13 Most Profitable Robinhood Stocks

Published on December 27, 2023 at 8:00 pm by Usman Kabir in Hedge Funds, News

In this article, we discuss the 13 most profitable Robinhood stocks. If you want to read about some more Robinhood stocks, go directly to 5 Most Profitable Robinhood Stocks.

The stock picking habits of retail investors who use platforms like Reddit to strategize and stock trading applications like Robinhood Markets, Inc. (NASDAQ:HOOD) to carry out their trades have come under the spotlight in recent years as they engage in a battle for market supremacy with hedge fund titans. According to a report by investing platform Public, nearly 30 million new brokerage accounts were created between 2020 and 2022, most of them by retail traders who now account for more than 25% of total trading volume at the stock market.

Even though these retail investors have a reputation for investing on a whim – the investments in entertainment firm Mattel, Inc. (NASDAQ:MAT) increased by more than 600% following the release of the superhit movie Barbie – the report by Public reveals that more than 50% of retail traders are also focused on dividend investing to diversify portfolios. A lot of these retail traders are making use of new tools for stock buying and selling, most notably the use of artificial intelligence in their daily trading patterns.

Profit seems to be a key factor when analyzing the trades of these retail investors. Some of the most profitable Robinhood stocks include Tesla, Inc. (NASDAQ:TSLA), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc. (NASDAQ:GOOG). Per Public, the use of AI in trading has somewhat balanced the usage of social media in the retail investor universe. Environmental, social, and governmental concerns remain high on the retail investors agenda when investing in companies, in contrast to the older generation of stock pickers who prefer balance sheets.

The use of artificial intelligence is not just limited to stock trading. It has permeated many aspects of life. This is demonstrated by the recent earnings call of Alphabet Inc. (NASDAQ:GOOG) where Sundar Pichai, the CEO of the firm, highlighted some of the steps his company was taking to stand out in the domain. Pichai noted that his firm was using generative AI in ads products to serve both advertisers and users. He also underlined some uses of AI to boost creativity and productivity.

“Finally, we are making sure we develop and deploy AI technology responsibly so that everyone can benefit. Last week, we signed on to joint commitments with other leading AI companies at the White House, building on the principles that have guided our work for many years. To take advantage of the AI opportunities ahead, we’ve been sharpening our focus as a company, investing responsibly with great discipline and finding areas where we can operate more cost-effectively.

We’ve made good progress in data center machine efficiency, which will pay dividends as we continue to invest in AI. We continue to slow our expense growth and pace of hiring and ensure our teams are aligned to our highest priorities. This quarter, we reallocated a number of teams, including aligning Waze’s ad sales with our existing business organization. We are combining various engineering efforts across core infrastructure and cloud.”

Our Methodology

The companies that are popular on Robinhood were selected for the list using the Robinhood Investor Index and other third party tools. The firms that have a net profit margin of over 20% were considered and ranked according to hedge fund sentiment. Data from around 900 elite hedge funds tracked by Insider Monkey in the third quarter of 2023 was used to identify the number of hedge funds that hold stakes in each firm. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.

A graph plotting the trends and performance of stocks on the public equity markets.

Most Profitable Robinhood Stocks

13. Airbnb, Inc. (NASDAQ:ABNB)

Number of Hedge Fund Holders: 44

Airbnb, Inc. (NASDAQ:ABNB) operates a platform that enables hosts to offer stays and experiences to guests worldwide. On October 31, Mizuho analyst James Lee maintained a Neutral rating on Airbnb, Inc. (NASDAQ:ABNB) stock and lowered the price target to $130 from $150.

Among the hedge funds being tracked by Insider Monkey, Florida-based Citadel Investment Group is a leading shareholder in Airbnb, Inc. (NASDAQ:ABNB) with 3 million shares worth more than $422 million.

Just like Tesla, Inc. (NASDAQ:TSLA), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc. (NASDAQ:GOOG), Airbnb, Inc. (NASDAQ:ABNB) is one of the most profitable Robinhood stocks.

In its Q3 2023 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and Airbnb, Inc. (NASDAQ:ABNB) was one of them. Here is what the fund said:

“Top contributors to performance for the quarter included global online travel marketplace Airbnb, Inc. (NASDAQ:ABNB). Airbnb again defied fears about weaker travel demand as it experienced continued recovery in cross-border and urban nights and resilient pricing trends, though travel volumes remain mixed.”

12. ASML Holding N.V. (NASDAQ:ASML)

Number of Hedge Fund Holders: 57

ASML Holding N.V. (NASDAQ:ASML) makes and sells advanced semiconductor equipment systems. On November 30, investment advisory JPMorgan maintained an Overweight rating on ASML Holding N.V. (NASDAQ:ASML) stock and raised the price target to EUR 800 from EUR 690.

Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in ASML Holding N.V. (NASDAQ: ASML) with 4.8 million shares worth more than $2.8 billion.

11. The Coca-Cola Company (NYSE:KO)

Number of Hedge Fund Holders: 57

The Coca-Cola Company (NYSE:KO) is a beverage company that manufactures, markets, and sells various non-alcoholic beverages worldwide. On December 13, investment advisory Citi maintained a Buy rating on The Coca-Cola Company (NYSE:KO) stock and raised the price target to $67 from $65.

Among the hedge funds being tracked by Insider Monkey, Omaha, Nebraska-based firm Berkshire Hathaway is a leading shareholder in The Coca-Cola Company (NYSE:KO) with 400 million shares worth more than $22 billion.

In its Q3 2023 investor letter, Hayden Capital, an asset management firm, highlighted a few stocks and The Coca-Cola Company (NYSE:KO) was one of them. Here is what the fund said:

“It’s not just emerging markets either, where one could argue a “scarcity premium” given fewer quality public companies. Even in the US, The Coca-Cola Company (NYSE:KO) trades at ~30x P/E despite having the same earnings as 10 years ago.

Both of these companies actually have lower revenues than 10 – 15 years ago too, indicating that their profit growth is mostly from margin expansion. This can only last for so long before there’s no more excess expenses left to cut.

I find it ironic that all these companies trade as “bond-equivalents” in the minds of investors – even commanding lower yields than US treasuries, the safest security in the world. But it’s clear that their businesses are not nearly as safe. Coca-Cola is facing disruption risk from consumers shifting to new, heathier beverage brands.

But these companies are ~35% more expensive than US Treasuries, despite the heightened risk. On a risk-adjusted basis, one could argue the implied premium is even higher.”

Perhaps the explanation is simply the price volatility difference between these stocks and treasuries over the last two years. For example, 10-year Treasury bonds are down ~-20% since the beginning of 2022. By comparison, KO and PG are remarkably down only -4 – 6% over that time frame.”

10. Cisco Systems, Inc. (NASDAQ:CSCO)

Number of Hedge Fund Holders: 64

Cisco Systems, Inc. (NASDAQ:CSCO) makes and sells networking and other products. On November 16, investment advisory Evercore maintained an In Line rating on Cisco Systems, Inc. (NASDAQ:CSCO) stock and lowered the price target to $55 from $63.

At the end of the third quarter of 2023, 64 hedge funds in the database of Insider Monkey held stakes worth $1.6 billion in Cisco Systems, Inc. (NASDAQ:CSCO), compared to 55 in the previous quarter worth $1.4 billion.

Here is what Oakmark Funds has to say about Cisco Systems, Inc. (NASDAQ:CSCO) in its Q3 2023 investor letter:

“Cisco Systems, Inc. (NASDAQ:CSCO) is the leading networking solutions company. Networking equipment becomes more important as businesses modernize their IT infrastructure, and Cisco is well positioned to capture this demand given its broad portfolio and highly effective go-to-market strategy. Cisco is transitioning away from selling mainly transactional hardware and toward selling more software and subscriptions. This shift is expected to accelerate revenue growth, improve operating margins and build recurring revenue. Despite these notable business improvements, Cisco still trades near a trough valuation relative to the S&P 500 Index. More recently, Cisco announced its intention to acquire Splunk, a leader in security and observability, adding to its already strong position in the increasingly important security market. At a low-teens multiple of our estimate of normalized earnings, Cisco is trading comfortably below our estimate of intrinsic value.”

9. PDD Holdings Inc. (NASDAQ:PDD)

Number of Hedge Fund Holders: 66

PDD Holdings Inc. (NASDAQ:PDD) is a Shanghai-based company that owns and operates an ecommerce platform. On November 1, investment advisory UBS assumed coverage of PDD Holdings Inc. (NASDAQ:PDD) stock with a Buy rating and a price target of $137.

At the end of the second quarter of 2023, 66 hedge funds in the database of Insider Monkey held stakes worth $4.3 billion in PDD Holdings Inc. (NASDAQ:PDD), compared to 67 in the preceding quarter worth $2.6 billion.

8. McDonald’s Corporation (NYSE:MCD)

Number of Hedge Fund Holders: 70

McDonald’s Corporation (NYSE:MCD) owns and runs fast food restaurants. On December 20, investment advisory HSBC initiated coverage of McDonald’s Corporation (NYSE:MCD) stock with a Buy rating and a price target of $317.

At the end of the third quarter of 2023, 70 hedge funds in the database of Insider Monkey held stakes worth $2.5 billion in McDonald’s Corporation (NYSE:MCD), compared to 68 the preceding quarter worth $4.2 billion.

7. Intuitive Surgical, Inc. (NASDAQ:ISRG)

Number of Hedge Fund Holders: 78

Intuitive Surgical, Inc. (NASDAQ:ISRG) develops, manufactures, and markets products that enable physicians and healthcare providers to enhance the quality of and access to minimally invasive care. On December 12, investment advisory Truist maintained a Buy rating on Intuitive Surgical, Inc. (NASDAQ:ISRG) stock and raised the price target to $375 from $320.

At the end of the third quarter of 2023, 78 hedge funds in the database of Insider Monkey held stakes worth $5 billion in Intuitive Surgical, Inc. (NASDAQ:ISRG), compared to 68 in the preceding quarter worth $3.4 billion.

In its Q3 2023 investor letter, ClariVest Asset Management, an asset management firm, highlighted a few stocks and Intuitive Surgical, Inc. (NASDAQ:ISRG) was one of them. Here is what the fund said:

“Intuitive Surgical, Inc. (NASDAQ:ISRG) provides robotic-assisted surgical solutions and invasive care through a comprehensive ecosystem of products and services. Management expects the backlog of deferred surgical procedures to take several quarters to recover, with bariatric surgery growth potentially slowing down with the increasing use of weight loss drugs.”

6. Booking Holdings Inc. (NASDAQ:BKNG)

Number of Hedge Fund Holders: 81

Booking Holdings Inc. (NASDAQ:BKNG) provides travel and restaurant online reservation and related services worldwide. On December 20, investment advisory Citi maintained a Buy rating on Booking Holdings Inc. (NASDAQ:BKNG) stock and raised the price target to $4,100 from $3,425.

At the end of the third quarter of 2023, 81 hedge funds in the database of Insider Monkey held stakes worth $5.8 billion in Booking Holdings Inc. (NASDAQ:BKNG), compared to 78 in the preceding quarter worth $6.5 billion.

Along with Tesla, Inc. (NASDAQ:TSLA), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc. (NASDAQ:GOOG), Booking Holdings Inc. (NASDAQ:BKNG) is one of the most profitable Robinhood stocks.

In its Q3 2023 investor letter, Ensemble Capital Management, an asset management firm, highlighted a few stocks and Booking Holdings Inc. (NASDAQ:BKNG) was one of them. Here is what the fund said:

“Booking Holdings Inc. (NASDAQ:BKNG) (+14.21%): Despite macroeconomic worries and inflation eating into global consumers’ ability to spend, households around the world continue to prioritize travel. While so called “revenge travel,” or increased travel spending after being stuck inside during COVID, has likely run its course, global hotel room nights have only recently returned to pre-COVID trends. As COVID has mostly ceased to have an impact on travel, other than in Asia where China’s extended lockdown means a recovery is still ongoing, growth going forward is likely to be more modest. But during COVID, Booking stayed on offense and has been taking market share. Notably, the company’s alternative accommodations offering has grown substantially and in recent quarters has grown faster than Airbnb.”

Click to continue reading and see 5 Most Profitable Robinhood Stocks.

AI Fire Sale: Insider Monkey’s #1 AI Stock Pick Is On A Steep Discount

Published on October 30, 2024 at by Inan Dogan, PhD

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A New Dawn is Coming to U.S. Stocks

Published on November 16, 2024 at by Insider Monkey Staff

I work for one of the largest independent financial publishers in the world – representing over 1 million people in 148 countries.

We’re independently funding today’s broadcast to address something on the mind of every investor in America right now…

Should I put my money in Artificial Intelligence?

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Click to continue reading…

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