• "It is gambling," fund manager Cole Smead said Tuesday of the reignited meme stock craze.
• In premarket trading on Tuesday, shares in GameStop and AMC were up 47% and 51% respectively at 6 a.m. E.T.
• The jump was seemingly prompted by a post on social media platform X by "Roaring Kitty," who in 2021 encouraged an army of day traders to pile into GameStop.

Fund manager Cole Smead has described the meme stock craze as "frankly stupid," as day traders once again pile into GameStop and AMC.

"It is gambling," he said Tuesday on CNBC's "Street Signs Europe." Smead is the CEO of Smead Capital Management which has around $6 billion of assets under management.

"You've got to remember these are young people, these are forty-year-old people like me, who are going out and doing stuff that is just frankly stupid," he added.

Brick-and-mortar video game retailer GameStop saw a huge rally on Monday, with shares soaring over 74%. Movie theatre chain AMC was also drawn into Monday's trading frenzy, jumping over 78%.

The jump was seemingly prompted by a post on social media platform X by "Roaring Kitty," who in 2021 encouraged an army of day traders to pile into GameStop. Roaring Kitty, whose legal name is Keith Gill and is also known as DeepF------Value on Reddit, is a former marketer for Massachusetts Mutual Life Insurance.

In premarket trading on Tuesday, shares in GameStop and AMC were up 47% and 51% respectively at 6 a.m. E.T.

Quoting "the late, great Charlie Munger," Smead said the day traders were "just taking in rat poison."

Munger, who passed away last year, was the vice chairman of Berkshire Hathaway and famously described cryptocurrency as "rat poison."

— CNBC's Yun Li and Fred Imbert contributed to this report.