Robinhood Markets' commission-free trading platform has attracted millions of new investors and paved the way for its users to emerge as a market-moving powerhouse. While the platform is often associated with cryptocurrencies and popular meme stocks like GameStop and AMC Entertainment, that categorization doesn't fully reflect the reality of holdings among its members.
Robinhood users actually own a wide variety of different stocks, including blue-chip tech plays, companies that could benefit from emerging trends, and volatile meme stocks. Some of these will likely go on to record market-crushing gains. With that in mind, read on for a look at three popular stocks on the platform that could help take your portfolio to the next level.
Apple (AAPL -1.96%) is a blue-chip stock in the technology sector and ranked as the single most commonly held stock among Robinhood users at the beginning of September. The company has one of the most valuable brands in the tech sector, and it's leveraged this strength to command superior margins in the mobile hardware space.
Its software business is also growing at a rapid clip, with services including Apple Music delivering recurring subscription sales and commission revenue from third-party apps on its marketplace providing another high-margin revenue stream. Apple users spend significantly more on app purchases than their Android-using counterparts, and the company is on track to continue benefiting from the growth of the overall mobile software market.
In the consumer electronics and software spaces, Apple stands as one of the most likely beneficiaries of potentially revolutionary shifts, including augmented reality and the rollout of 5G network technology. The company also has sizable long-term growth opportunities in the smart home and wearable tech markets. The company's AirPods, in particular, have already proved to be a huge hit, and it's likely that Apple's brand power and design expertise will help it continue to capitalize on growth opportunities outside of its core mobile and computer hardware lines.
Apple stock even pays a dividend. While stellar gains for the company's share price have had the effect of depressing the company's yield, the tech giant has still managed to boost its payout by 132.5% since it began returning cash to shareholders in 2012. Apple's business is a cash machine, and it looks poised to continue serving up wins for long-term investors.
2. Palantir Technologies
Palantir Technologies (PLTR -1.22%) is a data analytics specialist with a tremendous runway for long-term growth. Its platforms are capable of integrating information from a wide array of disparate sources to generate actionable insights, and the company has already secured high-value customers, including the CIA, FBI, and multiple branches of the U.S. military.
Palantir reported blockbuster second-quarter results last month, and it looks like the business is poised for years of strong growth ahead. The company's revenue jumped roughly 49% year over year in Q2, and it managed to add 20 net new customers in the period. Thanks to strong momentum at the business and improving margins, the company doubled its full-year free cash flow (FCF) target and now expects to close the year posting more than $300 million in adjusted FCF.
While most of Palantir's business currently comes from government contracts, it's also making big progress in the private sector. Revenue from U.S.-based companies surged 90% year over year in the quarter, which suggests that businesses are rapidly getting on board with the company's Foundry data analytics system. Thanks to increasing adoption from government and enterprise customers, management expects that it will be able to grow sales at an annual rate of 30% through 2025.
Palantir's AI-powered platform should continue to get stronger and more capable as it encounters a wider variety of data and application cases, and that should help it cement and expand its leadership position in advanced analytics services. With the business already posting encouraging cash flow and growing revenue at a rapid clip, Palantir has the potential to be a huge winner.
It's no secret that the millennial and Generation Z age demographics love video games, so it shouldn't come as a surprise that Robinhood users have an interest in gaming stocks. Zynga (ZNGA) ranks as the most popular company in the category among users on the platform and the 50th most commonly held stock overall among its traders. With its strong collection of development studios and franchises, there's a lot to like about this industry leader.
While Robinhood investors are enthusiastic about the company's prospects, the overall market took a significantly less bullish stance following the release of the company's second-quarter results. Shares now trade down roughly 28.5% from their 52-week high.
Despite posting a strong performance in Q2, Zynga is seeing some weakening player engagement trends, and it lowered its full-year bookings guidance by about $100 million (a 3% drop). With performance often revolving around key releases and content updates, it's not unusual for video game companies to post uneven results, and Zynga is facing challenging growth comparisons after benefiting from peak social-distancing conditions last year.
Don't focus too much on near-term performance, however -- this mobile gaming leader is set up to go the distance. Valued at roughly $9.6 billion, Zynga could also be an attractive acquisition target for a larger video game company or a player in the broader technology and entertainment industries. If you're seeking ways to benefit from the growth of interactive entertainment, Zynga stock looks like a top way to win the game.