of stopping.
In comparison, other industries posted their "worse result of 2021" sales, like the Dow Jones Industrial Average DJIA +1.52%. Reddit user WigglesPhoenix even said that "Banks, Disney, crypto, basically the whole market took fat losses today and it's business as usual while we outperform most of the market and the only news story I see is how meme stocks are losing steam."
This sentiment is directed to AMC Entertainment, which lost 10 percent of its shares, and Clover Health Investments Corp which closed at 1.2 percent on Monday.
Why Did GameStop Stock Price Increase Amid Threat of New COVID-19 Variant?
The most significant factor why GameStop got its massive boost is possibly the new COVID-19 variant. Back in 2020, there was also a huge surge for home quarantine activities like gaming, planting and carpentry. The sudden discovery of this delta variant could have probably led markets to invest in what they believe might be the most successful industry.
The video game industry has a history of selling out market stocks, especially in these last few months. This industry suffered a high market demand that led to a global chip shortage and gaming console shortage. Regardless of the challenges, gamers and players continue to wait out for more stocks!
It is also important to note that new gaming hybrid consoles have been released in the market. Nintendo recently introduced its upgraded version of Switch (OLED model), featuring a 7-inch screen and pricing at $349.99. Valve teased out a competitor called Steam Deck, which operates as a handheld Linux computer, making it a very powerful device.
These are some factors that helped boost GameStop stocks, all of which could also help maintain its potential for future sales.
Should You Invest in GameStop Stocks?
Generally, market stocks have a very unpredictable trend. Despite its good track record, GameStop could also lose its momentum as quickly as its sudden boost. The Motley Fool also pointed out that GameStop Corp. is not included in their list of "10 best stocks five years from now."
While the momentum for the GameStop market stock is currently strong, no analyst predictions could estimate how long this boost would last.
Related Article: Dogecoin Price Prediction: Is Elon Musk's Doge Influence Fading Amid Crash?