Is This Game On for GameStop Stock? It's been 16 months since GameStop Corp. (NYSE: GME) blasted into the stratosphere fueled by extreme trading euphoria. Since its abrupt return to Earth,

It's been 16 months since GameStop Corp. (NYSE: GME) blasted into the stratosphere fueled by extreme trading euphoria.

Since its abrupt return to Earth, there have been a few minor ignitions but nothing of the epic variety. Still, loyal meme stock enthusiasts have stayed at the ready awaiting the next launch.

Signs of a potential sequel are back.

Buoyed by a sorely needed market rebound, GameStop's 43% surge last week made it one of the best performers among U.S. stocks. Better yet, the video game retailer turned mixed media bag regained its 50-day in strong volume.

While this is often a bullish move that precludes an extended rally, with GameStop we've seen this act before. In March 2022, a 10-day rally that brought the stock to within pennies of $200 was greeted by a short seller attack and market weakness that swiftly dragged it back under $100.

Could this time really be different?

Why Did GameStop Stock Go Up?

On May 23rd, GameStop launched a new digital wallet for cryptocurrencies and non-fungible tokens (NFTs). The Ethereum-based wallet will let gamers and collectors store and transact in these two assets straight from a web browser.

The launch is part of GameStop's broader ambitions in the NFT space as it continues to diversify away from its traditional video game retail business. In the coming weeks, the company plans to roll out its own NFT marketplace in a bid to cash in on a hot alternative investment area and stimulate growth. Last month, Technavio issued a report that estimated the global digital artwork market will grow at a 35% rate over the next five years.

GameStop's wallet news was far from earth-shattering. It has been transparent about its NFT plans and a dive into crypto. In fact, the stock barely budged on the news.

The news did, however, stoke the fire in that it got social media buzzing again about the wildly popular meme play. It wasn't long after that GameStop was the top trending name on both Reddit's Wall Street Bets and Stocktwits.

When Does GameStop Report Earnings?

What also helped get the chatter mill churning was management's announcement of the first quarter earnings date, which came the same day as the GameStop wallet release. The company is slated to report Q1 performance after the market closes on June 1st. This was a bit earlier than anticipated, which by itself seemed to excite the retail masses.

Of course, what happened on the heels of the fourth-quarter earnings release is still fresh in traders' minds. GameStop unveiled better than expected revenue of $2.25 billion and the stock ran more than $100 over the next seven days.

This time around the Street will be looking for roughly $1.3 billion in revenue in the non-holiday quarter, which would be a slight improvement over the prior year period. The net loss is expected to worsen as the company continues to spend handsomely on new platforms and marketing to reinvent itself.

As we learned last time around, the bottom line result will probably matter little. Signs of traction around the new strategy would theoretically carry some weight. But frankly, just the fact that the beloved GameStop has the stage may be all it takes to unleash more buying pressure.

Is GameStop Stock a Buy?

If you ask Wall Street research firms, GameStop is most certainly not a buy. Of the few remaining firms that cover it, most have sell ratings and targets well below the current price. The general opinion is that few stocks are as disconnected from the fundamentals as GameStop. As it began to rally last week, the analyst at Wedbush was quick to reiterate his "sell' rating and $30 price target.

Technical indicators, on the other hand, are looking more bullish. GameStop is rallying off a double bottom at the $80 level. Significant upside could be ahead if it is able to break through $160, which would disrupt the down trend that began in November 2021.

A high volume crossover of the 50-day moving average above the 200-day would also be constructive. If that happens, $200 likely won't be far behind. A move into the $300's or $400's seems unlikely at this point, but can't be ruled out with GameStop. It'll largely depend on how much the shorts care to get involved.

As usual though, the decision whether to buy GameStop is about the potential for WallStreetBets and other social media armies to get behind the stock and force a short squeeze. It's not out of the question with approximately 24% of the float held short and market sentiment improving in recent days.

Long-term investors that care about fundamentals best sit this one out. Social media traders remain firmly in control.