In this article, we will take a look at the 11 Robinhood stocks with biggest upside.
The stock market gains seen this year despite rising inflation, rate hikes and recession fears have emboldened market bulls. Many now believe the next year would be a spectacular one for the stock market and stocks would touch new highs. In July, Ed Yardeni from Yardeni Research said that a soft landing is now inevitable and the broader market is now on track to see record gains in 2024. Yardeni said in his note that the bull market that started in October 2022 would last until at least the end of 2023. He said at the time that he was seeing S&P 500 somewhere around 4,800 and 5,400 over the next 18 months. Yardeni, did not however, rule out the chances of a broader correction. He said that the S&P 500 is indeed hot and the NASDAQ is even hotter. However, he said that any meltdown in stocks would be a temporary correction rather than the start of a bear market which many of the Wall Street analysts have been warning about ever since the bull market started. Yardeni said that some analysts are too pessimistic. He sees S&P 500 earnings to hit $270 per share by 2025.
The $75 Trillion Reason Behind Market Optimism
Yardeni at the time said that the chances of a soft landing and a disinflationary scenario were growing. His predictions are yet to be validated since investors are still in a wait-and-see mode. Inflation is still high but showing signs of settling down and labor market is also showing signs of cooling. In his July note, Yardeni set the odds of a recession over the next two and a half years at just 25%. Part of the reason why Yardeni was optimistic on the market was his belief that baby boomers have a whopping $75 trillion in wealth in savings, liquid assets, real estate, and other investments. Yardeni believes consumer spending will remain strong. He thinks we won’t face a broader recession and instead, certain parts of the economy would face contracting while other areas will keep expanding.
However, Goldman Sachs does not agree with the $75 trillion reason. In a report, Goldman Sachs talked about the risks to the US economy in 2024 and said that US household savings are dwindling fast.
“Economists now estimate household savings to be around $350 billion, which could run out by the first quarter of 2024. This coincides with the reinstatement of student loan payments, which may dampen spending, and an aggressive build-up of credit card balances, with interest costs that have soared to historical highs of more than 20%.”
Goldman also said that US government spending might slow down in the near future amid debt ratings downgrades. US government spending will face increased scrutiny in the future which could hamper spending on major government projects. If spending from the government slows down, the trickle-down effect could cause a wider slowdown in money circulation.
JPMorgan also voiced similar concerns in a latest report. The bank’s analysts said that “cracks” have started to appear in the labor market which was a bright spot throughout the market storm. Data shows that the rate of job openings is slowing down and baby boomers are permanently leaving the workforce. JPMorgan said the cooling labor market could be a sign that the economy is entering a recession.
“Overall, the U.S. economy should continue to grow at a tempered pace from here, and while a recession is not guaranteed, a slower-moving economy will be increasingly sensitive to shocks. There remain risks on the horizon, most notably weakness in commercial real estate, that could push this slow-moving economy into a recession within the next year.”
Photo by Ruben Sukatendel on Unsplash
Our Methodology
For this article, we conducted a broader survey of some of the top financial websites and picked 11 Robinhood stocks these top websites believe have the biggest upside potential. We used a consensus opinion-based approach, picking only the stocks that appeared repeatedly during our research. The list is ranked in ascending order of the number of hedge fund investors. We gauged hedge fund sentiment for each stock using Insider Monkey’s database of 910 hedge funds. Some notable names in the list include Microsoft Corporation (NASDAQ:MSFT) and Amazon.com, Inc. (NASDAQ:AMZN).
Robinhood Stocks with Biggest Upside
11. Genius Group Limited (NYSE:GNS) -No IM Link
Number of Hedge Fund Holders: N/A
Education services and tools company Genius Group Limited (NYSE:GNS) ranks 11th in our list of the best Robinhood stocks to buy according to the media. In June Genius Group Limited (NYSE:GNS) announced results for full-year 2022. FY GAAP EPS came in at -$2.44. Revenue in the period jumped about 120% year over year to $18.2 million.
In May, Genius Group Limited (NYSE:GNS)’s shareholders approved the company’s planned spin-off of its hospitality unit, Entrepreneur Resorts.
10. T Stamp Inc. (NASDAQ:IDAI)
Number of Hedge Fund Holders: N/A
Identity authentication software company T Stamp Inc. (NASDAQ:IDAI) is a penny stock that many believe has upside potential. T Stamp Inc. (NASDAQ:IDAI) recently announced that it has received a Notice of Issuance from the U.S. Patent Office, along with a Notice of Allowance, for two patents titled “Systems and Processes for Lossy Biometric Representation”.
9. Verb Technology Company, Inc. (NASDAQ:VERB)
Number of Hedge Fund Holders: 1
Video-based sales platform company Verb Technology Company, Inc. (NASDAQ:VERB) is making moves after the company entered into a partnership with TikTok. Verb Technology Company, Inc. (NASDAQ:VERB) said its platform users would be able to stream on TikTok.
Several top finance websites we surveyed believe Verb Technology Company, Inc. (NASDAQ:VERB) has a strong upside potential despite volatility and risks.
As of the end of the second quarter of 2023, just one hedge fund had stakes in Verb Technology Company, Inc. (NASDAQ:VERB), according to Insider Monkey’s database of over 900 hedge funds.
Like Microsoft Corporation (NASDAQ:MSFT) and Amazon.com, Inc. (NASDAQ:AMZN), VERB is one of the stocks with upside potential.
8. Exela Technologies, Inc. (NASDAQ:XELA)
Number of Hedge Fund Holders: 4
Business process automation company Exela Technologies, Inc. (NASDAQ:XELA) is one of the Robinhood stocks financial media believes has upside potential. So far this year Exela Technologies, Inc. (NASDAQ:XELA) has lost 75% in value. The company’s revenue in the second quarter increased by about 2%.
Exela Technologies, Inc. (NASDAQ:XELA)’s executive chairman Par Chadha said during a latest earnings call that the company is going through a rough patch. Answering a question, the executive said:
“What I referred to was, when we were going through a rough patch, we were in-line to win some of the bid, some of the RFPs, but because of the rough patch, we were not able to win those. The business climate still remains challenging, but however, the business of process automation, as I think I mentioned that in couple of my other calls. It’s a little contrarian, meaning people when they reduce our customers, when they reduce their headcount, they look for variable costs, which means companies like ours benefit from providing at scale services, during the periods of uncertainty in the macro environment. So, I think we are going to see some good wins to help us, grow our business. But our fundamental value proposition, obviously, is driving stability, recurring revenue, and as well as very high renewal rate.”
7. Tupperware Brands Corporation (NYSE:TUP)
Number of Hedge Fund Holders: 9
Home Products company Tupperware Brands Corporation (NYSE:TUP) ranks 7th in our list of the best Robinhood stocks with the biggest upside potential according to the media.
As of the end of the second quarter of 2023, 9 hedge funds tracked by Insider Monkey had stakes in Tupperware Brands Corporation (NYSE:TUP). In April this year Tupperware Brands Corporation (NYSE:TUP) shared doubts about its ability to remain in operation amid financial issues. But the stock jumped in August after the company reached a debt restructuring deal with its lenders.
Miller Value Deep Value Strategy made the following comment about Tupperware Brands Corporation (NYSE:TUP) in its Q4 2022 investor letter:
“During the quarter we only had one detractor, Tupperware Brands Corporation (NYSE:TUP) whose share price was down more than 30%. The company is in a midst of a multi-year transformation focused on enhancing their global direct selling business, expanding their omnichannel presence, exiting non-core assets, rolling out new product innovation and enhancing the company technology and supply chain. Tupperware’s revenues have been adversely impacted by significant market weakness in Europe and China along with the company experiencing weaker volumes from implementing recent price increases. Management has undertaken a $100M cost reduction program and with the recent price actions beginning to offset commodity price pressures, the company should see profitability and cash flow generation improve over the coming year. In addition, management continues to make incremental investments in the business to further expand their omni-channel efforts and modernize their infrastructure. While it will take longer for the company to complete the turnaround plan, we believe the current share price has limited value for successfully completing the transformation.”
6. SoundHound AI, Inc. (NASDAQ:SOUN)
Number of Hedge Fund Holders: 9
SoundHound AI, Inc. (NASDAQ:SOUN) is an audio and speech recognition systems company. SoundHound AI, Inc. (NASDAQ:SOUN) is one of the stocks that are gaining momentum amid the AI boom this year. SoundHound AI, Inc. (NASDAQ:SOUN) is up about 77% year to date through September 8.
As of the end of the second quarter of 2023, 9 hedge funds tracked by Insider Monkey had stakes in SoundHound AI, Inc. (NASDAQ:SOUN). Like Microsoft Corporation (NASDAQ:MSFT) and Amazon.com, Inc. (NASDAQ:AMZN), SoundHound AI, Inc. (NASDAQ:SOUN) is gaining ground due to the AI boom.
The company’s management talked about SoundHound AI, Inc. (NASDAQ:SOUN) in its latest earnings call:
“And with Smart Answering, we’re just getting started, allowing any business to handle nearly any inbound customer inquiry using automated and customizable voice assistant. Using generative AI to automatically incorporate data from the business website in its AI knowledge base, Smart Answering provides quick and easy onboarding, allowing the customers to test it out within minutes and be live on the same day. The service can handle multiple calls at once 24/7 and continuously filters out spam calls, saving hours of wasted time for any business. It can also provide convenient SMS responses in addition to verbal answers and it can seamlessly transfer to any employee of the business, if necessary. Smart Ordering and Smart Answering are complemented by our visually enhanced SoundHound Dynamic Interaction, which is our multimodal full-duplex interface for kiosks, drive-thru or any device with a screen.
Dynamic Interaction is unmatched as a breakthrough and we believe will mark the next generation of digital assistance and AI interfaces, which allows input via speech or touch and provides real-time responses via visual and audio with no turn taking or wake words. I encourage everyone to visit our website and watch the demo of Dynamic Interaction. We consistently get a wow response anytime someone has introduced this product for the first time. When we attended the National Restaurant Association Conference this year, Dynamic Interaction stole the show. Trade Media selected Dynamic Interaction as one of the top things to see on the shop floor among all vendors in all categories, so not just technology. A typical reaction from our target customers is not just if they’re interested in SoundHound Dynamic Interaction, but how can we go live with this as fast as possible.”
5. Applied Optoelectronics Inc. (NASDAQ:AAOI)
Number of Hedge Fund Holders: 10
Fiber optics networking products company Applied Optoelectronics Inc. (NASDAQ:AAOI) ranks 5th in our list of the best Robinhood stocks to buy. Applied Optoelectronics Inc. (NASDAQ:AAOI) is already up a whopping 400% over the past one year but analysts believe it has more room to run. Recently, B. Riley Securities upgraded the stock to Buy from Neutral, citing improving demand and margins. The firm upped its price target for Applied Optoelectronics Inc. (NASDAQ:AAOI) to $11.50 from $2.50.
As of the end of the second quarter of 2023, 10 hedge funds tracked by Insider Monkey had stakes in Applied Optoelectronics Inc. (NASDAQ:AAOI).
4. Nokia Corporation (NYSE:NOK)
Number of Hedge Fund Holders: 15
Nokia Corporation (NYSE:NOK) ranks 4th in our list of the best Robinhood stocks with upside potential. Nokia Corporation (NYSE:NOK) remains a behemoth in the telecom and connectivity segment and the company is also expanding its home connectivity offerings.
Insider Monkey’s database of 910 hedge funds shows that 15 hedge funds had stakes in Nokia Corporation (NYSE:NOK).
Artisan International Value Fund made the following comment about Nokia Oyj (NYSE:NOK) in its second quarter 2023 investor letter:
“Nokia Oyj (NYSE:NOK) is the world’s third-largest provider of telecommunications equipment. The company sells its products to service providers, such as AT&T and Vodaphone. While we have held the stock, new management has simultaneously improved competitiveness and reduced costs—a remarkable achievement that has resulted in improved growth and profitability. Despite that, the share price has declined, and the valuation multiple has shrunk below 10X forward earnings. The reason is that telecommunications operators are cutting back on investment. Higher interest rates, inflation and competition are eating into customer cash flows, resulting in less capital spending. For now, Nokia will experience reduced demand. At some point, the ever-increasing need for wire and wireless bandwidth will force service providers to increase investment. In addition, Nokia’s market share is improving due to geopolitical changes and improved market competitiveness. The share price declined by 15% during the quarter.”
3. Airbnb, Inc. (NASDAQ:ABNB)
Number of Hedge Fund Holders: 47
Airbnb, Inc. (NASDAQ:ABNB) is making moves after the stock was added to the S&P 500 index. Analysts also believe Airbnb, Inc. (NASDAQ:ABNB) could gain value amid expectations that it would announce generative AI features integration with its platform later this year. Airbnb, Inc. (NASDAQ:ABNB)’s GAAP EPS in the second quarter of 2023 came in at $0.98 beating estimates by $0.20. Revenue in the quarter jumped 18.1% year over year to $2.48 billion, surpassing estimates by $60 million.
As of the end of the second quarter of 2023, 47 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Airbnb, Inc. (NASDAQ:ABNB). The biggest ABNB stakeholder of Airbnb, Inc. (NASDAQ:ABNB) was John Overdeck and David Siegel’s Two Sigma Advisors which owns a $223 million stake in the company.
2. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 278
Amazon.com, Inc. (NASDAQ:AMZN) has a huge upside potential amid its AI capabilities in the Cloud computing industry. AWS is offering several AI-related features for developers to design, build and deploy AI applications. Amazon.com, Inc. (NASDAQ:AMZN) is also a leader in the ecommerce market that is alive and thriving. This makes several top analysts believe that Amazon.com, Inc. (NASDAQ:AMZN) has a lot of room to grow in the coming months and years.
Hedge funds also agree with this bullish thesis. As of the end of the first quarter of 2023, 278 hedge funds reported owning stakes in Amazon.com, Inc. (NASDAQ:AMZN), up from 243 funds in the previous quarter.
RiverPark Large Growth Fund made the following comment about Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2023 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN): Amazon was a top contributor in the second quarter, in reaction to a solid 1Q23 earnings report. The company generated $127 billion of revenue (2% ahead of expectations) and nearly $5 billion of operating income (57% better than expectations) driven by rebounding online sales and strong incremental gross margins. During the company’s earnings conference call, Amazon management pointed to easing inflationary pressures, higher productivity gains, and lower expected capital spending for the remainder of the year. The only negative in the quarter was slowing AWS revenue growth, which we believe will rebound later in the year.
With its ability to continue its market share gains in three leading businesses (e-commerce, web services and online advertising), plus a multi-year operating margin expansion opportunity (from improved e-commerce margins and greater contribution from the faster growing, higher margin AWS and advertising segments), we believe Amazon remains one of the best-positioned global growth companies in the world. AMZN shares trade at a 10-year trough EPS multiple, despite what we believe to be currently depressed margins and earnings.”
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 300
Microsoft Corporation (NASDAQ:MSFT) is one of the best stocks available on Robinhood with upside potential. The biggest growth catalysts for Microsoft Corporation (NASDAQ:MSFT) are its several AI-related offerings. Recently, Needham Securities said that Microsoft Corporation (NASDAQ:MSFT) is among the top three front-runners in the AI race amid its LLM capabilities.
Microsoft Corporation (NASDAQ:MSFT) is the most popular stock among smart money investors tracked by Insider Monkey.
Alger Spectra Fund made the following comment about Microsoft Corporation (NASDAQ:MSFT) in its Q2 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). During the period, shares contributed to performance as the company reported fiscal third quarter results above expectations driven by outperformance in More Personal Computing and Office Commercial. Additionally. management provided in-line Azure guidance, easing investor concerns of a potential slowdown in Azure growth estimates. Moreover, management provided encouraging commentary around Al, noting strong long-term opportunities as they integrate various Al offerings into their products and services.”
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Disclosure: None. 11 Robinhood Stocks with Biggest Upside is originally published on Insider Monkey.
