Shares of Wendy's soared on Wednesday as retail investors piled into the beaten-down fast-food chain, triggering a sharp rally reminiscent of the meme stock frenzy that gripped Wall Street in 2021.
The stock jumped as much as 41.9% during the session before settling about 28.5% higher at $9 after trading resumed following multiple volatility-related halts. The rally briefly lifted the shares to their highest level since November 2025.
According to Reuters, Wendy's emerged as the top trending stock on retail investor platform Stocktwits, while it ranked second in mentions on Reddit's WallStreetBets forum over the previous 24 hours, highlighting a surge in interest from individual traders.
Data from Vanda Research, cited by Reuters, showed retail investors purchased a net $2.3 million worth of Wendy's shares during the first half-hour of Wednesday's trading, adding to another $2.2 million in net buying earlier in the week.
The stock has been under pressure for an extended period, declining more than 78% from its record high reached in June 2021 and falling nearly 25% so far this year. The company has been grappling with sluggish sales and pressure from an activist investor. It recently appointed a new chief executive officer and named a new chief financial officer earlier this week.
As per the Reuters report, short interest in Wendy's stood at about 34% of its free float, making it one of the most heavily shorted stocks in the market. If Wednesday's gains are sustained, bearish investors would be facing an estimated $45 million in paper losses.
While the rally fueled speculation of a potential short squeeze, market analytics firm ORTEX believes most short sellers have not yet been forced to exit their positions, as many remain close to their original entry prices despite the stock's sharp rise.
The latest surge echoes previous meme stock episodes, including the dramatic rallies in GameStop and AMC Entertainment during 2021, when coordinated buying by retail traders inflicted heavy losses on hedge funds betting against those companies. More recently, Avis Budget also experienced sharp swings driven by speculative trading.
Trading activity in Wendy's shares was exceptionally strong, with more than $790 million worth of stock changing hands by mid-morning, according to LSEG data cited by Reuters. That volume was roughly 11 times the company's average daily trading value over the past year.
