8 Robinhood Stocks Investors Are Buying in Q1

Robinhood Markets Inc.'s (HOOD) trading app generated tremendous buzz on Wall Street in 2021. Some of its users fueled the "meme" stock trading phenomenon that triggered several massive short squeezes and even drove Robinhood to implement controversial temporary trading restrictions. After going public in September, Robinhood reported 22.4 million net cumulative funded accounts in its first public earnings report, up 97% from a year ago. The median age of Robinhood users is just 31, according to the company. The relatively inexperienced trader base had some huge hits and misses in 2021. As 2022 kicks off, here are the eight most popular Robinhood stocks today.

Electric vehicle startups got a lot of attention in 2021, but legacy Detroit automaker Ford's stock left many of its new competitors in the dust. Ford finished the year up more than 130%, generating huge returns for Robinhood investors and making it one of the 10 best performers of 2021 among S&P 500 stocks. Ford plans to invest $30 billion in vehicle electrification by 2025. Robinhood investors likely have high hopes for its Mustang Mach-E EV, F-150 Lightning EV and other electric models, and Ford trades at a much more attractive valuation than leading EV stocks.

Apple has been one of the most profitable, consistent performers in the market in recent decades, and it finished 2021 strong to close out yet another great year for Apple investors. In the most recent quarter, Apple reported nearly a 50% increase in iPhone revenue compared to a year ago, even amid supply chain disruptions that cost Apple $6 billion in revenue in the quarter. Apple unveiled its new generation of iPhone 13 models in September, and analysts expect another big iPhone upgrade cycle in 2022. Apple also spent $24 billion on dividends and buybacks in its fiscal fourth quarter.

Robinhood users are going all-in on the auto industry of the future, and Tesla has a huge first-mover advantage in EVs. Tesla got off to a hot start to 2022 after reporting 308,500 vehicle deliveries in the fourth quarter compared to analyst estimates of only 267,000. Despite that advantage, the company will face unprecedented EV competition in 2022. In addition, TSLA stock bears point out the stock trades at a steep price-sales ratio of 24.6. Robinhood investors are seemingly undeterred and are betting Tesla and CEO Elon Musk will continue to disrupt the auto and tech worlds.

AMC was one of the most controversial top-performing stocks of 2021. The company narrowly avoided bankruptcy in early 2021 after generating a $4.59 billion net loss in 2020. Groups of stock traders on Reddit and other social media platforms piled into AMC, triggering a massive short squeeze and making AMC one of the most popular "meme" stocks of the year. Online traders may have helped save AMC for now, but the company is still losing money, is buried under $5.4 billion in debt and has been aggressively diluting shares via a series of equity offerings.

Sundial Growers and other cannabis stocks have tremendous long-term upside potential, especially if the U.S. legalizes marijuana on a federal level. Unfortunately for Robinhood users, U.S. cannabis reform efforts made little progress in 2021 despite Democrats controlling the White House and both houses of Congress. Meanwhile, high-risk cannabis stock Sundial continues to battle for market share in a highly competitive Canadian market. Sundial reported just $11.3 million in revenue last quarter but has a $1.27 billion market capitalization. Sundial's high 35.2 price-sales ratio suggests Robinhood users aren't the only ones with high expectations.

Microsoft is one of the biggest success stories among legacy tech giants that have completely reinvented themselves. Microsoft isn't the type of flashy, high-growth tech stock that will double in a matter of months, but it quietly outperformed the S&P 500 in 2021 and has been a remarkably consistent cash cow for investors. Last quarter, Microsoft reported 22% revenue growth, including 31% growth in its Intelligent Cloud segment. Microsoft is also boosting margins in its productivity and business processes unit by raising Office prices as well. Finally, Microsoft's board recently approved a new $60 billion share buyback program.

Amazon continues to grow and monetize its massive user base, and it is also expanding into additional high-growth businesses such as advertising. Amazon shares have uncharacteristically lagged behind the market in the past year, and they took a big hit in the fourth quarter after the company reported large earnings and revenue misses. Still, revenue was up 15% in the quarter, including 39% growth in its Amazon Web Services cloud computing business. Amazon also reported more services revenue than online retail sales for the first time ever. Robinhood users seem to see Amazon's recent weakness as a buying opportunity.

The pandemic crushed Disney's theme parks, cruise lines, and TV and film production businesses in 2020, but it was a major tail wind for its Disney+ streaming service, which launched in November 2019. Disney's legacy businesses recovered in 2021, while its direct-to-consumer businesses continued to thrive. As of the fiscal fourth quarter, Disney+ had 118.1 million global subscribers, the company's ESPN+ service had 17.1 million subscribers and its Hulu service had another 43.8 million subscribers. Robinhood investors are hoping Disney's stock can regain its magic in 2022 after a 13% drop over the past 12 months.

• Ford Motor Co. (F)
• Apple Inc. (AAPL)
• Tesla Inc. (TSLA)
• AMC Entertainment Holdings Inc. (AMC)
• Sundial Growers Inc. (SNDL)
• Microsoft Corp. (MSFT)
• Amazon.com Inc. (AMZN)
• Walt Disney Co. (DIS)