Popular trading app Robinhood has not fared quite as well as a publicly traded company. Almost a year ago, the stock debuted on the Nasdaq for $38.00 a share. On Friday, it closed at $8.00.
That won’t stop users from scrolling through their phones to grab stocks of their favorite companies during the 2022 bear market. In fact, the list of the most popular names in Robinhood accounts hasn’t changed much.
Today’s Robinhood-100 still features a hodgepodge of stable mega-caps like Apple, ‘as-beens’ like Peloton, and ‘possible’s’ like Context Logic and Sundial Growers. It’s a lineup that is strikingly similar to 12 months ago.
We know that Robinhooders have stayed true to their preferred positions during the market downturn. But what about Wall Street?
Given the largely speculative nature of the Robinhood-100 list, it’s not often that fundamentally focused research firms agree with the largely social media-driven retailer. Still, the Street and Robinhooders are clearly on board with the growth potential of these three names.
What is the most popular stock on Robinhood?
Microsoft Corporation (NASDAQ: MSFT† sits atop the Robinhood-100, the most owned by a growing army of youthful investors. The world’s second largest company by market capitalization is also a heavy Street favorite.
In the past three months, more than two dozen salespeople have called: Microsoft a buy. Only one has maintained a neutral stance and none have been bold enough to turn bearish.
Why would they? With technology hopelessly out of favor of late, the software maker’s shares are down more than 20% from their November 2021 peak.
On top of overwhelmingly bullish Street sentiment, recent Microsoft price targets are well into the $300 range. Earlier this month, two companies, Wells Fargo and Credit Suisse, put $400 targets on the stock, marking a 50% increase and set a new record.
Analysts have consistently called Microsoft’s withdrawal a buying opportunity. That’s mainly because the long-term growth prospects in the Azure cloud business remain strong. With digital transformation in full swing in many sectors, demand for cloud infrastructure and apps is expected to drive double-digit earnings growth in the coming years. An aggressive push into the gaming market via the Activision Blizzard buyout should also hold the growth (and Robinhood traders).
NIO Inc. †NYSE: NIO† is an early frontrunner for this summer’s biggest hit. The Chinese electric vehicle (EV) manufacturer has more than doubled its bottom from last month and has some serious momentum on its side. It also has Wall Street on its side, not to mention being a top 20 most popular Robinhood stock.
A perfect 12 for 12 analysts have given NIO a buy recommendation in the past 3 months with no hold or sell. In the past few weeks alone, eight of those analysts have reiterated their optimistic view. Last week, Mizuho Securities became the latest group to offer a bright picture of NIO — and a $48 price target that suggests the stock may double again.
It’s easy to see why retailers and the street are optimistic about NIO’s growth potential. After all, the company has a leading position in the world’s largest EV market. Last year, China accounted for more than half of global electric vehicle sales.
This year, NIO has been slowed down by renewed Covid lockdowns and supply chain disruptions, but there are signs of improvement. Despite the recent outbreaks, vehicle deliveries increased by 12% in May 2022. And with restrictions easing and strong demand, management said it plans to accelerate delivery of its premium smart electric sedans and SUVs in the second half of the year.
Earlier this month, Deutsche Bank noted that NIO is on the cusp of a “robust product supercycle” where deliveries could triple by the end of the year. Based on the momentum in the stock, a triple from the bottom could happen a long time ago.
What is Robinhood’s favorite drug stash?
Catalyst Pharmaceuticals, Inc. †NASDAQ: CPRX† is the most commonly held care share among Robinhooders. The biotech is even more popular than the coronavirus vaccine mainstays Pfizer and Moderna. Why?
For starters, Catalyst is a bit of an underdog story that emerged from the depths of the pennystock territory to an all-time high of $9 in April 2022 as the broader market struggled. And given the low share price, there seems to be more gains compared to the more established, more expensive Pfizer and Moderna.
In addition, the company is seeing huge adoption of its lead product Firdapse, a treatment for a rare disease called Lambert-Eaton Myasthenic Syndrome (LEMS). The drug, which is also being developed for other neuromuscular conditions, received a major boost from a March 2022 FDA ruling against a rival drug that paved the way for the run-up to an all-time high.
Aside from Firdapse, Catalyst’s development of a generic version of infantile spasm therapy Sabril in partnership with Endo Pharmaceuticals could lead to reduced reliance on their lead program and increased sales. This along with a pipeline focused on treatments for other rare diseases has the most recently issued price targets off the street at $12, representing a 77% increase.