AMC Entertainment (NYSE:AMC) is the largest movie theatre chain in the United States. This stock attracted considerable attention as part of the GameStop short squeeze craze in the beginning of 2021. Since that spike, the stock has declined steadily. However, investors have the right to be optimistic in 2023, and not because of a potential short squeeze.
Shares of AMC have jumped 2.4% month-over-month as of close on Thursday, July 27. Meanwhile, its shares have climbed 15% so far in 2023. The traditional cinema was left for dead by some analysts and onlookers at the peak of the COVID-19 pandemic. This sector did take major lumps to start this decade, but there are already signs of a strong rebound.
The rise of Netflix rightfully spooked the traditional cinema space in the previous decade. However, the streaming space has increasingly become overcrowded, and the largest players are struggling to squeeze profits out of this relatively new system. Worse yet, customer enthusiasm has waned as many of these entities have failed to hit a home run in terms of their content. Meanwhile, the cinema just experienced one of the biggest weekends in years.
Barbie and Oppenheimer, two films that could not differ more in terms of their tone, proved to be massive draws on their opening weekend. Barbie has already raked in over US$230 million at the domestic box office. Meanwhile, Oppenheimer has pulled in over US$115 million, an impressive feat in the present-day for a three-hour historical epic.
AMC managed to beat expectations in the first quarter of fiscal 2023. The recent box office momentum bodes well for its prospects for the rest of the year. AMC looks like a solid contrarian pick as we look ahead to August.
