GameStop's stock has been on a rollercoaster ride, surging nearly 300% from its year-to-date low, with a 50% jump in premarket trading on Tuesday alone. This sudden spike has sparked concerns among analysts, with Cole Smead, CEO of Smead Capital Management, likening the rally to gambling and warning that it's not backed by fundamentals.

Smead expressed his disapproval of the rally, stating that people engaging in this frenzy are doing something "frankly stupid." He emphasized that investing in GameStop without considering its fundamentals is akin to gambling. The company's quarterly sales have taken a 20% hit, and its per-share earnings missed Street estimates by a significant margin.

Despite the excitement, Wedbush Securities analyst Michael Pachter predicts a potential downside of $5.0 per share, indicating a possible 90% decline from current levels. This stark warning suggests that the rally may be short-lived, and investors should exercise caution.

The resurgence of the meme stock craze, inspired by "Roaring Kitty" and Keith Gill has driven the rally. However, it's crucial to remember that fundamentals should guide investment decisions, not speculation or hype. As the situation evolves, investors are advised to keep a close eye on developments and consider expert opinions before making any moves.