As of this writing, the latest meme stock rally in ContextLogic (NASDAQ:WISH) stock appears to be running out of gas.

Starting June 1, this favorite of Reddit’s r/WallStreetBets subreddit, zoomed from $7.74 per share, to prices topping $15 per share.

But, after falling to $14.93 on June 29, it may be losing momentum, as traders that got in early cash out, instead of holding onto it with “diamond hands.” It will open today at around $13.17.

Yet, many still believe it has a shot of joining the ranks of AMC Entertainment (NYSE:AMC) and GameStop (NYSE:GME). That is, become a “meme stock” that delivers, and sustains, jaw-dropping returns.

Is this all built on hope, or is there data pointing to this happening? As InvestorPlace’s Chris MacDonald wrote, it had 15% short interest as of that day.

Short volume data may indicate this percentage has gone up in subsequent trading days. The company’s prospects appear lukewarm at best. Mainly due to its guidance pointing to considerably lower levels of sales growth in the quarters ahead.

Yet, if the AMC and GameStop sagas have shown, it’s hype, momentum, and FOMO that drive meme stocks, not fundamentals.

If the Reddit set can generate enough interest from retail traders who missed out on prior waves and want their piece of the action, they may be able to send this to the moon.

But, given how quickly other recent targets of the Reddit trader army, like Clean Energy Fuels (NASDAQ:CLNE), and Clover Health (NASDAQ:CLOV), have run out of gas, this one may fail to launch as well.

WISH Stock Isn’t the Next AMC or GME

The argument whether ContextLogic shares can get squeezed like AMC or GameStop is not a complicated one.

Either retail traders pile in en masse, leaving short-sellers scrambling to cover their positions (at much higher prices) or, the shorts approach the situation with squeeze risk in mind, and the intention to wait for the speculators to blink first.

If the longs do blink first, it won’t be long before shares fall back down to earth.

Sure, you can dive into fundamentals, and argue why WISH stock has room to soar up to $20, $25, or even to its all-time high of $32.85 per share.

For example, InvestorPlace’s David Moadel recently laid out the case why it has more than meme stock status on its side. Much of the negativity around this stock is focused around the underwhelming guidance mentioned above.

But, as Moadel pointed out, slowing growth in the coming quarter doesn’t mean it’s permanently off the growth train. Things could pick up once again in subsequent quarters, helping to justify a move back to its prior price levels. Yet, while this is a possibility, it’ll likely not play out for several months.

In the meantime, it’s all up to the Reddit set to send it higher. But, the way things are playing out in similar names, chances are it’s going to head lower.

Similar to Other Waning Squeeze Plays

With the exception of AMC, the other meme stocks that popped a few weeks back have started to trend downward.

These include two I mentioned above, CLNE and CLOV, along with favorites from past meme stock waves, like Blackberry (NYSE:BB) and Bed, Bath, and Beyond (NASDAQ:BBBY).

This signals to me that this latest wave has run out of gas, and that WISH stock will continue pulling back along with the rest.

There’s not much that differentiates this would-be squeeze play from the rest of the pack. Yes, it may have exposure to a long-term megatrend (e-commerce), but, so does CLNE stock (renewable energy).

Its short interest may be trending higher, but plenty of meme stocks, including CLOV, already have much higher levels of short interest. This hasn’t prevented their rallies from running out of momentum.

This particular short-squeeze situation may be grabbing more headlines. Yet, there’s little you can point to that says that the attempted squeeze here will play out on a level on par with AMC and GameStop.

The Bottom Line

The slowing growth this company’s e-commerce platform is set to experience could prove to be a short-term hiccup in hindsight.

Several quarters from now, it could be firmly back on the growth train. This may pave the way for it to pull off a rebound, but in terms of its potential to get memed to the moon in the near-term? All bets are off.

More likely than not, WISH stock will follow the lead of other aspiring short-squeeze plays. In other words, it will drift its way back to single-digit price levels.

On the date of publication, Thomas Niel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Thomas Niel, a contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.