The recent surge in meme stocks has investors on the edge, with many looking for a less volatile way to capitalize on the trend.

What Happened: Investors are exploring alternative ways to profit from meme stocks, such as those popularized by Reddit and X, formerly known as Twitter. These stocks, often linked to social media platforms, have attracted retail investors seeking quick returns, reported CNBC.

Hannah Gooch-Peters, a global equity investment analyst at Sanlam Investments, suggests a less risky approach. She advises investors to consider the exchanges themselves, citing Intercontinental Exchange (NYSE:ICE) as an example. ICE, which owns the New York Stock Exchange and several other exchanges, generates revenue from every trade at its venues.

Despite the recent surge in meme stock trading, Gerry Fowler, chief European equity strategist at UBS, warns that the market structure has changed significantly. Quantitative funds play a more significant role in daily fluctuations, which puts retail investors at a disadvantage when trading.

"If you want to compound your wealth over the long term, look out over five to 10 years. And I think that really is the sweet spot," he said.

Why It Matters: The meme stock phenomenon has been a topic of interest in the financial world for some time. In a recent article, Jim Cramer suggested that Affirm Holdings Inc (NASDAQ:AFRM) was experiencing a similar surge driven by retail investors. This trend has continued into 2024, with the resurgence of meme stocks such as Reddit and Truth Social.

Meanwhile, Gooch-Peters recently drew attention to payments firm Visa (NYSE:V) with profit margins comparable to those of NVIDIA Corp (NASDAQ:NVDA) but considered a more sustainable investment. This suggests that there are alternative investment opportunities beyond the meme stock trend.

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