Why Krispy Kreme Stock Is Plummeting Today

Key Points

• Krispy Kreme's meme-stock momentum has continued to fade in today's trading.

• Krispy Kreme and other meme stocks are losing ground in conjunction with expectations that the Federal Reserve won't cut interest rates this week.

• The doughnut specialist's valuation is still up big over the last month, but its gains look disconnected from the company's fundamentals.

• 10 stocks we like better than Krispy Kreme ›

Krispy Kreme (NASDAQ: DNUT) stock is sinking in Tuesday's trading. The company's share price was down 8.8% as of 2 p.m. ET, and the S&P 500 (SNPINDEX: ^GSPC) and the Nasdaq Composite (NASDAQINDEX: ^IXIC) were down 0.3% and 0.2%, respectively, at the same point in the session. Krispy Kreme stock had been down as much as 10% earlier today.

There isn't any business-specific news driving Krispy Kreme's valuation lower today, but the pullback comes on the heels of big valuation gains that were also disconnected from the company's fundamentals and outlook. Krispy Kreme gained attention as a meme stock trade earlier this month, but that momentum has been fading in recent trading.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Image source: Getty Images.

Krispy Kreme sinks as meme stock trade loses momentum

Krispy Kreme's valuation is quickly heading lower today as investors are now betting that the Federal Reserve will not cut interest rates this week. Investors are still broadly betting that the central banking authority will cut rates multiple times this year, but early reports and coverage now suggest that the Fed will keep rates at their current levels with its meeting this week. Krispy Kreme and a handful of other new meme stocks had seen big gains recently, and the possibility of a rate cut this month was a key driver in their valuation gains.

What's next for Krispy Kreme?

Despite a big pullback in recent trading sessions, Krispy Kreme stock is still up roughly 41.5% over the last month -- with most of its gains driven by meme stock-related trading. If the Fed announces that it's not cutting interest rates this week, the company's share price could see more big pullbacks. While it's possible that Krispy Kreme will see a resurgence of meme-stock momentum, the stock looks too risky to be a good buy for most investors right now.

Should you invest $1,000 in Krispy Kreme right now?

Before you buy stock in Krispy Kreme, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Krispy Kreme wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $633,452!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,083,392!*

Now, it’s worth noting Stock Advisor’s total average return is 1,046% — a market-crushing outperformance compared to 183% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 29, 2025

Keith Noonan 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.