* Flurry of retail buying in Allbirds ( BIRD ) sets off new season

of meme stock buying

* Vanda Research says individual investors drawn to

Tesla, Palantir ( PLTR )

* Previous seasonal booms in meme stocks have failed to

deliver lasting gains

By Suzanne McGee

NEW YORK, April 17 (Reuters) - U.S. tax season is over,

but meme-stock season is just getting started.v

That is the view from Vanda Research, which tracks trading by

self-directed individual investors. The firm says it has spotted

the first signs of renewed enthusiasm for meme stocks -

companies whose shares surge on social media buzz and

speculative excitement rather than business fundamentals.

As investors become less preoccupied with the Middle Eastern

conflict "and this group of people can focus on what to do with

their tax refunds, we're starting to see some early indications

of another meme-stock summer," said Viraj Patel, global macro

strategist at Vanda.

Exhibit number one: Wednesday's eye-popping five-fold rally in

shares of Allbirds ( BIRD ) after the company formerly known for

its sneakers said it would reinvent itself as an artificial

intelligence computing infrastructure business.

Retail investors appeared to love the idea and the pending name

change of the company to NewBird AI. Even though the stock

relinquished some of its gains on Thursday, falling nearly 36%

to $10.91 a share, it remains well above its 52-week low of only

$2.15 a share.

Retail net buying of Allbirds ( BIRD ) shares on Wednesday hit a

record of $5.2 million, Vanda estimated, topping even the $5

million turnover seen on the day of its 2021 initial public

offering, when Allbirds' ( BIRD ) eco-friendly footwear fueled demand for

the stock.

"We've seen this playbook before - retail stepping in

aggressively when a 'non-tech' company pivots toward AI," Vanda

analysts said in a note on Thursday.

Patel said the signs of a broader meme-stock wave do not rest

on an outsized move in a single company. He pointed to

indications that retail investors are once again aggressively

buying long-standing favorite stocks, ranging from Tesla

and Palantir Technologies ( PLTR ) to quantum computing

firm IonQ ( IONQ ).

"These are retail favorites; meme stocks that capture the

imagination of the individual trader," Patel said.

MYSEUM SHARES SURGE

Another favorite this week was social networking firm Myseum

, whose shares rose 150% on Thursday after it announced

its own AI pivot.

A few months ago a short-lived favorite was Algorhythm Holdings ( RIME )

. The company, which just a year before was selling

karaoke machines under the name the Singing Machine Co, saw

shares briefly quadruple to $4 in February on its claim to

boost customers' freight volumes by 300% to 400% "without a

corresponding increase in operational headcount."

Meme stocks emerged as a market phenomenon during the early days

of the pandemic, when more investors stuck at home turned to

trading stocks to help fend off boredom and anxiety. But few

companies caught up in successive waves of speculation have

managed to hold onto those gains.

Shares of Opendoor Technologies ( OPEN ), one of last year's

crop of meme stocks, currently change hands at about $5.20 a

share, less than half of its 52-week high of $10.87. Beyond

Meat, which also had a moment in the meme trading spotlight, now

sees its shares languishing at only 79 cents each, down from a

52-week high of $7.69.

HOW MUCH FROTH?

The emergence of new meme stocks and firms advertising market

buzzwords often raises questions about market froth.

Allbirds' ( BIRD ) sudden rise and fall this week, for instance, prompted

some to recall the December 2017 near-tripling in shares of Long

Island Iced Tea when it announced its pivot to blockchain as

bitcoin prices hit new highs.

The company, renamed Long Blockchain, sold off its legacy

beverage assets in 2019 ​after bitcoin prices tumbled and it

received a delisting notice from Nasdaq.

For some investors, however, the current rally rests on a solid

backdrop of improving corporate profit expectations and a

persistent fear of missing out during a three-year-old bull

market.

"We are going to always see froth around the edges, and all

too often they coincide with market rallies," said Art Hogan,

market strategist at B. Riley Wealth. "There's a cohort of

investors who sadly always seem to want to chase the most

speculative names in the market."