Below we present the list of 5 Most Popular Stocks on Robinhood. For our methodology and a more comprehensive list please see 10 Most Popular Stocks on Robinhood.
5. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Shareholders: 132
Robinhood Popularity Ranking (Q1 2021 – Q2 2023): 1st (58 points)
Stock Performance (January 1, 2021 – June 6, 2023): +38.4%
Hedge funds have never been quite as bullish on Apple Inc. (NASDAQ:AAPL) as the general public, as evidenced by Apple’s position atop the Robinhood popularity charts, while it doesn’t even crack hedge funds’ top 10 stock picks. In this case, the retail investors came out the winners, as Apple shares have gained a solid 32% since the beginning of 2021.
Investors have been particularly bullish on Apple Inc. (NASDAQ:AAPL) this year thanks to the potential for a sturdy demand rebound in China as well as the company’s extremely strong gross margin guidance for its current fiscal year, which is being driven in part by the growth of Apple’s much more profitable services segment. That should insulate Apple’s bottom line from any potential decline in iPhone sales going forward, which is certainly a possibility given the global smartphone market has been declining in recent quarters.
Alger Spectra Fund laid out the details of Apple Inc. (NASDAQ:AAPL)’s fiscal Q1 results in the fund’s Q1 2023 investor letter:
“Apple Inc. (NASDAQ:AAPL) is a leading technology provider in telecommunications, computing, and services. Apple’s iOS operating system is the company’s unique intellectual property and competitive strength. This software drives particularly tight engagement with consumers and enterprises, which is fostering the growing purchase of high margin services like music, apps, and Apple Pay. While iPhone sales were down year-over-year (YoY). services revenues grew 7% YoY which was slightly above analyst estimates. Company earnings were also better-than-anticipated due to lower input costs, such as memory chips and cost control initiatives. Aside from production disruptions, negative sentiment had also weighed on shares as investors questioned how an economic slowdown would affect consumer demand for Apple products in 2023. However, management projected an acceleration in earnings for the fiscal first quarter, where they noted that iPhone and services growth should remain strong, along with encouraging impacts around product mix, lower input costs, and continued cost controls.”
4. Ford Motor Company (NYSE:F)
Number of Hedge Fund Shareholders: 37
Robinhood Popularity Ranking (Q1 2021 – Q2 2023): 3rd (38 points)
Stock Performance (January 1, 2021 – June 6, 2023): +43.2%
Hedge fund ownership of Ford Motor Company (NYSE:F) hit a ten-year high in the middle of 2021, but has fallen by 36% since. Robinhood retail investors on the other hand, which are bullish on two different EV makers, also like Ford, which previously ranked as the second-best selling EV maker in North America. Their investments paid off, as F shares have gained 38% since January 1, 2021.
The automaker’s EV sales are starting to slip however (it fell behind GM to rank as the third-best selling EV maker in North America during Q1) and it’s losing a significant amount of money on EV sales (the company projects to lose $3 billion this year on its consumer EV sales). Ford Motor Company (NYSE:F) does expect EVs to be profitable by 2026, by which time it’s projecting an 8% profit margin on them compared to a 40% operating margin loss in 2022.
Leaven Partners discussed the earnings outlook for Ford Motor Company (NYSE:F) in its Q3 2022 investor letter:
“In our last quarterly letter, I briefly mentioned that the consensus estimates for corporate profits appeared to be a bit too sanguine. I referenced a Reuters article that reported, as of June 17, Wall Street expected S&P 500 earnings to grow by 9.6% in 2022, which was up from 8.8% in April and from 8.4% in January. That tune began to change at the end of July and accelerated in August and September, as major players, such as Ford (NYSE:F), has recently issued profit warnings and/or have withdrawn guidance. In response, Wall Street has altered its outlook: lowering third-quarter profit growth to 4.6%[2] from 7.2% in early August and slashing full-year profit growth to 4.5%.”
3. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Shareholders: 292
Robinhood Popularity Ranking (Q1 2021 – Q2 2023): T-7th (18 points)
Stock Performance (January 1, 2021 – June 6, 2023): +51%
Microsoft Corporation (NASDAQ:MSFT) is hedge funds’ single-most popular stock ticker and hit an all-time high in hedge fund ownership during Q1. It also consistently ranks among the top ten of Robinhood investors’ holdings. Those bullish positions have worked out very well for both money managers and retail investors alike in recent years, as MSFT shares have gained 50% since the end of 2020.
Microsoft Corporation (NASDAQ:MSFT) continues to deliver strong growth across its offerings both old and new, including Office and Cloud, which both grew revenue and EPS at a double-digit rate in Q1. The tech giant is also incorporating AI into both of those products through its partnership with ChatGPT creators OpenAI, which could further bolster their utility and drive greater adoption. Customers are rapidly latching onto its integration of AI into Azure, as the number of customers utilizing the platform’s OpenAI language models increased ten-fold quarter-over-quarter in Q1.
The Alger Spectra Fund believes Microsoft Corporation (NASDAQ:MSFT) has a first-mover advantage when it comes to its investments in AI, as the fund discussed in its Q1 2023 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) is a beneficiary of corporate America’s transformative digitization. Microsoft’s CEO expects technology spending as a percent of Gross Domestic Product (GDP) to jump from about 5% now to 10% in 10 years and that Microsoft will continue to capture market share within the technology sector. The company operates through three segments: Productivity and Business Processes (Office. LinkedIn, and Dynamics), Intelligent Cloud (Server Products and Cloud Services. Azure, and Enterprise Services), and More Personal Computing (Windows Devices, Gaming, and Search). While the company reported decent fiscal second quarter results, their investment in OpenAl’s ChatGPT captured the attention of investors. contributing to positive performance. Throughout the quarter. Microsoft surprised investors with continual rollouts of new Al capabilities across the company’s portfolio (e.g., Bing, GitHub. Teams, Office 365). Furthermore, the company announced Microsoft 365 Copilot, which leverages GPT-4, a large language model, combined with the Microsoft Graph of data to provide Al virtual assistance. We believe Microsoft’s investment in OpenAl provides a first-mover advantage in the Al transformer model space. Despite challenges in the early days of Al-powered applications, the pace of Al innovation is faster than any other enterprise technology previously observed, in our view.”
2. General Electric Company (NYSE:GE)
Number of Hedge Fund Shareholders: 59
Robinhood Popularity Ranking (Q1 2021 – Q2 2023): T-7th (18 points)
Stock Performance (January 1, 2021 – June 6, 2023): +54.4%
General Electric Company (NYSE:GE) might be one of the biggest surprises to make Robinhood investors’ top ten stock picks, as it’s not exactly a trendy stock. Whatever their motivations were for adding GE to their Robinhood portfolios, the moves paid off, as General Electric shares have jumped by 52% since the start of 2021. Hedge funds haven’t been quite as bullish, with the number of them long GE falling by 20% since Q1 2021.
It would appear that Robinhood investors were bullish on General Electric Company (NYSE:GE)’s breakup plans, which have thus far proven to be successful. The company spun off its healthcare division early this year and plans to split off its power generation businesses next year, which will then leave its strongest division, aerospace, as GE’s core business moving forward. Just as importantly, its various business units have all enjoyed improved performance of late, with overall orders growing by 26% in the first quarter.
Vulcan Value Partners discussed some of the positive momentum over at General Electric Company (NYSE:GE) in its Q1 2023 investor letter:
“General Electric Company (NYSE:GE) was a material contributor during the quarter. With the successful spin-off of GE HealthCare in early January, the company operates in two major markets: GE Aerospace and GE Vernova. GE Aerospace powers three out of every four commercial flights. GE Vernova helps generate 30% of the world’s electricity and has a meaningful role to play in the energy transition. The company’s service activities, which are higher margin and more resilient, represent approximately 60% of revenue and 85% of its backlog. The company reported strong fourth quarter 2022 results and management’s 2023 outlook is positive.”
1. AMC Entertainment Holdings, Inc. (NYSE:AMC)
Number of Hedge Fund Shareholders: 19
Robinhood Popularity Ranking (Q1 2021 – Q2 2023): 4th (37 points)
Stock Performance (January 1, 2021 – June 6, 2023): +118%
One of the top five most popular stocks among Robinhood shareholders and the best performing stock out of their top ten holdings is AMC Entertainment Holdings, Inc. (NYSE:AMC), which has more than doubled in value since the beginning of 2021. Hedge funds also began buying into AMC more heavily in the second-half of 2020 and have largely maintained their AMC holdings since.
While AMC Entertainment Holdings, Inc. (NYSE:AMC)’s returns do look impressive, the meme stock actually shot up significantly higher in early 2021, having gained nearly 2,700% year-to-date at one point in mid-June. Shares have crumbled by 92% since then and have shown little evidence that they’re poised for another breakout any time soon.
AMC Entertainment Holdings, Inc. (NYSE:AMC) has struggled in the wake of the pandemic, with movie attendance still skulking below pre-pandemic levels. The company did have its best first quarter since 2019 this year, with revenue growing by 21%. The quarter was also the second-straight in which it posted positive adjusted EBITDA, the first time it’s done that since just prior to the pandemic. Nonetheless, the company has a long road ahead of it to win back investors given its recent cash burn woes and how heavily it’s diluted its equity to stay afloat.
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