Retail investors have become a force to reckon with. They're not only investing more money than ever before, but also at younger ages. A JPMorgan Chase report last year found that 37% of people aged 25 had made investment transfers from their checking accounts since they were 22. That number was a mere 6% in 2015.
Retail investors have also become much more sophisticated. Given all of these factors, the market is interested in retail sentiment. One area to examine such sentiment is on Robinhood, an online retail brokerage that pioneered commission-free trading and is viewed as the go-to place for retail investors. Robinhood maintains a list of the 100 most-owned stocks on the platform.
Here are the 10 most-owned stocks on the platform, along with the two best investments in this group.
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The 10 most-owned stocks on Robinhood
Based on Robinhood's most-owned stocks, retail investors appear to be heavily interested in the stocks commonly found in the broader S&P 500 index, a market cap-weighted index of large-cap stocks across various sectors. Most of the most popular names on Robinhood are large tech companies slated to benefit immensely from artificial intelligence (AI). These names have dominated the news cycle and conversations about the stock market.
Here are the top 10 most-owned stocks on Robinhood, which do not include popular exchange-traded funds on the platform:
- Nvidia
- Apple
- Tesla
- Amazon
- Microsoft
- AMC Entertainment
- Ford Motor Company
- Meta Platforms
- Alphabet (Class A)
- Netflix
As you can see, most of these names above are a part of the "Magnificent Seven" and have seen their stock prices shoot higher in recent years. Interestingly, there are a few outliers. For instance, the movie theater company AMC rose to prominence during the pandemic's meme-stock craze and has maintained its popularity despite struggles in the traditional movie theater business.
Ford is also not an AI company. The stock has been volatile as the company has attempted to develop electric vehicles and as it has dealt with challenges associated with President Donald Trump's tariffs. Part of the company's appeal could be its attractive dividend yield of nearly 4.4%.
The two best of the bunch
Several stocks in this group would make for good investments, but the two best right now are Amazon and Microsoft.
Amazon struggled last year, largely due to tariffs. A large portion of products sold on the company's e-commerce platform are sourced from abroad, while many of Amazon's third-party sellers are also based abroad, particularly in China. However, the company has developed one of the largest and best supply chains and logistics networks in the world, capable of delivering just about any product to a consumer's door within a few days.
NASDAQ: AMZN
Key Data Points
Amazon is also immensely valuable to consumers, as it provides online grocery delivery, a video streaming platform, and health services, among other features. Amazon has also invested heavily in robotics and is expected to benefit tremendously from integrating robotics into its warehouses. Finally, the company has one of the strongest cloud businesses in the world, which should also benefit from artificial intelligence.
Microsoft is also a phenomenal company that has significant revenue diversity within the tech space, whether it's through its cloud services, Microsoft 365, gaming products, including Xbox, or its LinkedIn social media platform, among other products and services.
NASDAQ: MSFT
Key Data Points
The company is expected to benefit immensely from AI, whether by helping companies run AI applications in the cloud or by integrating AI into the tools and services that the business world relies on every day. Microsoft is also one of two companies in the market with a better credit rating than the U.S. government.
The other thing about Microsoft and Amazon that makes them strong investments is that while AI is expected to be a big part of each company's future growth, neither company is a 100% bet on AI. Sure, if AI hits a wall or the sector struggles, their stocks will take a hit. But these companies also have other mature businesses and the resources to navigate such a situation and rebound in the long term.
