Tupac hologram is cool. Real profits are cooler.

NEW YORK (CNNMoney) -- I just might be crazy enough to shell out big bucks for a Led Zeppelin "reunion" show if Robert Plant, Jimmy Page and John Paul Jones were joined on stage by a hologram of the late John Bonham banging away on the drums during "Moby Dick."

But spending money to buy shares of Digital Domain, the company that is pioneering the use of virtual dead performers like Tupac Shakur in concerts? That's a different story.

Shares of Digital Domain (DDMG) have surged more than 50% since the company noted last month that its technology was used to "reunite" Tupac with Dr. Dre and Snoop Dogg during an appearance at the Coachella music festival.

The company, which went public last November but has been around since 1993, is a leader in visual effects and computer generated animation in movies. It won an Oscar for the special effects that reverse aged Brad Pitt's character in "The Curious Case of Benjamin Button."

Fans of the National League's New York baseball team, like my fellow assistant managing editor Mark Meinero, also know the company well since its technology is behind snazzy effects showing a futuristic Citi Field between innings at Mets home games.

Digital Domain held a conference call last week to discuss the potential use for more virtual entertainers. Company executives said that concerts in tourist destinations like Las Vegas, Broadway and Branson, Mo,. could make sense.

But investors who've rushed to buy the stock in the past few weeks need to be warned. The company conceded during last week's conference call that its overall revenue stream so far is relatively small since it has mainly been a company that is hired by Hollywood studios to do work on a contract basis.

Digital Domain is hoping that the virtual performer business will be extremely lucrative for the company since it will be able to receive a cut of ticket sales tied to these types of events.

The company also wants to produce its own movies based on its animation and effects. It's even partnering with Lionsgate (LGF), the studio behind "The Hunger Games," on a movie based on the popular sci-fi/fantasy novel "Ender's Game" by Orson Scott Card. That movie is set to be released in November 2013.

Tony Wible, an analyst with Janney Montgomery Scott, said investors should not be betting against Digital Domain. Wible, whose firm was not one of the underwriters of last year's IPO, pointed out that the recent run-up is warranted.

"The Tupac thing is just one spoke on a broader wheel. There will be tremendous demand for more content like that," he said. "Digital Domain is aiming to be the next Pixar. That may sound ambitious but they have a history of putting great special effects on the screen."

There is no denying that. Digital Domain's track record is impressive. And its technology is cool. But Digital Domain is not making money. It lost $140 million in 2011 up from a loss of $40 million in 2010. Analysts expect the company to lose nearly $40 million this year as well.

Nicholas Pollari, a hedge fund manager with NAP Investments LP, said that he thinks Digital Domain is a classic "story stock." Investors largely shunned the company following its IPO. It actually fell 16% on its first day but has gained momentum simply because of all the coverage of the Tupac hologram.

Pollari, who wrote a recent piece on investing blog Seeking Alpha about why he'd be wary of the company, said he is thinking of shorting the stock but has not yet done so.

He said one big cause for concern is the company's debt load, which was just shy of $60 million at the end of its most recent quarter. That's a pretty hefty burden for a company with a market value of just $318 million.

Digital Domain has taken steps to address this though, announcing Tuesday that it was raising new capital and refinancing existing debt by selling convertible note offerings to institutional investors.

But Pollari said that with the "Ender's Game" movie not due out until the end of 2013, that's a long time for investors to wait and hope for eventual profits.

"I don't think we will see DDMG turn any kind of decent profit for a while," Pollari said. "The only catalyst for this firm to make a solid profit lies in the 'Ender's Game' production."

And becoming the next Disney (DIS, Fortune 500) or Pixar is not going to be easy -- even when you have box office success. DreamWorks Animation (DWA) went public in 2004 at $28 a share and quickly rose to above $40. It trades for about $17 today -- despite a steady string of hits with its Shrek, Madagascar and Kung Fu Panda movies.

So Digital Domain just looks too risky right now as an investment. If you still want to buy, go ahead. To paraphrase one of Tupac's biggest hits, I won't be mad at cha.

But just remember that Wall Street won't accept a hologram of a profit. The earnings will have to be real.

Best of StockTwits: SodaStream (SODA) skeptics may still think it's a fad stock. But the company's latest earnings prove that it's not the Green Mountain (GMCR) of carbonated beverages just yet.

firstadopter: $SODA sodamaker units re-accelerated too. Nothing for the bears to grasp on. They are dead.

With shares surging 26% on the earnings beat and solid guidance, it does appear that the SODA shorts have been squeezed badly today. They have entered what Walter in "The Big Lebowski" would call a "world of pain."

But there are still many traders who think SODA is a carbonated bubble.

cheapsuits: The $SODA thing is fascinating. Just because it's in WMT doesn't mean its an instant hit. Have you been in a Walmart ?

JeffReevesIP: I have a pasta maker. Used it like 10 times. Why? Because pasta is 99 cents at Safeway. Same w/ $SODA. There's no savings, only foodie pride

mmdongare: $SODA Why does anyone want to make soda at home? great flavors from $KO and $PEP are available so cheap. Fad Stock.

This may all be true. I don't get the craze either. But the stock did get beaten up last week after Green Mountain's sales miss. That now looks like a big mistake. The two companies are quite different.

SODA doesn't have the same level of competition that Green Mountain does. And even after today's big surge, shares are still trading at just 23 times 2012 earnings estimates. That's not cheap but it's not necessarily frothy either.

The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, and Abbott Laboratories, La Monica does not own positions in any individual stocks.