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July 24, 2025: USA Shares of clothing retailer American Eagle Outfitters (NYSE: AEO) soared more than 9% in Thursday morning trading, propelled into the latest “meme stock” frenzy, largely thanks to the announcement of a new fall campaign featuring actress Sydney Sweeney.
The “Euphoria” and “Anybody But You” star will headline American Eagle’s upcoming campaign, focusing on denim jeans, the company announced on Wednesday. The collaboration has ignited significant interest among retail traders, who are increasingly drawn to stocks with high short interest and strong brand recognition.
American Eagle fits this profile perfectly, with over 13% of its tradable shares currently sold short, according to FactSet data (and Fintel reporting 13.45% as of June 30, 2025). This high short interest makes the stock a prime candidate for a “short squeeze,” where a surge in buying forces short sellers to cover their positions, further driving up the stock price. By Wednesday night, people were already talking about American Eagle on the prominent Reddit site “WallStreetBets.” This shows that more ordinary investors are paying attention.
The surge in American Eagle’s stock places it among a new wave of companies experiencing volatile trading this week due to meme stock activity. Wednesday was also a crazy day for trading in GoPro and Krispy Kreme, which had been the center of trade earlier in the week.
Jennifer Foyle, American Eagle’s President and Executive Creative Director, expressed enthusiasm for the partnership, stating, “With Sydney Sweeney front and center, she brings the allure.” She went on to say that the goal of the campaign is “the winning combo of ease, attitude, and a little mischief.” Sweeney’s campaign will specifically highlight American Eagle’s denim jeans, capitalizing on the growing preference for denim amidst a broader boom in Western styles.
Thursday’s impressive rally offers a much-needed reprieve for American Eagle’s stock, which had seen its shares tumble approximately 35% year-to-date through Wednesday’s close. While the celebrity endorsement and meme stock momentum provide a short-term boost, the long-term impact on the company’s fundamentals will be closely watched. The campaign, called “Sydney Sweeney Has Great Jeans,” is American Eagle’s “biggest fall campaign to date” and its first time working with a big-name celebrity at this level. It uses new media strategies like 3D billboards, Snapchat AR features, and custom “Sydney Jean” products, with all profits going to Crisis Text Line.