Robinhood has brought millions of new people into the world of investing. The commission-free trading platform's users have also emerged as a market-moving force in their own right, and some stocks favored by the its members have posted explosive gains in relatively short periods of time.
However, users on the platform aren't just trading in super-risky bets and meme stocks such as AMC Entertainment and GameStop. They're also investing in some high-quality businesses that look poised to deliver long-term success. You could say that Robinhood investors are interested in companies from "A to Z." With that in mind, let's take a look at two great Robinhood stocks that are worth buying this month.
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1. Amazon
While cases could be made for Apple, Alphabet, Facebook, and maybe a couple of others, Amazon (AMZN -1.64%) may be the single most influential company of the 21st century thus far. For starters, it more or less defined the modern e-commerce market. It then established and maintained a leading position in cloud infrastructure services, paving the way for the evolution of the modern internet.
Stellar successes in these two industries helped push Amazon's share price up by roughly 24,150% over the last two decades, and it currently stands as one of the most commonly held tech stocks in Robinhood investors' portfolios.
If you're worried that Amazon's growth potential is tapped out, you can probably set most of that concern aside. It's likely that it will continue to be one of the world's most successful and influential companies.
It has pursued an aggressive growth strategy to enhance its dominant position in e-commerce, and its scale and infrastructure advantages give it a formidable moat. E-commerce has grown at incredible rates over the last 20 years, but the industry still has plenty of room for further expansion, and it's a safe bet that Amazon will be one of the main facilitators and beneficiaries of that growth.
While the company is facing strong competition from Microsoft's Azure platform in the cloud services space, Amazon Web Services is also still putting up impressive growth and has a bright future. Revenue from AWS climbed 32% year over year in the first quarter to reach $13.5 billion, and the company continues to bring in major new customers and launch services in new markets.
Amazon is a well-run company with an incredible array of resources at its disposal, and these characteristics should help it continue to grow in markets beyond e-commerce and cloud services. Digital advertising is shaping up to be its next major growth engine, but it's likely that Amazon will continue to innovate and be a major player in a wide range of other influential new technology, media, and service trends. This business is built for the future.
2. Zynga
Long gone are the days when Zynga (ZNGA) depended on Facebook's portal for the vast majority of its revenue. Legacy video game franchises including Zynga Poker and Words With Friends are still drawing solid revenues after all these years, and it's even rolling out a new mobile-focused version of FarmVille this year -- but this is a drastically different company than it used to be. The video game publisher has carried out a major transformation over the last decade, and it has never looked stronger.
After pivoting from browser-based distribution to mobile app downloads, Zynga powered its big comeback with two core initiatives -- boosting profitability for its existing lineup with downloadable content updates, and using its cash reserves to acquire promising game development studios and properties. Zynga is the most commonly held video game publishing stock on Robinhood, and in my opinion, it's not hard to see why.
In addition to the possibility that it will keep its buying spree going, Zynga stands out as a potential acquisition target for a larger video game publisher. It could also get snatched up by a larger tech or media giant looking for exposure to the space. Gaming commands high levels of user engagement, and this has led to a hot market for developer and publisher buyouts. If market volatility punishes stock prices broadly, this dynamic may help set a floor under Zynga's valuation. But this company's future is promising regardless of whether it's acquired or remains independent.
Zynga has a strong collection of video game franchises and development studios, and it has a history of getting the most out of its hit titles. With the company valued at roughly $11.5 billion and trading at approximately 26.5 times this year's expected earnings, the stock has plenty of room for long-term upside.
