Investing platform Robinhood (HOOD 1.75%) surged in popularity during the COVID-19 pandemic, as people turned to investing with the "extra" cash they had due to stimulus checks while not spending it on other discretionary activities.
It hasn't all been smooth sailing for Robinhood since its July 2021 initial public offering (IPO), but the stock has flourished over the past 12 months, up over 417% (as of Sept. 15). Despite this recent run, Robinhood is still one of the best financial stocks you can own, and it comes down to one generation: Gen Z (people born between 1997 and 2021). It's a generation that's investing at a younger age than any other generation.
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Where Robinhood's appeal lies
There are dozens of brokerage platforms to choose from, but Robinhood's main appeal has been its ease of use and accessibility. The game-like nature of its app has been a hit among younger investors (for better or worse), with analytics company Comscore noting that 33% of 18-to-34-year-old brokerage shoppers currently have a Robinhood account, versus 18% overall.
At the end of 2024, Robinhood reported that 75% of its customers were millennials or Gen Z, and a Nasdaq investor retail investor survey noted that Gen Z's use of Robinhood contributed to an overall increase of 39% in its use from 2022 to mid-2024.
Robinhood doesn't have the same breadth of investment products and services as other traditional brokerage platforms like Fidelity, Charles Schwab, E*Trade, and the like. However, it does have the attention of younger investors, which could help build lifelong customer relations.
If you invest in Robinhood today, it should be with the long term in mind, banking on the company being the go-to for younger investors as they mature and the company expands its offerings.
