Bram Berkowitz, The Motley Fool

Wed, Jun 11, 2025, 5:00 PM5 min read

• AMC was one of the original meme stocks.

• The large movie theater company has struggled, though, as streaming apps and other platforms like YouTube have stolen viewers.

• AMC is expected to report second-quarter earnings in August.

• 10 stocks we like better than AMC Entertainment ›

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?

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.

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.