GameStop Partying Like It's 2021: What's Behind Its 2025 Rebound?

The carnival has returned to GameStop Inc. (NYSE: GME) in 2025 as the stock regained its meme form. As usual, steep drawdowns followed outrageous rallies, and the stock ticker frequently trended on social media.

But the peaks and valleys haven’t been as drastic, and the two significant uptrends this year seem to have diametric catalysts.

What’s behind this sudden revival, and is anything about it sustainable? You'll likely be disappointed if you're hoping for a 2021 redux. 

However, GameStop is showing something it never showed during 2021: improving fundamentals.

GameStop Collectibles Supporting Fundamental Improvements 

If you have a mint-condition Ken Griffey Jr. rookie card in your attic, your patience (or forgetfulness) has finally paid off. Collectibles like baseball trading cards have experienced a surge in value, growing to a $13 billion business in 2025 with an expected compound annual growth rate (CAGR) of 8%.

Unlike NFTs or digital assets, trading cards and collectibles are tangible items that can be physically held, and therefore require a physical location for transactions. 

Is this actually bringing customers back into stores?

Just ask Target, which had to limit Pokémon card sales due to safety concerns. People are getting a little crazy over their cards again, and GameStop is pouncing on this resurgent trend with a growing collectibles business.

The company reported Q2 2025 earnings after the market closed on Sept. 9, and beat on both EPS and revenue. It was GameStop’s first top and bottom line beat since Q2 2023, and the revenue figure represented nearly 22% year-over-year (YOY) growth.

The collectibles division experienced parabolic growth, surging 63% year over year to $228 million. Hardware also jumped 31% to nearly $600 million, and (of course) the company bought more Bitcoin, which was valued near $530 million by quarter’s end.

Since the report, GME shares have continued to gain steam, and the stock has been up 13% in the last 30 days.

Comparing the Current Rally to the Previous Price Spike in May

GME shares spiked to a 2025 high in early May, but this rally appears to be more fluff than substance. The initial spike occurred when the company announced an intention to buy Bitcoin as part of a crypto treasury strategy.

More fuel was thrown on the fire when CEO Ryan Cohen took a picture with crypto enthusiast and sometimes CEO of Strategy Inc. (NASDAQ: MSTR), Michael Saylor. GME shares surged from $22 to $36 in two months, driven primarily by social media speculation and high short interest narratives.

Remember, at this point, the company hadn’t even purchased any Bitcoin and had missed revenue expectations in Q4 2024 and Q1 2025. 

And you may be shocked to hear this, but this particular rally fizzled quickly, and the stock was back at $22 per share less than three weeks later.

Choppy trading has been the theme for GME in 2025, but this recent rally looks to have fundamental and technical support. The positive earnings release was preceded by momentum matriculating under the surface, as shown on the daily chart's Moving Average Convergence Divergence (MACD).

Despite a Death Cross and three months of range-bound trading, the MACD signaled a potential move higher, and now the price appears to be following suit by breaking above the 50-day and 200-day simple moving averages (SMAs). 

The previous rally also included a bullish MACD crossover preceding the stock price crossing the two key SMAs, so this area around the 200-day average will be a crucial area to watch in the next few sessions. If the price can break above this level meaningfully, it could trigger another wave of buying from retail investors.

Upward Momentum Could Be Capped, So Trade Carefully

Despite the improved fundamentals and technical tailwinds, GameStop stock is likely to remain capped by the reality of the business. The soaring collectibles division still represents only 25% of total revenue, and the uptrend in hardware sales may not be sustainable.

Remember, GME used to easily top $1 billion in revenue almost every quarter between 2015 and 2023, including several periods during the pandemic. However, the company has generated more than $1 billion in quarterly revenue just once since Q4 2023, which you don’t want to see from the retail sector when the consumer is strong.

Additionally, the stock is susceptible to crypto volatility based on its Bitcoin holdings and maintains its status as a meme stock darling on social media. And despite multiple rallies this year, the stock is down 17% year-to-date, indicating that bullish trends are still fleeting.

Until GameStop can prove its fundamental turnaround is sustainable, GME remains a stock to trade, not one to invest in for the long term.

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