Opendoor and Kohl’s Are Hot. But These Two Meme Stocks Just Crashed the Party.

Doughnut chain Krispy Kreme is looking like one of the market’s hottest new meme stocks. (CHARLY TRIBALLEAU/AFP via Getty Images)

Shares in real estate platform Opendoor Technologies and department store chain Kohl’s were stalling on Wednesday—but that doesn’t mean the latest meme-stock frenzy has fizzled out. Two other names have stolen the spotlight instead.

Opendoor, which tripled in value earlier this month before tumbling 10% on Tuesday, was down another 2.8% in Wednesday’s premarket. Kohl’s was flat, having jumped as much as 105% the previous session.

Retail investors have been piling into the two stocks, both of which are heavily shorted, amid a surge in interest on social-media forums including Reddit’s WallStreetBets. It feels like a rehash of 2021, when day traders piled into the likes of videogame retailer GameStop and movie theater chain AMC Entertainment.

Even as Opendoor and Kohl’s stalled, two other stocks were taking up the meme-trade mantle on Wednesday. Shares in doughnut chain Krispy Kreme surged 20% ahead of the opening bell, and mortgage lender Rocket jumped 14%. Both have significant short interest and have drawn interest on WallStreetBets in recent days.

Those gains might look appealing, but investors should be wary—trying to time the meme-stock frenzy can easily backfire.

“The risks are just as stark as the rewards,” Capital.com analyst Daniela Sabin Hathorn said Wednesday. “These surges are often disconnected from company fundamentals and can reverse violently. Traders who chase momentum without an exit strategy may be caught in painful drawdowns.”

Write to George Glover at george.glover@dowjones.com