8 Robinhood Stocks Investors Are Buying in Q4
It's been a roller coaster year for Robinhood users.
Popular trading app Robinhood and its investors have been making headlines throughout 2021. In the third quarter, the company completed its highly anticipated initial public offering and published its first quarterly earnings. The disclosures included Robinhood's 22.5 million funded accounts and $102 billion in assets. According to company estimates, nearly half of all new U.S.-funded retail trading accounts opened from 2016 to 2021 were Robinhood accounts. The median age of Robinhood users is just 31, according to the company, and the relatively inexperienced trader base has had some huge hits and misses in 2021. Here are the eight most popular Robinhood stocks.
Ford Motor Co. (ticker: F)
Electric vehicle stocks are extremely popular among younger investors, but legacy automaker Ford is once again the most popular holding among Robinhood users in the fourth quarter. Earlier this year, Ford committed to investing $30 billion in EV and autonomous vehicle technology through 2025. However, the company reported a 27.4% drop in sales in the third quarter as the global semiconductor shortage continues to weigh on the auto industry. Ford trades at a much more compelling valuation than leading EV stocks, and its electric Mustang Mach-E SUV recently won Car and Driver's 2021 EV of the Year award.
Apple Inc. (AAPL)
Apple has been one of the most profitable, consistent performers in the market for more than a decade, but the stock has lagged the S&P 500 in 2021. In the most recent quarter, Apple crushed consensus analyst earnings and revenue estimates and reported nearly a 50% increase in iPhone revenue compared to a year ago. Apple unveiled its new generation of iPhone 13 models in September, and analysts expect another big iPhone upgrade cycle in the quarters ahead. The company spent a mind-boggling $29 billion on dividends and buybacks in its fiscal third quarter alone.
Tesla Inc. (TSLA)
Robinhood users are going all-in on the auto industry of the future, and Tesla has a huge first-mover advantage in EVs. Robinhood users helped drive a 700% gain for Tesla shares in 2020, but Tesla shares are up just around 10% so far in 2021. Earlier this month, Tesla reported 241,300 vehicle deliveries in the third quarter, topping analyst estimates by more than 20,000 vehicles. However, the stock is up less than 2% since the deliveries beat, and Tesla skeptics question just how much future growth is already priced into Tesla shares at a $800 billion market capitalization.
AMC Entertainment Holdings Inc. (AMC)
AMC has been one of the most controversial yet best-performing stocks of 2021. The company narrowly avoided bankruptcy in early 2021 after generating a $4.59 billion net loss in 2020. However, groups of stock traders on Reddit and other social media platforms began orchestrating targeted buying campaigns in a handful of stocks to drive out short sellers in early 2021, and AMC became one of the most popular online "meme" stocks. Reddit traders may have helped save AMC for now, but the company's aggressive equity offerings have sent its share count skyrocketing by 392% since the beginning of 2020.
Sundial Growers Inc. (SNDL)
Cannabis stocks such as Sundial Growers have tremendous long-term upside potential, especially if federal recreational legalization happens in the U.S. However, Canadian and international cannabis sales growth has disappointed in recent years, and Sundial has reported negative revenue growth and net losses in each of the past four quarters. As the company continues to burn through cash, it has been forced to sell shares of stock to fund operations. Since the beginning of 2020, Sundial's outstanding share count is up a whopping 1,800%, and the stock is down about 28% in the past six months.
Nio Inc. (NIO)
Nio is one of a handful of stocks that provide Robinhood users with exposure to the potentially massive Chinese EV market. Nio has reported some extremely impressive growth numbers, including 125.7% year-over-year delivery growth in September. However, the stock is down around 23% in the past three months thanks in large part to regulatory crackdowns in both the U.S. and China that have weighed on Chinese stocks. Even after the pullback, Nio shares still trade at 13.7 times sales. Nio has also yet to turn a profit, making the stock an extremely high-risk play for investors.
Amazon.com Inc. (AMZN)
Online retail and cloud services giant Amazon has been rising in popularity among Robinhood users in the past three months. Amazon continues to grow and monetize its massive user base, and it is also expanding into additional high-growth businesses such as advertising. Advertising reportedly makes up the majority of Amazon's "other" sales, which were up 87% in the most recent quarter to $7.9 billion. Amazon shares are uncharacteristically down around 13% in the past three months, partially on concerns that rising labor costs will eat into near-term profits. However, Robinhood users clearly see the pullback as a buying opportunity.
Microsoft Corp. (MSFT)
Like Apple, Microsoft is one of the biggest success stories among legacy tech giants that have completely reinvented themselves. Microsoft has become Amazon's biggest challenger in cloud services. The company has successfully transitioned its Office professional software product offerings to a subscription model and it even raised Office 365 prices in August. Microsoft's professional social media platform LinkedIn and its Xbox video game business also provide unique growth opportunities, while the company's core businesses continue to generate tremendous cash flow. Last quarter, Microsoft reported $16.4 billion in net income, and its board recently approved a new $60 billion share buyback program.
These are Robinhood's most popular stocks:
-- Ford Motor Co. (F)
-- Apple Inc. (AAPL)
-- Tesla Inc. (TSLA)
-- AMC Entertainment Holdings Inc. (AMC)
-- Sundial Growers Inc. (SNDL)
-- Nio Inc. (NIO)
-- Amazon.com Inc. (AMZN)
-- Microsoft Corp. (MSFT)
