A surprising boost from Capitol Hill testimony
Krispy Kreme (DNUT) shares surged briefly on Wednesday after an unlikely source gave them a glowing endorsement: FBI Director Kash Patel. Speaking before the House Judiciary Committee, Patel said that he believed Krispy Kreme was “a good investment.” His casual remark was enough to send shares of the doughnut chain soaring as much as 11.5% during the day before retreating to close up just 0.96%.
The sudden swing underscores how sensitive markets have become to hype, momentum, and viral commentary—even when the words come from a senior law enforcement official rather than a Wall Street analyst.
Patel’s comments spark a buying frenzy
During the hearing, Colorado Rep. Joe Neguse questioned Patel about his personal stock trading, specifically purchases of Krispy Kreme and semiconductor firm ON Semiconductor. Patel explained that he had been trading small amounts of stock before taking office and that he still follows certain industries.
“I just follow certain industries, and I thought they would be a good investment,” Patel said.
That was enough for traders watching the hearing to act. Within minutes, Krispy Kreme shares spiked, marking their strongest intraday rally in months. The excitement, however, faded almost as quickly as it appeared. By the close, most of the gains had evaporated, highlighting the speculative nature of the move.
A doughnut shop caught in the meme craze
The North Carolina–based company, founded in 1937, has had a rocky year on the market. Its stock is down nearly 70% in 2025, weighed down by slowing sales and investor doubts about its expansion strategy. Despite this, Krispy Kreme has occasionally been swept up in meme stock rallies—speculative surges fueled more by online chatter than company fundamentals.
One of its best days came on July 22, when shares rocketed more than 26% in a single session. Like Wednesday’s rally, that spike quickly fizzled. Analysts say Patel’s comments became the latest excuse for short-term traders to pile in, even though nothing changed in the company’s financial outlook.
Disclosures and ethics questions
Federal employees such as Patel are allowed to trade individual stocks, provided they follow ethics guidelines and disclosure rules. Patel’s filings with the Office of Government Ethics show that he purchased between $15,000 and $50,000 worth of Krispy Kreme shares on May 9. Since then, the stock has gained about 15%.
Patel also disclosed buying $50,000 to $100,000 in ON Semiconductor shares a few days later, which are up roughly 12%. He told lawmakers that he submits his purchases for review under Department of Justice guidance.
The timing of the purchases, and his testimony, come as Congress debates a bill that would ban members of Congress from trading stocks. Patel even said during his testimony that he would work with Rep. Neguse on the legislation.
Analysts see hype, not fundamentals
Market strategists were quick to downplay the rally. Steve Sosnick, chief strategist at Interactive Brokers, said the move showed how frothy and reaction-driven trading has become in 2025.
“It’s emblematic of the approach that a lot of speculators have to the market and how they will jump on any piece of positive-sounding news,” Sosnick said. “The rally basically faded almost as quickly as it started, because it was based really on not much.”
He added that while Krispy Kreme is more than just a meme stock, many traders are chasing headlines rather than making long-term investments.
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What it means for investors
For ordinary investors, the brief rally offers a cautionary tale. A passing remark from a public official can trigger a flood of trading activity, but such rallies are often unsustainable. Krispy Kreme’s stock remains deep in negative territory for the year, despite these occasional bursts of enthusiasm.
The episode highlights the blurred line between serious investing and meme-driven speculation. As Sosnick noted, “There’s a difference between investing and just sort of chasing stories, and this falls into the latter.”
