In this article, we will discuss the 8 Best Robinhood Stocks to Buy According to Analysts.
Morgan Stanley Wealth Management has announced quarterly retail investor pulse survey results. The majority of investors’ views were bullish. Investors began the year on the bullish (58%) note, in line with last quarter (59%). Furthermore, the results also revealed that around 2 out of 3 investors (64%) saw the market rising by the end of the quarter.
What’s On Retail Investors’ Minds?
Morgan Stanley Wealth Management’s survey revealed that inflation has been the top worry for investors’ portfolios at 45%, almost in line with the last quarter at 46%, with market volatility at 24% coming out to be the second. Notably, the concerns related to the new administration declined 13 percentage points since the last quarter. Furthermore, around 3 out of 5 (59%) of investors see that the broader US economy remains healthy. Chris Larkin, Managing Director, Head of Trading and Investing, E*TRADE from Morgan Stanley, stated that with any new administration taking power, the potential policy changes can bring uncertainty in the broader markets. That being said, investors are optimistic and resilient amid a soft start to the new year.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
Current Trends in Retail Investing
Retail outflows from the US equities increased to ~$4 billion over the previous 2 weeks due to the uncertainties related to tariffs and increased economic concerns, which resulted in a strong pullback in the S&P 500, reported CNBC, while quoting data from Barclays. Rob Austin, director of research at Alight Solutions, says that if people tried to buy the dip, there would have been evidence hinting at the increased buying of the large-cap equities. On the contrary, people are selling large-cap equities. Austin believes that this seems to be a bit of a reactionary trading activity.
CNBC, while highlighting the comments made by Venu Krishna (Barclays head of U.S. equity strategy), reported that there remains sufficient capacity for the retail investors to further disengage from the broader equity market. Notably, Barclays’ proprietary euphoria indicator exhibited that the sentiments are down to the levels that were seen around the time of the US election back in November, but remain elevated by historic standards. The increased sell-off came as American households remained more sensitive than ever to the significant volatility in the broader equity markets.
Amidst these trends in retail investing, let us now have a look at the 8 Best Robinhood Stocks to Buy According to Analysts.
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Our Methodology
To list the 8 Best Robinhood Stocks to Buy According to Analysts, we sifted through several online rankings to shortlist the stocks trending on Robinhood. We also took help from the Robinhood Investor Index. Next, we chose the ones that analysts see significant upside to. Finally, the stocks were arranged in ascending order of their average upside potential, as of March 17. We also mentioned the hedge fund sentiment around each stock, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
8 Best Robinhood Stocks to Buy According to Analysts
8. Palantir Technologies Inc. (NASDAQ:PLTR)
Average Upside Potential: ~11.05%
Number of Hedge Fund Holders: 64
Palantir Technologies Inc. (NASDAQ:PLTR) is engaged in building and deploying software platforms for the intelligence community to help in counterterrorism investigations and operations. William Blair analyst Louie DiPalma reiterated a “Market Perform” rating on the company’s stock after the recent announcement of a partnership with Databricks. The partnership is expected to provide an open and scalable data architecture combining Palantir Technologies Inc. (NASDAQ:PLTR)’s powerful Ontology System with Databricks’ processing scale and industry-leading data and Al platform. The analyst believes that the partnership leverages the large total addressable market and increasing demand for Al data analytics solutions.
Additionally, Palantir Technologies Inc. (NASDAQ:PLTR)’s recent customer acquisition announcements, consisting well-established firms such as Qualcomm and Epirus, hint at the continued commercial momentum. Elsewhere, Loop Capital Markets analyst Mark Schappel reaffirmed a “Buy” rating on the company’s stock. The analyst remains confident about Palantir Technologies Inc. (NASDAQ:PLTR)’s future. The company continues to emerge as a key player in enterprise Al, says Schappel. The analyst opines that the enterprise Al sector remains in the growing phase in which small-scale pilot programs have been expanding into full-scale production.
Baron Funds, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“Two software stocks that the Fund did not own, Palantir Technologies Inc. (NASDAQ:PLTR) and AppLovin Corporation, each gained more than 100% and accounted for 52% of the Benchmark’s gain during the quarter. At year end 2024, Palantir was valued at approximately 200 times its expected 2024 earnings, while AppLovin was valued at 80 times. The market cap of each exceeded $100 billion, and the two stocks represented nearly 8% of the Index. Neither company met our criteria for investment. The total impact on relative performance from Palantir and AppLovin was about 7 times higher than we have seen historically for two securities that are unique to the Benchmark, showing just how unparalleled the event was and something that we believe is unlikely to be repeated.”
7. Netflix, Inc. (NASDAQ:NFLX)
Average Upside Potential: ~14.3%
Number of Hedge Fund Holders: 144
Netflix, Inc. (NASDAQ:NFLX) entertainment services. MoffettNathanson upped the company’s stock to “Buy” from “Neutral” with a price objective of $1,100, up from $850. As per the firm, its ability to monetize the engagement remains underappreciated. The upgrade stemmed from Netflix, Inc. (NASDAQ:NFLX)’s strong user engagement, which can fuel future profitability. As per the firm, the company remains well-placed to generate healthy advertising revenue over the upcoming years, aiding margin expansion. This is expected to stem from a combination of ad revenue growth and the growth in subscription revenues.
Elsewhere, Bernstein analysts maintained an “Outperform” rating on Netflix, Inc. (NASDAQ:NFLX)’s stock, with a steady price target of $1,200.00. As per Laurent Yoon, an analyst at the firm, the company’s revenue growth, mainly driven by subscriber additions, continues to outpace the content spending increases. Yoon believes that Netflix, Inc. (NASDAQ:NFLX)’s fundamental business drivers are strong and can support continued growth. The analyst’s rating stems from the company’s ability to navigate through short-term challenges and use its healthy subscription growth as well as margin expansion for long-term success.
RiverPark Advisors, an investment advisory firm and sponsor of the RiverPark family of mutual funds, released its Q4 2024 investor letter. Here is what the fund said:
“Netflix, Inc. (NASDAQ:NFLX): NFLX was a top contributor in the fourth quarter powered by a 3Q earnings report that included stronger-than-expected revenue and operating income, solid subscriber additions, and positive forward commentary. Anti-password sharing and ad tier initiatives continue to drive subscriber growth while improving revenue per user trends, from recent price increases, drive margin expansion. The company was optimistic about future revenue growth, margin expansion, free cash flow generation and future return of capital programs.
The recent re-acceleration of subscriber growth, plus price increases on premium memberships and a stabilization of content investments, should position the company for low double digit annual revenue growth over the next few years while driving operating margin to more than 25%. We also believe that the stabilization of content spend should allow the company to continue to scale its free cash flow.”
6. Apple Inc. (NASDAQ:AAPL)
Average Upside Potential: ~18.9%
Number of Hedge Fund Holders: 166
Apple Inc. (NASDAQ:AAPL)’s unique ecosystem offers significant opportunities for leveraging AI advancements. Its control over hardware and software offers it an advantage in implementing AI features that are deeply integrated and optimized for the devices. Apple Inc. (NASDAQ:AAPL)’s large installed base of devices offers a significant platform for rolling out AI features. This scale enables the company to gather significant amounts of data that can be utilized to train and improve AI models. Its emphasis on on-device AI processing remains in line with the privacy-centric approach and can act as a differentiating factor with AI becoming more prevalent in the broader consumer technology space.
Apple Inc. (NASDAQ:AAPL)’s investments in chip design, mainly its custom silicon, place it favorably to develop specialized AI hardware allowing more advanced features while, at the same time, maintaining energy efficiency. This can result in AI capabilities uniquely customized to the company’s devices and ecosystem. Apple Inc. (NASDAQ:AAPL)’s healthy position in wearables and home devices offers opportunities related to AI integration beyond smartphones.
Columbia Threadneedle Investments, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“The fund maintained a position in Apple Inc. (NASDAQ:AAPL) throughout the quarter through the release of the company’s new iPhone 16 in September. Company leaders were excited about the release of the new model, as this is the first model that will feature enhanced AI capabilities through the Apple Intelligence features. Sales for the first few weeks in October and November trailed behind year over year sales from the iPhone 15, as availability of Apple Intelligence was not compatible with all iPhone models. Apple announced a partnership with OpenAI that has allowed the integration of ChatGPT into the Apple ecosystem, separate from the core Apple Intelligence features. This partnership highlights continued progress from Apple to introduce AI capabilities into its products and we expect the iPhone 17 to have even more expansive AI capabilities, increasing potential demand for the new model that is on track to be released in 2025.”
5. Eli Lilly and Company (NYSE:LLY)
Average Upside Potential: ~23.4%
Number of Hedge Fund Holders: 115
Eli Lilly and Company (NYSE:LLY) discovers, develops, and markets human pharmaceuticals. Moody’s Ratings believes that the company has healthy scale and solid competitive position, higher profit margins, and strong cash flow. Furthermore, rapidly growing products such as Mounjaro, Zepbound, Verzenio, Ebglyss, and Kisunla, are expected to sustain strong growth. The firm expects Eli Lilly and Company (NYSE:LLY) to maintain conservative financial policies over time. Analyst Nico Chen from DBS maintained a “Buy” rating on the company’s stock, keeping the price objective at $900.00. The rating is backed by a combination of factors demonstrating its promising growth prospects. One critical reason is its strong pipeline.
Furthermore, the analyst lauded Eli Lilly and Company (NYSE:LLY)’s existing products in the weight-loss segment, like Mounjaro and Zepbound, which have contributed significantly to its revenue. For Q4 2024, worldwide Mounjaro revenue rose 60% to $3.53 billion and the U.S. Zepbound revenue came in at $1.91 billion against $175.8 million in Q4 2023. Also, the healthy market performance of such drugs was strengthened by the clinical superiority over the competitors, says the analyst. Elsewhere, Citi maintained a “Buy” rating with a price objective of $1,190.00.
Parnassus Investments, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“Eli Lilly and Company (NYSE:LLY)stock declined following worse-than-expected third quarter results for its weight-loss drug segment. We initiated our position partway through the quarter, after the drawdown and in time for a partial rebound, and our average underweight for the quarter led to a relative contribution.
In the Health Care sector, we added drugmaker Eli Lilly, which has an exceptional GLP-1 franchise and a strong track record of innovation, which position the company for long-term growth. A rare revenue miss and President-elect Trump’s health secretary nomination sparked a sell-off, providing a window of opportunity to gain exposure to the drugmaker’s attractive product suite and pipeline at an attractive valuation.”
4. Microsoft Corporation (NASDAQ:MSFT)
Average Upside Potential: ~28.6%
Number of Hedge Fund Holders: 317
Analyst Bradley Sills from Bank of America Securities reiterated a “Buy” rating on Microsoft Corporation (NASDAQ:MSFT)’s stock, keeping a price objective of $510.00. The rating is backed by its strong performance and future growth potential. As per the analyst, the expected growth in Azure, fueled by Al workloads as well as large cloud deals, hints at the favorable outlook for the coming quarters. Microsoft Corporation (NASDAQ:MSFT)’s strategic emphasis on Al, mainly via Microsoft 365 Copilot, can fuel strong revenue growth, reinforcing the company’s position as a leader in applications and infrastructure. Therefore, the analyst’s confidence in the company’s ability to capitalize on the expanding Al market aids the rating.
Elsewhere, D.A. Davidson upped Microsoft Corporation (NASDAQ:MSFT)’s stock to “Buy,” increasing the price objective to $450 from $425. The analyst highlighted a more disciplined capital expenditure strategy as well as healthy positioning among several other mega-cap technology firms. The firm’s team opines that the company has pivoted to a more rational capex strategy. Therefore, Microsoft Corporation (NASDAQ:MSFT) streamlined the capex approach, enhancing margins and return on invested capital.
Mairs & Power, an investment advisor, released the Q4 2024 investor letter. Here is what the fund said:
“Unlike the dot-com companies that operated at the turn-of-the-century, many of today’s technology companies are established businesses with significant cash flows. We have argued, and continue to argue, that many of these investments are perfectly aligned with our investments process in that they embody durable competitive advantages, above-average growth prospects, and excellent management teams.
A perfect example is Microsoft Corporation (NASDAQ:MSFT), which has grown to become the largest holding in the Growth Fund. Microsoft has a near monopoly on the office software productivity market with its Microsoft Office Suite. The company’s Azure platform is a leader in cloud computing and has been steadily gaining share. Thanks to its Office and Azure products, the company is deeply embedded within many enterprise IT ecosystems. Therefore, it should be well-positioned to expand its presence within its customer base, as it rolls out premium-price AI solutions. The company is not resting on its laurels and plans on spending an astounding $80 billion in 2025 to build out AI data centers.”
3. Meta Platforms, Inc. (NASDAQ:META)
Average Upside Potential: ~28.7%
Number of Hedge Fund Holders: 261
Analyst Doug Anmuth from J.P. Morgan maintained a “Buy” rating on Meta Platforms, Inc. (NASDAQ:META)’s stock with a price objective of $725.00. The analyst’s rating is backed by a combination of factors that include the company’s healthy financial performance and strategic long-term investments. Meta Platforms, Inc. (NASDAQ:META)’s significant investments in capital expenditures and infrastructure can act as strategic advantages that can yield benefits over time. For FY 2025, the company expects its capital expenditures to be $60 billion – $65 billion. Furthermore, the company’s focus on advancements in artificial intelligence and the Metaverse remains in line with the critical technological trends, which can fuel future growth.
Meta Platforms, Inc. (NASDAQ:META)’s strong focus on enhancing user experience and its healthy competitive position in the digital advertising space strengthens its prospects. The AI-driven services can result in new revenue streams in the enterprise market. The services can span from AI-powered customer service solutions to advanced analytics tools for businesses, enabling diversification of Meta Platforms, Inc. (NASDAQ:META)’s revenue over and above traditional advertising.
Rowan Street Capital, an investment management company, released the Q4 2024 investor letter. Here is what the fund said:
“Meta Platforms, Inc. (NASDAQ:META): Investment Initiated: April 2018: Internal Rate of Return (IRR*): 22% *IRR represents the annualized rate of return on an investment, accounting for the timing and magnitude of cash flows over the holding period.
For META, our 22% IRR aligns closely with the company’s compounded growth in earnings per share (EPS) and free cash flow per share during the 6 years holding period.
Looking ahead, Meta is expected to grow its revenues, earnings, and free cash flow per share at mid-teens rates over the next two years. There’s a good possibility that it could exceed these estimates, considering the breadth of growth initiatives currently in place, such as advancements in Al, monetization of Reels, expansion into business messaging, and the ongoing development of the metaverse…” (Click here to read the full text)
2. The Walt Disney Company (NYSE:DIS)
Average Upside Potential: ~30.8%
Number of Hedge Fund Holders: 108
The Walt Disney Company (NYSE:DIS) operates as an entertainment company. JPMorgan reiterated an “Overweight” rating on the company’s stock, maintaining a price objective of $130.00. The firm’s analysis showcased the healthy role of the company’s Parks & Experiences division in its revenue and operating income. As per the firm, this segment is projected to remain a critical contributor to The Walt Disney Company (NYSE:DIS)’s financials, despite continuous expansion of its Direct-to-Consumer (DTC) sector.
The analysts lauded the uniqueness of the company’s parks in the media landscape, demonstrating the ability to establish interactions with IP and franchises with the help of rides, merchandise, and characters. The firm highlighted a bullish stance on The Walt Disney Company (NYSE:DIS)’s long-term earnings potential of its Parks & Experiences business, thanks to the investments in new capacities, cruises as well as pricing strategies. JPMorgan’s report highlighted the company’s operational strategies, showcasing that The Walt Disney Company (NYSE:DIS) has significant control over its success, amidst the factors impacting the consumer discretionary businesses.
Meridian Funds, managed by ArrowMark Partners, released its Q2 2024 investor letter. Here is what the fund said:
“The Walt Disney Company (NYSE:DIS) operates a diversified entertainment business with theme parks, media networks, and streaming services. We own Disney because we believe its strong brand, valuable IP, and expanding streaming offerings will drive sustainable long-term growth. The company’s stock, however, underperformed in the quarter due to concerns about a slowdown in growth at its theme park division. While park revenue still grew by 10% year-over-year, management’s commentary suggested a moderation in post-pandemic demand and rising costs, leading to a disappointing outlook for park operating income in the second half of the year. This overshadowed the positive news that the company’s streaming segment, driven by strong subscriber growth at Disney+, reached profitability ahead of schedule. We held our position and will continue to monitor the performance of the theme park division.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Average Upside Potential: ~41.7%
Number of Hedge Fund Holders: 339
Moody’s Ratings changed Amazon.com, Inc. (NASDAQ:AMZN)’s outlook to positive from stable, reflecting the company’s continued improvement in operational performance as it managed to generate significant FCF in a bid to support acceleration in capital spending while also maintaining low leverage and increased cash balances. Amazon.com, Inc. (NASDAQ:AMZN) has a powerful global brand, which remains synonymous with online retail, and possesses the strength and profitability of Amazon Web Services, which is the market segment leader in the cloud computing market. Moody’s believes that the company remains well-placed to support the increased capital investment with internal cash flow as it ramps up its capital spending on AWS and its generative Artificial Intelligence investments.
Amazon.com, Inc. (NASDAQ:AMZN)’s investments in AI technology can fuel strong growth and efficiency improvements throughout its various business segments. In e-commerce, AI could enhance personalization, improve demand forecasting, and can also optimize logistics, resulting in better customer experiences and lower costs. Furthermore, for AWS, AI innovations can result in the development of new, high-value cloud services, bringing in more enterprise customers as well as premium pricing. Also, in advertising, AI-powered tools can result in improved ad targeting and effectiveness.
Diamond Hill Capital, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“Among our top individual contributors in Q4 were General Motors and Amazon.com, Inc. (NASDAQ:AMZN). Internet retail and cloud infrastructure company Amazon continues taking share in non-discretionary categories. Retail margins also increased in the quarter, particularly international margins. Amazon Web Services’ (AWS) revenue growth accelerated in the quarter, and, despite increased AI-related capital expenditures, margins improved to all-time highs.”
While we acknowledge the potential of AMZN as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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