Though online trading was possible for institutional investors in the 1980s, it wasn't until the proliferation of the internet in the mid-1990s that the ability to buy and sell stocks became commonplace for everyday investors.
While institutional investing, which includes high-frequency trading, still accounts for a majority of trading activity on Wall Street, retail investors are becoming an increasingly larger piece of the pie -- and brokerages have taken notice.
Among the long list of online brokerages, none has catered to the retail investing crowd quite like Robinhood. The ability to make fractional-share purchases, buy stocks with no commission fees, and receive free shares of stock upon signing up for and funding an account, have made Robinhood particularly popular among retail investors.
Image source: Getty Images.
But one of the most intriguing aspects of Robinhood's platform is its "100 Most Popular" list, which details which stocks and exchange-traded funds (ETFs) are most commonly held by Robinhood customers. It's a regularly updated melting pot of retail investor thoughts and emotions.
Although tech stocks Apple (AAPL 0.18%) and Nvidia (NVDA 0.29%) once topped the pedestal as respective No. 1 holdings on Robinhood, they've both been supplanted by a brand-name artificial intelligence (AI) stock that's expected to increase in value by 646% over the next four years, according to a well-known fund manager.
Apple and Nvidia are no longer the top holding for Robinhood's retail investors
It's not hard to understand why Apple and Nvidia once topped the ranks on Robinhood.
Apple has been on the leading edge of the innovative curve for more than a decade. The company's iPhone revolutionized smartphones, with iPad, Mac, and Apple Watch also in high demand and resonating with consumers.
Apple also boasts the largest share-repurchase program on the planet among public companies. Since 2013, Apple has bought back approximately $775 billion worth of its common stock, which works out to more than 43% of its outstanding shares. Aggressively buying back its stock has provided a lift to its earnings per share (EPS) and made its stock more attractive to value-focused investors, like billionaire Warren Buffett.
Meanwhile, Nvidia established itself as the face of the AI revolution. Its Hopper (H100) and successor Blackwell graphics processing units (GPUs) make up the bulk of GPUs currently deployed in AI-accelerated data centers. With demand for Nvidia's hardware outpacing supply, the company has been able to charge a premium for its GPUs and meaningfully boost its gross margin.
Nvidia can't be topped in the AI-GPU innovation column, either. CEO Jensen Huang is overseeing an ambitious plan to bring a new advanced chip to market each year. This implies Nvidia won't have any trouble maintaining its compute advantages over direct rivals.
But there are also clear reasons for Apple and Nvidia to fall to the respective No. 2 and No. 3 spots on Robinhood's "100 Most Popular" list, as of this writing on June 23.
For Apple, it's the company's lack of growth. Between fiscal 2022 and fiscal 2024 (Apple's fiscal year ends in late September), Apple's net income fell from $99.8 billon to $93.7 billion, with net sales meandering lower from $394.3 billion to $391 billion. Even though the company is still a cash cow, its physical product sales have declined and there's not been much in the way of innovative momentum.
Nvidia has potential red flags, too. Aside from increasing external and internal competition, as well as export restrictions to China, which is a key customer for Nvidia, the company is contending with historical precedent. Every next-big-thing technology for more than three decades (which includes the internet) has endured a bubble-bursting event. Nothing suggests AI will be an exception to this unwritten rule, which bodes poorly for Nvidia.
Image source: Tesla.
Retail investors' favorite stock on Robinhood is an industry leader
The brand-name artificial intelligence stock that's blown past Apple and Nvidia to become the most widely held of all securities on Robinhood is none other than electric-vehicle (EV) maker Tesla (TSLA 0.95%). This is a stock that Ark Invest's Cathie Wood believes will reach $2,600 per share by 2029, which would place its upside at a cool 646%, based on its closing price of $348.68 per share on June 23.
Wood became a popular money manager to follow during the COVID-19 pandemic, with the Ark Innovation ETF more than quadrupling in value between the March 2020 lows and its peak during January 2021.
Cathie Wood's upside thesis on Tesla revolves around big-time growth in the company's Ai-driven robotaxi operations. By 2029, Ark Invest believes 63% of the company's estimated $1.2 trillion in annual sales will come from robotaxis, with 86% of earnings before interest, taxes, depreciation, and amortization (EBITDA) attributable to robotaxis.
Beyond Wood's lofty price target, retail investors also seem to appreciate Tesla's push to become more than just an EV company. Over the trailing four quarters (ended March 31, 2025), it's generated close to $11.2 billion in sales from energy generation and storage. This segment should help to minimize the cyclical ebbs and flows that come with being an auto stock.
Furthermore, Tesla shareholders tend to believe in CEO Elon Musk's vision. Though Musk is anything but conventional, he's brought multiple EVs to market, pivoted Tesla toward energy products, helped deliver five years of recurring profits, and is overseeing the launch of his company's robotaxi service in Austin, Texas.
However, the No. 1 holding of retail investors on Robinhood is anything but a slam-dunk investment.
One of the primary issues with Tesla and its CEO is that there's a heavy emphasis on promises and innovation and very little in the way of actual execution. For example, Musk has been promising Level 5 autonomy "next year" for 11 straight years, yet his company hasn't moved past Level 2 autonomy. Additionally, Tesla's robotaxi service is limited to just 10 vehicles and is being geofenced to a small area in Austin since its technology remains unproven.
Beyond promises not kept, Tesla's vehicle margin has plummeted as competition has picked up. Musk has previously noted that his EVs are priced according to consumer demand. With more than a half-dozen sweeping price cuts on Model's 3, S, X, and Y over the last two years, it's evident Tesla's first-mover advantages are waning.
There's also a valuation argument that suggests Tesla stock can plunge. Whereas most auto stocks trade at high-single-digit forward-earnings multiples, Musk's company is valued at 121 times estimated EPS in 2026. Even though Tesla's EPS is on track to have declined by 39% (based on estimates) from 2022 through 2026, its shares are up 183% since the end of 2022. This makes no sense whatsoever and suggests Tesla stock has become widely detached from its underlying operating performance. Rarely do these detachments last for extended periods.
