Which stocks are millennial investors buying?
It used to be tough to stay but ever since the trading app Robinhood went viral, with its zero-commission trading structure, we can now easily see what millennial investors are buying.
Why? Because Robinhood is essentially all millennial investors. The average age of a Robinhood user is 30. The median age is 28.
With that in mind, here is a list of the 20 most-owned stocks on Robinhood (or, in other words, the 20 most-owned stocks by millennial investors):
Favorite Millennial Stock 1: Advanced Micro Devices, Inc. (AMD)
This one hardly comes as a surprise. Advanced Micro Devices, Inc. (NASDAQ:AMD) is the textbook definition of a battleground stock. There are a lot of bulls, just as many bears, and all of them have loud voices and high conviction.
The battleground nature of AMD stock can be largely attributed to the company’s younger following. AMD makes products catered for the gaming community, and as such, the company has a special place among video game enthusiasts. That group tends to skew toward the young side when it comes to age, so AMD as a company has a bunch of millennial enthusiasts.
Are these millennials right in their bullishness regarding AMD stock?
Yes and no. AMD is branching out its product portfolio to serve higher-end and bigger-growth markets, like data centers. This product expansion does give AMD stock solid growth prospects, but not “take over the world” growth prospects. As such, AMD stock looks like a good stock here and now, but not a great one with doubling or tripling potential.
Favorite Millennial Stock 2: Apple Inc. (AAPL)
The kids love Apple Inc. (NASDAQ:AAPL). That has been obvious for a while. In my experience, among younger demographics, iPhones are the most common smartphone, iPads are the most common tablet, and Macs are the most common computer.
This bodes well for the future of Apple stock.
Apple is transitioning from a hardware company to a hardware and software company. In that transition, Apple is monetizing its iOS ecosystem through various services like iCloud, Apple Music, and the App Store.
Therefore, the more users Apple has in its iOS ecosystem, the larger the company’s software business will become. One way for Apple to maximize the size of its iOS ecosystem is to have a loyal young following since those consumers have a large lifetime value.
Altogether, then, Apple’s strong standing among young consumers is important for the company’s growth prospects going forward.
Favorite Millennial Stock 3: Ford Motor Company (F)
This is an interesting pick for young investors. Ford Motor Company (NYSE:F) is traditionally thought of as an old-school company that really isn’t even close to being as exciting as any of the FANG stocks. Nonetheless, young investors are buying this stock in bulk.
What does that mean? Above all else, it means that Ford still has exceptionally high brand value among young consumers and that when it comes to cars, Ford is still the first brand even today’s younger consumers think of. This high brand value amid increasing competition bodes well for the company’s growth prospects over the next several years.
As for the stock, I’m not so sure that this is a winner. Car ownership rates are dropping thanks to growth in the sharing economy, and that dampens overall demand for cars. Plus, competition is still ramping despite the company’s high brand-value, so Ford will inevitably be eating a smaller share of a smaller pie.
Favorite Millennial Stock 4: General Electric Company (GE)
This is another surprising pick for young investors considering many of them are likely unaware of the full scope of GE’s business.
But the rationale for owning industrial conglomerate General Electric Company (NYSE:GE) is more time-based than anything else. The thesis is that GE is so big and has so many valuable moving parts, that eventually, management will figure things out.
They will divest certain assets, focus investment in critical growth areas and unlock significant value for shareholders.
Thus, in a long enough time frame, GE stock will head significantly higher. Because young investors have a long time frame, they are buying GE stock for this long-haul turnaround.
Favorite Millennial Stock 5: Facebook, Inc. (FB)
So much for the thesis that the kids don’t like Facebook, Inc. (NASDAQ:FB). By now, it is practically common knowledge that the Facebook ecosystem includes Facebook, Messenger, WhatsApp and Instagram.
When it comes to the 20- to 30-year-old demographic, almost every single individual uses either Facebook, Messenger, WhatsApp, Instagram or some combination of all four. Between the four apps, 20- to 30-year-olds tend to spend a significant amount of time scrolling through photos, watching videos and talking with friends.
Because of this, young investors see the long-term upside in FB stock. While the core Facebook app’s popularity may be eroding among younger demographics, Facebook’s other apps are only growing in popularity.
Consequently, the Facebook ad machine will continue to generate huge amounts of money and Facebook stock will head higher.
Favorite Millennial Stock 6: GoPro Inc (GPRO)
The kids aren’t always right.
That is probably the case with GoPro Inc (NASDAQ:GPRO), which is one of the most commonly held stocks on Robinhood despite being laughed at by Wall Street pros as one of the worst investments ever.
GoPro’s high standing among young investors does speak volumes about the company’s staying power among a core demographic of experience-oriented, action-camera enthusiasts. But GoPro offers little value outside of that core market, and as such, the company’s growth prospects are largely muted.
That isn’t good news for GPRO stock, which continues to drop and will continue to drop until the valuation finds a floor.
Favorite Millennial Stock 7: Microsoft Corporation (MSFT)
It is below Apple, which isn’t good from a hardware competition standpoint, but Microsoft Corporation (NASDAQ:MSFT) is still the seventh most widely held stock on Robinhood.
The entire bull thesis on MSFT stock is centered around the cloud. Microsoft is building out a burgeoning cloud business, and that is saving the company despite a dried up hardware business.
But Microsoft stock is trading at a valuation that seems to overvalue that red-hot cloud business and ignore the low-growth prospects of the company’s other operating components.
The net result is a stock trading above where it should. The stock has a Facebook-like multiple, but revenue and earnings growth is a fraction of Facebook’s revenue and earnings growth. As such, Microsoft stock could be due for a valuation correction in the near future.
Favorite Millennial Stock 8: Fitbit Inc (FIT)
Yet again, this is another example of why the kids aren’t always right.
Much like GoPro, Fitbit Inc (NYSE:FIT) is a stock widely held by young investors but which is simultaneously considered an awful investment by many Wall Street pros.
The high ranking among young investors does speak to the company’s core, trend-oriented demographic. But also like GPRO, FIT doesn’t offer much value outside of that core demographic because everyone else is buying Apple Watches or Samsung smartwatches.
Because of this intense competition from bigger and more competent players, Fitbit’s growth prospects are rather bleak. And as a result of those bleak growth prospects, FIT stock doesn’t look like a long-term winner.
Favorite Millennial Stock 9: Snap Inc (SNAP)
This is one of the more interesting stocks on this list.
Many Wall Street pros are writing off Snap Inc (NYSE:SNAP) as dead, saying it will follow in the footsteps of MySpace and fall victim to Facebook’s dominance in the social media sector.
But the kids love Snap. Not only is SNAP one of the most commonly held stocks among young investors, but Snapchat is also the most preferred social media app among teenagers, according to Piper Jaffray’s Taking Stock With Teen survey. Thus, this app appears to have a very loyal user base that numbers around 200 million.
If Snap figures out a way to optimally monetize that 200 million user base, then Snap stock could soar. After all, each one of Facebook’s daily users is currently valued at $370, while each one of Snap’s daily users is valued at just $70.
Favorite Millennial Stock 10: Bank of America Corp (BAC)
When young investors choose a bank to invest in, they most often chose Bank of America Corp (NYSE:BAC).
That is an especially good sign for BAC considering the financial services industry is awfully crowded. Therefore, the fact that BAC is the most-owned bank stock by young investors does bode well for the future of this company.
On the other end of the spectrum, however, banks have a millennial usage and loyalty problem. Not only are 33% of millennials interested in switching banks, but 33% also believe they won’t even need a bank account in five years.
As such, any positives BAC investors take from BAC stock being a top holding of young investors should be taken with a grain of salt. If anything, BAC has a millennial problem.
Favorite Millennial Stock 11: Tesla Inc (TSLA)
The eleventh most commonly owned stock on Robinhood is electric vehicle maker Tesla Inc (NASDAQ:TSLA).
That might seem low for Tesla, especially considering Ford was number three on this list. But that may be more of a valuation and volatility thing than anything else, as Ford is much less expensive and much less volatile. After all, millennials love not only Tesla cars but also Tesla front-man Elon Musk.
In other words, it seems that young investors love Tesla’s products most relative to peers, but not the stock. Take from that what you will, but the long-term bull thesis on TSLA as the world’s premier automotive manufacturer in an EV-dominated world is quite convincing.
Favorite Millennial Stock 12: Twitter Inc (TWTR)
Maybe Twitter Inc (NYSE:TWTR) isn’t dead after all?
Twitter stock was a millennial favorite at the beginning of the year, and it is up 40% year-to-date as the company’s advertising business has seemingly turned a corner after declining for most of 2017.
Is this turnaround for real?
Maybe. Twitter’s advertising revenue growth has come roaring back, and looks to remain in positive territory into the foreseeable future. The company has a valuable and growing live-streaming business which should grow as consumers continue to shift their media consumption habits from linear to internet.
On the other end, user growth is still next to nothing. The valuation is still absurd relative to Facebook. And profitability remains anemic.
Overall, it looks like this stock may be done for the year. But the long-term growth trajectory is certainly improving.
Favorite Millennial Stock 13: NVIDIA Corporation (NVDA)
Maybe it’s because Jim Cramer named his dog after the company. Or maybe it’s because the stock is up more than 1,000% over the past three years.
Whatever the reason, chip-maker Nvidia Corporation (NASDAQ:NVDA) is the thirteenth most owned stock on Robinhood, and the second most owned in the semiconductor world.
The stock gets a lot of attention for the same reasons as AMD (the company’s core gaming market has a bunch of younger-aged enthusiasts). But NVDA has a much more robust growth narrative than AMD. The company is more deeply immersed in the big-picture markets, like automation, data-centers and AI. In fact, NVDA is the undisputed leader in each of those big-picture markets.
Because of its leadership position in all things AI, many investors call NVDA the company of the future. They aren’t wrong. But buyers at current levels should be wary of valuation, as the stock trades at a whopping 30-times forward earnings.
Favorite Millennial Stock 14: Alibaba Group Holding Ltd (BABA)
The most commonly owned Chinese internet stock on Robinhood is Alibaba Group Holding Ltd (NYSE:BABA).
Alibaba is often hyped up as China’s version of Amazon.com, Inc. (NASDAQ:AMZN), and that comparison is pretty accurate. Alibaba is behind not only China’s biggest digital commerce platform, but also the country’s biggest cloud company.
The big difference between Alibaba and Amazon? Alibaba is hugely profitable.
Those profit margins are coming down in the near-term because Alibaba is investing big into new growth areas, like offline retail, cloud, AI, and automation. But those investments will eventually yield huge payoffs, and profits will be significantly larger in 5 years than they are today.
As such, Alibaba stock looks like a long-term winner that is a pure-play on a boom in Chinese consumerism. Millennials seem to be right on this one.
Favorite Millennial Stock 15: Amazon.com, Inc. (AMZN)
Interestingly enough, Amazon is behind the Chinese version of Amazon on this list.
Why? There may be one simple and meaningless reason: the fact that Amazon’s stock price is above $1,000. A lot of Robinhood accounts don’t have much more than a few thousand bucks in total, and as a result, Amazon’s $1,000-plus price tag is often deemed too big by millennial investors.
Nonetheless, that $1,000-plus price tag hasn’t deterred that many young investors from buying AMZN stock, as it is still the fifteenth most owned stock on Robinhood. There is good reason for that. Amazon has so many growth levers (digital commerce, Amazon Web Services, Amazon Prime, Whole Foods, and potentially healthcare and/or logistics next), all of which have multi-year growth potential. As such, Amazon is a big growth story with several years of big growth ahead of it.
Moreover, Amazon is especially popular among young shoppers. According to Piper Jaffray’s Taking Stock With Teens survey, Amazon is the most preferred shopping destination among teens by a mile (44% mind-share, versus 6% for second-place Nike Inc (NYSE:NKE)).
That is a great sign. Today’s young shoppers are tomorrow’s big spenders. If they love Amazon tomorrow as much as they do today, then Amazon could be looking at huge gains in the retail world over the next several years.
Favorite Millennial Stock 16: Netflix, Inc. (NFLX)
Millennials love Netflix, Inc. (NASDAQ:NFLX) so much that it has become part of multiple modern slogans like Netflix & Chill and Netflix & Chew.
But maybe the most appropriate slogan is Netflix & Profit.
Netflix’s user and revenue growth narratives have been robust for a long time, and remain robust today as the company leverages favorable pricing, on-demand convenience, and quality original content to recruit users across the globe in bunches. But recently, Netflix has turned on its profit-making engine, and profit margins are starting to roar higher.
As those profit margins have turned higher, NFLX stock has taken off. Over the past 3 years, NFLX stock is up more than 300%.
In the big picture, so long as user growth remains robust (which it should) and so long as profit margins keep heading higher (which they should), then Netflix stock will head higher.
Favorite Millennial Stock 17: Micron Technology, Inc. (MU)
Coming at number 17 is red-hot chip-maker Micron Technology, Inc. (NASDAQ:MU).
MU stock has been red-hot for the past 2 years, rising by more than 400% during that time-frame. Demand catalysts in the company’s core DRAM and NAND markets have strengthened thanks to big tech companies investing big in data-centers, automation, AI, and next-gen gaming. Meanwhile, supply in the DRAM and NAND markets has failed to keep up with that big demand. That has caused chip prices to soar, which has in turn led to a surge in MU’s profits.
Investors question the sustainability of this positive operating backdrop for MU, and that is why the stock trades at just 5-times forward earnings. But millennial investors clearly think that this operating backdrop is sustainable, which implies a big vote of confidence in markets like AI, automation, and data-centers.
Young investors betting big on the future? Not surprising. But they are probably right about this one. MU stock is too cheap considering its broad exposure to some of the most exciting growth markets in the world.
Favorite Millennial Stock 18: Square Inc (SQ)
Millennial investors are betting big on digital payments provider Square Inc (NASDAQ:SQ).
The big takeaway here is that young investors know that digital payments are the future. Cash is hardly a thing anymore, and it is increasingly being replaced by digital payment methods. Within the digital payments space, young consumers are most often opting for mobile payment methods, and among the most popular mobile payment platforms is Square Cash.
From this perspective, Square is winning when it comes to young investors and young consumers. That is a big positive for the business going forward. If young consumers today are in love with Square Cash, then that means tomorrow – when all those consumers are the driving force of the economy – Square Cash will become commonplace.
As such, Square stock looks like a long-term winner. The valuation is a bit of stretch at current levels, but in the long-run, this stock should head higher.
Favorite Millennial Stock 19: Walt Disney Co (DIS)
Maybe the magic kingdom hasn’t lost its magic after all.
Walt Disney Co (NYSE:DIS) is the nineteenth most owned stock on Robinhood, and that is largely due to the company’s robust content portfolio. Blockbuster movies from Pixar, Marvel, and LucasArts hit theaters all the time, and keep Disney relevant among young consumers.
The millennials haven’t been right about this stock thus far. Disney stock hasn’t done much of anything for several years.
But they could be right going forward. Disney is making a massive pivot into streaming to solve its cord-cutting problems, and considering how robust Disney’s content portfolio is from ESPN to Pixar to Marvel to LucasArts to potentially Fox, Disney’s streaming efforts should be met with huge demand.
Once this happens, Disney starts to look more like a Netflix than a struggling cable company, and DIS stock should explode higher.
Favorite Millennial Stock 20: Chesapeake Energy Corporation (CHK)
This one may come as a surprise. After all, Chesapeake Energy Corporation (NYSE:CHK) really isn’t associated with the millennial generation all that often, if ever.
But my theory on this stock holding the twentieth spot on this list is pretty simple. It’s a sub-$5 stock, that used to be a sub-$2 stock, and before that, used to be a $30 stock.
In other words, the price tag is ostensibly cheap and the stock price is volatile. Considering Robinhood investors presumably having more risk and less overall capital, it isn’t too surprising to see a stock with a single-digit stock price and big swings be on this list.
As far as the fundamental thesis for CHK stock goes, there are reasons to be bullish on CHK considering the rise in commodity prices, particularly the rise in oil and natural gas prices. If this run persists, CHK stock could stay on its upward trend.
As of this writing, Luke Lango was long AMD, AAPL, GE, FB, TSLA, BABA, AMZN, MU and DIS.