The popular online brokerage Robinhood Markets (HOOD -3.60%) pioneered commission-free trading, a move that greatly expanded access to retail investors and a trend that ultimately spread throughout the industry.
With stocks now easier to buy and with fewer associated fees, retail investors have become an influential part of the market, making up a larger portion of total flows than they once did. According to a retail investing report by the investing platform Public, retail investors accounted for a quarter of all equities trading volume in 2021, nearly double the percentage from a decade prior.
Robinhood regularly releases data on the most popular holdings on the platform, implying the highest conviction among retail investors. In this article, I'll take a look at the 10 hottest stocks on Robinhood as of June 2, along with assessments of which are the best and worst of the bunch.
The top 10
Robinhood created the Robinhood Investor Index to show which stocks investors on the platform have the highest conviction in. The information is likely helpful for the entire stock market because retail flows have become very influential.
Image source: Getty Images.
The index tracks the performance of the top 100 most-owned investments (in aggregate) on Robinhood. Investments that make the index are weighted by conviction, meaning Robinhood is looking at the percentage of each investment in portfolios. To ensure customers from all socioeconomic classes are represented, Robinhood takes the average conviction for each investment regardless of the size of their account.
Here are the top 10 most popular investments on Robinhood as of June 2:
1. Tesla (TSLA 0.04%)
2. Nvidia (NVDA 1.28%)
3. Apple (AAPL 0.53%)
4. Amazon (AMZN 1.62%)
5. Ford Motor Company (F 0.30%)
6. Microsoft (MSFT 1.58%)
7. Palantir Technologies (PLTR 1.62%)
8. GameStop (GME -1.42%)
9. Meta Platforms (META 0.73%)
10. Walt Disney (DIS 0.72%)
The worst of the bunch
In my mind, the worst of the top 10 stocks in the index is easily GameStop, but it also doesn't surprise me to see GameStop on this list. The meme-stock frenzy of 2020 and 2021 was heavily centered around GameStop and is likely part of the reason so many retail investors began investing in the first place. It likely got many people to invest for the first time, whether people were looking to strike it big or just join in the fun and have some skin in the game. Many investors who began with GameStop started on Robinhood and then kept their accounts active.
Despite its magical run during the pandemic, I see very little fundamental value in the stock. GameStop at its core is a video-game-centric, brick-and-mortar business, and retail foot traffic is not nearly as robust as it once was -- most people buy video games online now. While GameStop has shrunk its brick-and-mortar footprint and tried to ramp up other businesses like trading cards, revenue still fell meaningfully in the company's first fiscal quarter of 2025.
Recently, GameStop took a page out of MicroStrategy's playbook and began issuing debt that it can use the proceeds from to buy Bitcoin. However, I'm not convinced this will save the day because several companies are now using this strategy. How will GameStop ultimately differentiate itself? This strategy also essentially turns companies into a levered play on Bitcoin, which I think is too risky for most investors to engage in.
The best of the bunch
There are several good stocks investors can buy from Robinhood's top 10. However, right now, I think Microsoft is the best of the bunch.
Microsoft is a highly diversified tech conglomerate that now has many tremendous businesses under its umbrella, including its Azure and cloud business, gaming, its suite of office products that power the business world, and exposure to social media through LinkedIn.
Microsoft is well-positioned to take advantage of artificial intelligence (AI). Azure and other cloud-services revenue grew 35% year over year in the company's third quarter of its fiscal year 2025. Azure provides many services. Its global network of data services allows businesses to store data in the cloud. Additionally, Azure offers thousands of AI language learning models (LLMs) businesses can use to build and run AI solutions and applications.
Wedbush analyst Dan Ives, in a recent research note on the stock, said Microsoft is "playing chess, and others are playing checkers." Ives thinks Microsoft is about to see a massive wave of adoption and monetization of its Azure AI services by customers. Ives raised his price target on Microsoft to $600, implying 22% upside from current levels (as of June 26). That would make Microsoft a $5 trillion company.
Another factor that makes Microsoft a buy is the fact that it is one of two companies with a higher credit rating than the U.S. government.
