Sydney Sweeney reacts to Trump praise on viral AEO jeans ad that sent stock soaring 25%. Should you invest in virality?

In a recent GQ interview, the Euphoria and The White Lotus star downplayed the backlash. When asked about Trump’s Truth Social praise of her ad — which amplified the campaign's reach — Sweeney called it “surreal,” adding that she “didn’t really see a lot of” the controversy because she was filming 16-hour days on Euphoria’s third season (1).

Following the campaign, American Eagle stock surged 25% after hours on the Q2 earnings report (2). The company says its marketing campaigns with both Sweeney and Kansas City Chiefs’ tight end Travis Kelce brought in 700,000 new customers — and a signature pair of jeans worn by Sweeney sold out in one week (3).

But, while the company’s stock price jumped, its longer-term outlook is unclear. Here’s what to know about investing in virality.

Is viral success fleeting?

While celebrity endorsements can generate online buzz, the question is whether that buzz can translate into long-term, sustainable growth for a brand.

Before the July campaign launch, American Eagle stock was languishing near $10, down over 40% from its yearly high. The company’s Q2 earnings revealed the Sweeney effect: revenue hit $1.28 billion with earnings outperforming analyst estimates at $0.45 per share versus the expected $0.20 (4).

Sweeney told GQ she was “aware of the numbers” throughout the controversy, noting that negative headlines about declining store visits “was all just a lot of talk.”

But foot traffic in stores — and impressions on social media — don’t always translate into sales. The real test will be whether American Eagle’s 700,000 new customers stick around for holiday shopping or if this was just another fleeting social media moment.

There’s a term for that: a ‘meme stock’ goes viral based on social media hype, rather than strong fundamentals like consistent revenue growth (5). A meme stock may appear to promise big returns, but there’s no telling when a skyrocketing stock price will plummet.

While the Sweeney campaign bumped American Eagle back into the spotlight — and bumped its stock price — the retailer still isn’t seeing the highs it saw back in 2021 (or way back in early 2007) (6).

Plus, there’s no guarantee that virality pays off when it comes to the bottom line. Gap’s “Better in Denim” campaign was considered hugely successful, receiving 20 million views in three days and at one point topping TikTok’s search rankings. But Gap’s Q2 net sales remained flat (7).

In other words, there’s no guarantee that viral success — or controversy — will translate into actual foot traffic data, let alone long-term growth.

Should you invest in virality?

Buying stock based on celebrity endorsements or social media hype is generally considered high risk, and stocks that rapidly surge in popularity over a viral moment can just as quickly be followed by a crash or pullback.

“Because investors react emotionally rather than logically to social media-driven narratives, these psychological impacts can lead to impulsive and ill-considered financial decisions,” writes Jim Osman for Nasdaq. (8)

When it comes to American Eagle, Seeking Alpha analyst Alan Galecki says “the initial hype and the stock’s massive 25% pop post earnings have reversed,” and he rates AEO stock a “sell” due to “weak fundamentals and an overvalued stock price despite recent marketing-driven hype (9).”