Should You Buy AMC Stock Before August?

AMC (NYSE: AMC), the world's largest owner of movie theaters, was also one of the original meme stocks that popped in 2020 and 2021.

Retail investors, through the power of social media and investing chat groups, started looking for stocks with high short interest, even if the company's fundamentals weren't strong.

They realized that by working together to purchase shares and refusing to sell, they could keep the stock price higher for longer, eventually forcing short-sellers to repurchase their borrowed shares, which they had to return to the original owners. The result is a massive short squeeze, which can lead to a stock melting up. While AMC's stock has crashed since its epic run, the name still has many loyal followers who think the stock can rally. Should you buy AMC before the company reports earnings some time in early August?

The box office continues to struggle

While people consume more content than ever before, movie theaters have not benefited from this trend. YouTube and streaming apps, and the ability to use these platforms on a variety of devices, have taken market share from movie theaters. The pandemic made it more mainstream to watch movies from the confines of home, and the streaming apps regularly release new content that bypasses movie theaters altogether.

Image source: Getty Images.

Even the most highly anticipated movies with big-name actors that start out in theaters only take a few months before they are accessible on a streaming app for free or can be purchased, often at a cheaper rental price than going to the theaters.

While many industries that struggled during the pandemic have now recovered, movie theaters are still struggling. Many experts thought this might be the year that the movie business recovered, but that hasn't been the case so far. In 2024, AMC reported a $353 million net loss, which improved 44% from 2023. Revenue dropped about 4% on the year. However, in the first quarter of 2025, which is believed to be a seasonally weak time for the sector, AMC reported a $202 million net loss and saw revenue decline 9.3% year over year. AMC CEO Adam Aron said he strongly believes the poor results are an anomaly.

"Anyone trying to draw any conclusions about the success or appeal of movie theatres from the results of the first quarter of 2025 is likely to be mistaken," Aron said in AMC's earnings release, adding that the first quarter of the year was the worst experienced by the industry since 1996, excluding a few quarters impacted by the pandemic. Aron added that demand for movie theater experiences has surged in the second quarter, with domestic box office activity up more than double in April and May on a year-over-year basis.

Should you buy AMC?

It's a bit hard for me to reconcile how the box office can be so volatile this year, but if Aron is to be believed there should be a bounce in the second quarter. A report from Grower Street Analytics earlier this year said that domestic box office totals in 2025 are supposed to jump 8% year over year, so perhaps the first quarter was an anomaly.

Still, AMC's financials are not yet compelling. Furthermore, my own experiences and trends with how I view content do not make me a believer in the box office. I find streaming at home to be far more convenient. I've learned to simply wait a few months to see most new movies that appear in theaters, and when there is a popular new movie out that I want to see, it's difficult to book good seats in a theater. While movie ticket prices have gotten more expensive, it's now much more affordable to purchase a large television and entertainment system for your house or apartment.

Considering these trends and no real financial proof yet that AMC is anywhere close to turning a profit or growing revenue, I think investors can find plenty of better opportunities to invest their capital over AMC.

Should you invest $1,000 in AMC Entertainment right now?

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Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.