Meme stocks continue to create quite the buzz in the markets — and for good reason. Some of the returns investors have seen among this niche group have been very impressive. And while many meme stocks have somewhat leveled off after an incredible first quarter, there’s always the potential for another short squeeze around the corner.

Indeed, investors are always on the hunt to find the next GameStop (NYSE:GME), a meme stock that rose from under $20 at the start the year to nearly $500 per share in a month’s time. Such parabolic moves have become more commonplace. Thus, retail investors have been investing more time and energy into looking at heavily shorted names than at perhaps any other time in history.

With this much speculative interest in meme stocks, though, it can be hard to differentiate between the winners and the losers. After all, most of these highly shorted picks have been shorted for a reason. Obviously, it’s not fundamentals driving a lot of these moves.

That said, these seven meme stocks have still been making waves lately. In particular, I’ve had these companies on my radar for a while as potential momentum plays. But make no mistake — these are high-risk, high-reward names. As such, investors ought to practice proper portfolio discipline and size their positions accordingly.

So, without further ado, here are the seven meme stocks to consider right now:

• Root (NASDAQ:ROOT)
• Affirm (NASDAQ:AFRM)
• AMC Entertainment (NYSE:AMC)
• Sundial Growers (NASDAQ:SNDL)
• Beyond Meat (NASDAQ:BYND)
• Ocugen (NASDAQ:OCGN)
• SunPower (NASDAQ:SPWR)

Meme Stocks to Watch: Root (ROOT)

First up on this list of meme stocks, Root is an Ohio-based company that owns Root Insurance, a platform offering services across more than 30 U.S. states. This company uses big data and smartphone technology to run a platform that operates with a direct-to-consumer model. Via an app, Root has been successful in acquiring a tech-savvy customer base.

The insurance sector has been primed for disruption for some time. To that end, Root provides an easy-to-understand growth thesis. And as it turns out, this growth thesis has materialized in the form of earnings of late. For example, in the second quarter, the company’s written premium numbers accelerated 24% higher on a year-over-year (YOY) basis. With its strong growth, the company hopes to continue to gain market share in this space.

That said, a sharp spike in marketing costs did drive a larger-than expected net loss of $179 million this past quarter. This is a rather large increase over last year’s $39 million loss. Accordingly, the stock has become heavily shorted.

Investors who like ROOT stock like the underlying story with the company. Combined with the potential for a short squeeze, it’s clear why this insurance pick has been very volatile this past month.

Affirm (AFRM)

Affirm is a leading fintech firm offering “buy now, pay later” (BNPL) services. This San Francisco, California-based company provides installment loans at the point of sales, allowing customers to enjoy hassle-free shopping.

The BNPL industry is set to grow at a rapid rate. For example, one Worldpay research note shows that BNPL was responsible for 2.1% of all global e-commerce transactions in 2020. These macro trends are solid for all players in the space.

However, on a company-specific basis, Affirm has seen a lot of traction specifically. The company’s recent partnership with Amazon (NASDAQ:AMZN) has infused significant hype into the AFRM stock discussion, for instance. Additionally, Affirm has been enjoying consistent action on social media forums like Reddit. This is attributable to the company’s rather high short interest ratio.

This company’s recent results have been mixed, with revenue growth of 71%. Meanwhile, the company’s net loss ballooned this past quarter, suggesting margin growth may be a priority for investors long-term.

All said, this pick of the meme stocks has short-squeeze fundamentals and retail interest driving speculative fervor.

Meme Stocks to Watch: AMC Entertainment (AMC)

Now, to the king of all short-squeeze plays and meme stocks. AMC Entertainment is largely considered to have taken over the growth from GameStop, at least this summer. The theater chain saw retail interest explode, following an epic short squeeze in recent months.

One of the most-shorted stocks on the market, AMC continues to be a battleground stock for short sellers and retail investors looking to duke it out. Like GME, it was also one of the more significant short-squeeze stories to start the year.

What’s interesting about AMC stock, though, is that it has held most of its gains relatively well. Currently, investors can pick up shares of AMC for around $41. While this is well off from the company’s high back in the summer, AMC’s persistent price action — at levels well above where it started 2021 — has kept it in contention as one of the most popular meme stocks to hold into next year.

Of course, the company’s financials are rocky. These fundamentals coincide with AMC’s relatively high short interest. However, for investors looking to place some chips on a highly speculative name, this one remains the option of choice right now.

Sundial Growers (SNDL)

Another popular pick of the meme stocks, Sundial Growers has continued to see lots of attention from retail investors of late. This name is a Canadian cannabis company that deals with marketing premium cannabis for the adult-use market.

This marijuana stock has been trading around 70 cents per share for the past few months. However, SNDL has gone above $1 quite a few times this year. In fact, the company’s best rally of 2021 took SNDL stock to $3.96 at its highs back in February.

As for Q2 results released in late August, Sundial Growers’ net revenue stood at 9.2 million CAD ($7.4 million). Notably, the company also clocked a net loss of 52.3 million CAD ($42.4 million).

That said, Sundial’s balance sheet still looks to be in good shape. A series of equity offerings following the parabolic spikes in the SNDL stock price has allowed it to pay down debt as well as have more than 1.2 billion CAD ($950 million) in long-term investments.

So, there is a fundamental reason why some investors own this stock. However, Sundial remains highly speculative. Accordingly, interest around this stock has waned somewhat in recent weeks. Still, retail investors betting on a short squeeze may look at the recent dip as an opportunity to put some risk capital to work.

Meme Stocks to Watch: Beyond Meat (BYND)

Next up on this list of meme stocks is Beyond Meat, a California-based company providing plant-based meat substitutes for food items like burgers, sausages and more.

This company has gained significant attention in the last few years, helping BYND stock soar to all-time highs. In fact, overall BYND has performed relatively well this year, despite a decline of approximately 60% from its 2019 highs.

True, Beyond’s performance of late hasn’t been great. While the company did post a 32% YOY increase in revenue this past quarter, its net loss doubled to nearly $20 million. As you can see, there’s certainly a trend with these stocks.

Still, like the other companies on this list, Beyond Meat has a higher-than-average short interest ratio. So, there’s a short squeeze thesis with BYND as well.

No doubt, like the other ideas on this list, Beyond remains a higher-risk option. That said, there is a compelling fundamental long-term growth thesis with this pick. As such, this is a company I’ve got on my watch list right now.

Ocugen (OCGN)

Ocugen has really picked up a following among retail investors lately. One of the meme stocks that is often trending on social media, OCGN stock represents a play in the vaccine space.

The U.S. partner of Indian company Bharat Biotech, this name’s Covaxin Covid-19 vaccine is a hot topic currently. Specifically, the vaccine was recently put before the World Health Organization (WHO) and gained approval. Because of that catalyst, this stock has been much more volatile than usual.

As a vaccine play, Ocugen’s risk profile remains elevated relative to the broader market. However, there’s an obvious reason why investors are getting excited about this pick. Plus, in addition to the Covaxin vaccine, there are also other treatments the company is working on.

All told, the risk profile with OCGN stock may be less than the other meme stocks on this list. That said, as with any heavily shorted stock, investors should remain cautious with their position sizing.

Meme Stocks to Watch: SunPower (SPWR)

Finally, we have SunPower on this list of meme stocks, a company that deals with solar energy generation and storage.

This clean, renewable energy pick has been receiving a tremendous amount of attention lately. Of course, the recent COP26 climate summit has brought attention to this space. Additionally, other obvious catalysts include the upcoming infrastructure bill and general bullish sentiment in this sector.

SunPower has developed high-tech tools to provide efficient solar solutions for both homes and businesses. It is also involved in developing solar storage products and electric vehicle (EV) charging services.

This company reported solid financial performance in Q3. The solar energy player brought in more than $320 million in revenue. While net income declined, the company is still producing positive non-GAAP net income. That’s a bullish sign for long-term investors excited about the renewables space.

Additionally, SunPower’s balance sheet looks strong, with approximately $269 million in cash on the books. This bodes well for those with a longer-term thesis on this stock.

SunPower’s relevantly high short interest levels of late have spurred discussions of a potential short squeeze. While this pick has been volatile, it remains to be seen if a true squeeze can be on the horizon. For now, there are both speculative and fundamental reasons to own SPWR stock today.

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On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.