No stranger to controversy, mobile trading app Robinhood continues to generate headlines, for better or for worse. On the positive end, the platform succeeded where so many financial advisors have failed in the pre-pandemic era: getting millennials to invest for their future security. Following the novel coronavirus pandemic, young people can’t get enough Robinhood stocks to buy.
However, Robinhood also draws substantial criticism for its approach. First, the platform utilizes a gamified interface. Whenever you acquire those stocks to buy that everyone on social media is talking about, you are psychologically rewarded with satisfying audible tones and visually appeasing graphical icons. This creates a subconscious incentive to invest more, with the concept of investing gradually devolving into gambling.
Second, Robinhood suffered intense scrutiny from its own users when it took action to block transactions of so-called meme stocks. Worse yet, the criticism came from across the otherwise combative political spectrum. By interfering with what users can and can’t buy, the platform owners seemed to side with Wall Street hedge funds who were shorting certain equity units.
Despite the myriad scandals involving Robinhood, it remains a popular place for young people to channel their inner Gordon Gekko. Moreover, as we head back to the office, the mobile app can attract more users thanks to its everyday conveniences.
Plus, you might be surprised to learn that among its most popular trades, many of these names are actually smart investments. Contrary to stereotypes, not all Robinhood stocks to buy are speculative affairs. Here are, in my opinion, some of the best ideas to acquire with just $2,000 to start.
While the following list of companies come from Robinhood’s top 50 as of the beginning of May 2021, you should be aware that popularity alone isn’t a justification to invest. Instead, please perform your due diligence before making your decision. With that caveat out of the way, here are seven Robinhood stocks to buy with $2,000.
- Microsoft (NASDAQ:MSFT)
- Amazon (NASDAQ:AMZN)
- Coca-Cola (NYSE:KO)
- Ford (NYSE:F)
- Pfizer (NYSE:PFE)
- Coinbase (NASDAQ:COIN)
- GoPro (NASDAQ:GPRO)
Stocks to Buy: Microsoft (MSFT)
If you are someone who is just starting out in the world of equities investing, I completely understand the temptation to acquire stocks to buy that are either generating headlines or have intense speculative potential due to their low share price. Certainly, we’ve all seen the stories of kids driving Lambos because they made some brilliant investment.
Chances are, though, if you do some digging, you’ll discover that a lot of these cases are either scams or have missing critical information: trust fund baby, anyone? In my view, it’s important that when you’re starting out, you have money in stable, established names like Microsoft. No, it’s not one of the stocks to buy that will make you rich overnight. But it probably won’t leave you stranded either.
Plus, MSFT stock is a slow burn, like a well-marinated steak. Fundamentally, Microsoft has some of the most compelling businesses, including remote-work platforms that cater to the post-Covid-19 reality. Further, it’s Office 365 Software-as-a-Service is irreplaceable, both as a gig economy tool and for any professional endeavor.
Finally, you get exposure to the ever-expanding video game industry with its Xbox console. Despite its boring status, MSFT stock is well-positioned for the new normal.
It’s hard not to notice that Amazon is a bit of a contradiction. Undeniably, AMZN represents one of the most powerful stocks to buy for its merciless approach to business expansion. But this aggressiveness is also what gets the company into hot water.
During the initial onslaught of the Covid-19 pandemic, many workers complained about mistreatment. Specifically, they wanted paid time off for those who got sick or worse yet, began experiencing Covid-like symptoms. No matter what you say about the capitalist ethos, it wasn’t a good look for AMZN stock.
Plus, study after study confirms that millennials care deeply about social responsibility and sustainability. Therefore, the rise of AMZN stock clashes sharply with this ideological front.
Nevertheless, Amazon also proves that money talks and something else walks. Due to the severe disruption of the novel coronavirus, consumers of all ages shifted their purchasing online. Naturally, this caused a huge sales surge among online retailers, with e-commerce representing a record market share of total retail sales in the second quarter of 2020.
Moving forward, it’s very possible that Covid at least semi-permanently changed our consumption behavior. With e-commerce winning out, AMZN is a smart choice among Robinhood stocks to buy.
Stocks to Buy: Coca-Cola (KO)
One of the more intriguing stocks to buy on the mobile trading app, Coca-Cola is a name that you would find among the holdings of Berkshire Hathaway (NYSE:BRK-B). You probably wouldn’t expect KO stock to make up a significant portion of young traders’ portfolios, yet here we are.
Part of the reason why Coca-Cola could be attracting the young is its recession-resistant business. Back during the Great Recession, a number of analysts supported the idea of buying KO stock. Simply put, Coke represents a cheap thrill or respite, a psychological reward to motivate you to keep going. Also, the company generally produces solid financial results, and its dividends stabilize the equity unit from volatility.
Those attributes are attractive now. Sure, the most popular stocks to buy on social media tend to be speculative affairs. But because speculation has reached record levels, as evidenced by ridiculous stock trading on margin, many investors are worried about the bubble bursting. Thus, positioning yourself with well-established names makes sense, if only for a sense of self-preservation.
Lastly, Coca-Cola has been rebranding itself to make it more appealing to millennials. Cynically, if the economy busts, KO will probably find this initiative to be very successful.
Long an underperforming automotive firm, Ford finally found its way with its Mustang Mach-E. An electric SUV, many ardent Mustang fans bemoaned that anything other than a pony car would sport the famous brand. While I appreciate the sentiment, the reality is that the demographic that loves pony cars is fading away. Even some of the baby boomers are gravitating toward electric vehicles (EVs).
Therefore, Ford had a choice: adapt or die. It chose the former, and F stock is much better for it. Over the trailing year, shares are up 121%. On a year-to-date basis, they’re up nearly 32%, making Ford one of the better performing stocks to buy on Robinhood. I anticipate more growth to come.
Admittedly, sales data from February to April of this year have been declining, which isn’t the most helpful narrative. However, it’s also possible that the unprecedented supply-chain disruption has impacted sales. Because when you look at sentiment on the ground floor, the Mach-E is moving rapidly off dealer lots. That says a ton because this EV isn’t exactly what you call cheap.
Further, Ford is providing viable competition in the space as its sales are taking market share away from rivals. That’s the key point you want to remember with F stock.
Stocks to Buy: Pfizer (PFE)
Recently, pharmaceutical behemoth Pfizer beat expectations for its first-quarter earnings report, which ordinarily should be considered good news. After all, Pfizer, along with rival Moderna (NASDAQ:MRNA) developed their messenger-RNA-based vaccines to combat the SARS-CoV-2 virus. More importantly, they were both first to market, with perhaps Pfizer having the edge in terms of reputation and safety record.
Nevertheless, a Mizuho analyst downgraded PFE stock to “neutral” from “buy,” citing challenges to “see clear drivers of meaningful upside.” Naturally, I understand where the analyst is coming from. I’ve had an on-again, off-again opinion about Pfizer and other Covid-related trades.
Still, you can make the argument that Pfizer remains one of the longer-term stocks to buy amid the Robinhood crowd. As you know, one of the challenges to herd immunity has been vaccine reluctance; primarily that experimental vaccines were pushed too quickly.
However, vaccine hesitancy has been a long-documented struggle for the medical community. What could help adoption of this approach is that eventually, all mRNAs “are ultimately degraded at a defined rate.” This implies that mRNA vaccines can leverage their inherent manufacturing speed to address future pandemics without concern of permanent impact to the human genome (mRNA protein synthesis occurs in the cytoplasm anyways, not in the nucleus).
Over the long run, PFE stock could be a very relevant buy.
In my view, Coinbase is easily the most controversial name on this list of Robinhood stocks to buy. Honestly, I’m not entire sure that you should purchase COIN stock right now. I find it bothersome that shares of the ultra-popular cryptocurrency wallet and exchange have dropped double digits over the trailing five business days, whereas many cryptos are up double and even triple digits over the calendar week.
Is this a sign that speculation in the virtual currency sector is also getting out of control? I’m tempted to suggest that it is. When you have crypto coins developed as a joke, yet that joke turns into an asset worth nearly $71 billion, you can’t help but wonder whether we’re in the midst of a modern-day tulip bubble mania.
No matter what happens to the valuation of this crazy market, though, one thing is clear: Cryptocurrencies have cemented their credibility as viable trading assets. You might even find my InvestorPlace colleague Will Ashworth splurging on a few altcoins himself.
Okay, maybe not. But banking on the platform for buying and selling cryptos? That might be an investment worth considering for many folks. Again, I’m not sure about the timing, but if you have a patient outlook, you may want to give COIN stock a second look.
Stocks to Buy: GoPro (GPRO)
For many years, I’ve criticized GoPro as an action-camera manufacturer plying its trade in an increasingly commoditized industry. Frankly, the volatility in GPRO stock gave me no choice but to be cautious about it. But perhaps this might end up being the Cinderella story that Wall Street loves to capitalize. Over the trailing year, GPRO shares have gained nearly 172%.
Based on the company’s latest earnings report, the rally isn’t going to die in 2021. Management noted that big demand for its higher-end products and an increase in subscriptions bolstered its Q1 revenue. At first, the sales bump — particularly for its higher-margin action cams — might seem counterintuitive due to the pandemic. Then again, governmental response to the pandemic may have actually lifted demand.
First, you have the stimulus checks that went to millions of households, including those that weren’t exactly suffering. For these fortunate folks, the money they got wasn’t lifechanging, but it could definitely be splurged on premium consumer electronics. Second, the crisis basically gave white-collar workers a free one-year vacation (or staycation). With extra time on their hands, they may have bought luxuries such as action cams.
Moving forward, a potential mass-scale pivot to independent contractor work (i.e., the gig economy) could support visual-arts based companies like GoPro. It’s a risk to be sure but one worth taking with a small amount of your $2,000.
On the date of publication, Josh Enomoto held a long position in F.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.