We recently published a list of 15 Best Stocks to Buy According to Jim Simons’ Renaissance Technologies In this article, we are going to take a look at where Robinhood Markets, Inc. (NASDAQ:HOOD) stands against other best stocks to buy according to Jim Simons’ Renaissance Technologies.
Even after his passing in 2024, billionaire investor and mathematician Jim Simons remains known as the “Quant King” of hedge funds due to the extraordinary success of Renaissance Technologies, his quantitative trading firm based in New York. After years of researching the finance industry, Simons realized the untapped potential of employing quantitative analysis to capitalize on market inefficiencies. This insight led him to develop a data-driven investment strategy of analyzing market behavior solely using statistical and mathematical models. By identifying subtle, non-random patterns in financial data, the quant genius predicted future stock movements and generated impressive returns.
Although it is closed to outside investors, Jim Simons’ secretive Medallion hedge fund, a flagship of Renaissance, has produced ground-breaking results since its inception. The Medallion Fund raked in impressive returns of 56.6% and 74.6% during the early 2000s dot-com crash and the global financial crisis between 2007 and 2011. The fund has maintained a substantial annual return of 31.5% since its first two years of operation. At the time of his death, Simons was worth $31.4 billion, ranking him among the world’s wealthiest individuals, thanks to the strong market performance of the Medallion Fund and Renaissance.
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Renaissance Technologies’ computer-driven powerhouse came off to a great start after a stellar performance in 2024. The Renaissance Institutional Diversified Alpha Fund has gained 9.05% as of February, continuing to build on its impressive 2024 return of 15.6%, which was its best since its inception in 2021. Meanwhile, the Renaissance Institutional Equities Fund has had its best start in over ten years, rising 11.85% in the first two months of 2025. Both funds are allowed to maintain sizable individual stock positions in addition to using stock index futures and options to help manage risk. However, the firm warns that it may be difficult to quickly unwind these sizable holdings without impacting market prices.
Our Methodology
For this list, we picked stocks from Renaissance Technologies’ 13F portfolio as of the end of the fourth quarter of 2024. These equities are also popular among elite hedge funds.
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).
Jim Simons of Renaissance Technologies
Robinhood Markets, Inc. (NASDAQ:HOOD)
Renaissance Technologies Q4 Stake: $450 million
Number of Hedge Fund Holders: 79
Robinhood Markets, Inc. (NASDAQ:HOOD) is a California-based financial services company that utilizes a mobile app to offer commission-free trading of stocks, exchange-traded funds, and cryptocurrencies, as well as individual retirement plan administration.
Robinhood Markets, Inc. (NASDAQ:HOOD) reported outstanding first-quarter 2025 earnings, with revenue up 50% year-over-year and record net deposits of $18 billion. The company also experienced double-digit increases in trading volumes across every segment, including an 84% surge in stocks and record options volume. Moreover, the number of the company’s gold subscribers nearly doubled year-over-year to 3.2 million at the end of the quarter.
On May 1, MP Securities analyst Devin Ryan reiterated his Market Outperform rating and $70 price target for Robinhood Markets, Inc. (NASDAQ:HOOD), citing the company’s strong growth trajectory. Ryan stated that Robinhood’s revenue of $927 million slightly exceeded expectations by around 2%. Although expenses were somewhat higher than predicted, the increase was due to one-time transaction fees associated with the TradePMR agreement. The analyst also noted that Robinhood repurchased $322 million of its shares during the quarter and increased its share repurchase authorization by $500 million, bringing the total buyback program to $1.5 billion.
Overall, HOOD ranks 14th on our list of best stocks to buy according to Jim Simons’ Renaissance Technologies. While we acknowledge the potential for HOOD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than HOOD but trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
