The 10 Most-Held Stocks on Robinhood

Robinhood has taken the investing world by storm. Its combination of no-commission trades and easy-to-use mobile app has made it the de facto brokerage among millennials, giving it a brand power in investing that is unmatched with the youngest generation.

Other brokerages have been forced to play catch-up, following Robinhood by offering free trading, but the disrupter continues to make gains. It added millions of new accounts last year, with 3 million in the first quarter alone. In its most recent year, Robinhood was valued at $11.2 billion, and it's reportedly preparing for an IPO this year.

As mostly millennials, Robinhood investors tend to have different investing styles from other investors, and unlike most brokerages, Robinhood discloses the popular stocks on its platform.

Keep reading to see our countdown of the 10 most-held stocks on Robinhood.

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We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

Microsoft (NASDAQ: MSFT) deserves a spot in almost any portfolio, whether it’s for growth, safety, or income, so it shouldn’t be a surprise to see the enterprise software king among the top Robinhood stocks.

Microsoft has been a beast in recent years, under the leadership of CEO Satya Nadella, who has reinvented the stodgy tech company by focusing on cloud computing with Azure, making the company’s popular office apps available on Apple and Android platforms, and piloting bolt-on acquisitions like LinkedIn and GitHub that play to the company’s strengths in enterprise tech.

As a result, the stock has nearly tripled over the last three years, showing Microsoft has clearly escaped its prior reputation as a company that could no longer innovate.

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After GameStop’s (NYSE: GME) record rip over the last month, it makes sense that the video game retailer is among the most widely held stocks on Robinhood. After all, the unprecedented short squeeze was driven largely by traders on Reddit and Robinhood.

Unfortunately, with the stock down more than 80% from its peak on Jan. 28, it looks like most of GameStop’s current shareholders have been left holding the bag.

While the short-squeeze play was a brilliant move, especially with more than 100% of the float sold short, at this point the retailer looks like overvalued, and the business still faces a number of challenges including the transition of video games from cartridges to digital downloads, which threatens the company’s entire business model.

Robinhood famously gives new traders a free share of stock, and those stocks naturally tend to be low-priced shares. Ford Motor Company (NYSE: F) fits the bill for a free Robinhood stock as the auto stock has been trading in the single digits for most of the last three years.

As a big-brand, consumer-facing company, Ford is also typical of the kind of stock that novice investors gravitate to. Its business is relatively easy to understand, and its low share price makes it seem cheap, though share price actually has nothing to do with a stock’s valuation.

Ford stock has surged in recent months as auto demand has spiked because of the pandemic, with more Americans looking for their own set of wheels as alternatives like public transportation have become less appealing.

In its fourth-quarter earnings report, the company sprinted past estimates after adjusted earnings per share nearly tripled and it announced $29 billion in planned investments in autonomous and electric vehicles, staking a claim to the fastest-growing segments of the auto industry. While Ford still faces structural problems in international markets, especially South America, tying its future to electric and autonomous vehicles is a smart move for the company.

Like Ford, General Electric (NYSE: GE) has also been trading in single digits for most of its recent history, and it’s another commonly awarded free stock on Robinhood.

The conglomerate that was the most valuable company in the country not too long ago now seems to be in perpetual turnaround mode.

For years, the company has been plagued by mismanagement, as well as accounting obfuscations making it difficult for investors, and even the company, to adequately assess its performance. Meanwhile, its core power generation business has struggled for years, though it was able to post positive free cash flow in 2020.

In recent months, GE shares have soared thanks to improving free cash flow, along with enthusiasm for the economic reopening when the pandemic ends.

Still, given the company’s recent struggles, hopes for a full-fledged turnaround may be premature.

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Canadian marijuana grower Sundial Growers (NASDAQ: SNDL) is another stock that’s caught fire with the WallStreetBets crowd in recent weeks. The pot stock has been trading in penny stock range, and its low price tag and high short interest made it attractive to those traders as the stock got a boost from a short squeeze. Shares have more than doubled on high-volume trading this year, jumping 50% on Feb. 1 alone, and about 15% of the stock is sold short.

The attention it’s getting on Robinhood is likely further evidence of a short squeeze or that the stock is being pumped up by newbie traders.

Like other marijuana growers, Sundial is deeply unprofitable as it’s burned through 50 million Canadian dollars ($39.3 million) in the first three quarters. Still, the company is growing fast and wisely took advantage of the recent spike in its share price to sell new stock, raising US$175 million in cash. Though that will dilute current shareholders, it alleviates concerns about cash burn, at least through the near term.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

Electric vehicle (EV) stocks have been popular among the Robinhood set, so it’s not surprising to find NIO (NASDAQ: NIO) on the list. Its shares skyrocketed last year, jumping more than 1,000% in 2020 as the EV industry hit a tipping point and as NIO’s own sales accelerated. For 2020, vehicle deliveries more than doubled 112.6% to 43,728. About 40% of those sales came in the fourth quarter, indicating vehicle sales accelerating through the year and recovering strongly from the COVID-19 pandemic. The company’s profitability is also improving as it’s now posted positive operating cash flow for two straight quarters, though it’s still unprofitable on a generally accepted accounting principles (GAAP) basis.

NIO also has a larger market cap than General Motors or Ford, automakers that produce millions of cars a year, compared with just thousands for NIO. That seems like an imbalance that will eventually be corrected. Either traditional automaker valuations will rise as they pivot to EVs or NIO’s will pull back.

Nokia (NASDAQ: NOK), the broadband and telephony company that was once the leading handset maker in the pre-iPhone era, has suddenly been surging, targeted by the WallStreetBets crowd.

While only a slim percentage of Nokia’s shares are sold short, as a foreign company Nokia trades in the U.S. based on American depositary receipts, giving it a lower float than a typical domestic stock would have. That made the stock ripe for the same kind of “squeeze” that took place with the heavily shorted stocks. Nokia shares jumped as much as 107% on Jan. 27 before giving back much of those gains, as it was one of several stocks on which Robinhood restricted trading.

Currently, Nokia shares are barely unchanged year to date, though their popularity on Robinhood indicated that traders are still bullish on the stock.

The company’s fourth-quarter report also threw cold water on that rally in the first week of February, as it reported a decline in revenue in the fourth quarter and called for a decline in 2021 as well. With the spike in Nokia having come and gone, Robinhood traders may start to rotate out of the stock now.

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Tesla (NASDAQ: TSLA) has long been popular among growth stock investors and the younger, risk-seeking investors that tend to trade on Robinhood.

Tesla, of course, has been a big winner recently, with the stock rising more than 700% last year, as the company has established a dominant position in the U.S. in electric vehicles and has also made significant progress in batteries, energy storage, software, and, arguably, autonomous driving.

CEO Elon Musk, who also runs the space exploration company SpaceX, has inspired a cult-like following among many investors, on Robinhood and elsewhere, endowing the brand with a halo and meaning Tesla’s near-trillion-dollar valuation is its to lose. While the stock may be part of an EV bubble, the company continues to execute, hitting its target of 500,000 vehicle deliveries last year, and it will take a significant shift in the competitive landscape or in broader market dynamics to knock the stock off its pedestal.

Apple (NASDAQ: AAPL) has long been popular on Robinhood as the stock offers similar qualities to Microsoft, but Robinhood traders are likely even more familiar with the brand as many own Apple products like iPhones, iPads, or AirPods.

Apple has also crushed the market lately, benefiting from increased demand for work-from-home devices during the pandemic and the iPhone 12 “supercycle.” Over the last year, the stock is up 70% and has more than tripled over the last three years.

Its most recent earnings report showed why the stock has been a juggernaut.

Revenue jumped 21% in the quarter to $111.4 billion, and earnings per share increased 35% to $1.68, or $28.8 billion in net income. The tech giant is now the world’s most profitable and most valuable company. And given the tailwinds it has in its services business, as well as areas like 5G and wearables and rumors about an Apple car, the future continues to look bright for the tech giant.

Rounding the top 10 list is AMC Entertainment (NASDAQ: AMC), the world’s largest movie theater chain. After GameStop, AMC seems to have received the most attention from WallStreetBets traders, and that and its low share price seem to have made it the most popular Robinhood stock today, joining the top 10 list in recent weeks.

The stock surged on a short squeeze earlier this year, quadrupling on Jan. 27 as traders poured into the stock en masse, targeting it on Twitter with the hashtag #SaveAMC.

Since then, the stock has pulled back sharply and appears to be retreating to its pre-squeeze level around $4 per share.

Despite the recent attention on the stock and CEO Adam Aron’s late-January announcement that bankruptcy for the company was off the table, AMC’s business is still a wreck, especially after several rounds of share dilution and debt raises. Robinhood investors looking for long-term gains would be better off searching elsewhere.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

What’s most notable about the top 10 Robinhood stocks is how wide of a range they represent. There’s no easy way to pigeonhole the typical investor on the trading platform based on the list above. While some may be attracted to “meme stocks” like GameStop and AMC, others are picking conventional favorites like Apple and Microsoft.

Still, it’s useful to look at Robinhood’s list of most popular stocks for signals from millennial investors. You’ll notice that large-cap tech stocks are among the list, as well as recovery plays like cruise lines, cannabis stocks, and companies with exposure to electric vehicles and renewable energy.

That list offers some insight on where growth investors are putting their money today. As the millennial generation’s earnings increase, and as Robinhood goes through with its expected IPO, look for the brokerage to have even more influence over the direction of the stock market over the coming years.

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple, Microsoft, Tesla, and Twitter. The Motley Fool has a disclosure policy.