Online investing platform Robinhood has enjoyed a stellar year with more than 3 million signups in the first quarter of 2020. In June, investors scanning for the best Robinhood stocks engaged in 4.3 million transactions in a single day. A big part of its success is its easy-to-use interface, commission-free trades, and free stocks on account creation.
Roughly 50% of Robinhood users have never invested. Most investors on the platform belong to the younger demographic. One of the big criticisms on the platform is that it gamifies investing. Its push notifications, digital confetti and watch lists tend to promote short-term behavior. Research has proven time and again that the best strategy to accrue wealth is to invest for the long term.
However, statistics suggest that the Robinhood users are investing heavily in stocks that on which you’d probably want to go long. Here are three of the best long-term Robinhood stocks for September:
Robinhood Stocks: Microsoft (MSFT)
Microsoft is one of the world’s most successful tech giants, with a market capitalization of $1.7 trillion. It is also a winner on Robinhood as the number of users holding MSFT stock rose 164% since January. A sharp increase in user interest is due its interest in buying-out social media app TikTok’s US operations.
While the TikTok is an attention-grabber, there are several more reasons to invest in Microsoft. Firstly, there is its impressive Azure cloud platform, which has outperformed its rival in Amazon (NASDAQ:AMZN) Web Services. In its latest quarter, Azure grew 47%, which is 18% higher than AWS.
Moreover, each of its core segments contributed to an overall revenue bump of 13% in the quarter. The surge in demand for gaming pushed Xbox hardware and content sales higher by 49% and 65%, respectively. It ended its most recent quarter with almost $19 billion in operating cash flow.
Square (SQ)
Square is an American financial service and digital payment company founded by Jack Dorsey of Twitter (NYSE:TWTR) fame. The number of users holding the stock on the Robinhood app grew 61% in 2020. It’s not surprising, as SQ stock grew 170% this year.
The novel coronavirus confined people to their homes, which led to a massive increase in online activity. Digital payments, in particular, increased 10-fold, which naturally benefited Square. Revenue in its second-quarter grew by a whopping 44% compared to the previous quarter. Its Cash App witnessed a notable increase in activity due to the shift in consumer behavior, setting monthly records in March and April. Additionally, transactions per customer rose to 15, an increase of roughly 50% year-over-year.
Furthermore, Square’s point-of-sale platform has proven to be a major growth driver for the company. Gross payment volumes on the platform grew 1,534% to $106.2 billion between 2012 and 2019. Though the pandemic will affect its POS platform business this year, the utility of its robust seller ecosystem could interest larger businesses.
NVIDIA (NVDA)
American chipmaker NVIDIA has enjoyed an amazing 2020. NVDA stock is up by a colossal 229% year-to-date. Naturally, it has also been a hit among Robinhood users as ownership increased by almost 80%.
With the Covid 19 restrictions in play, demand for the company’s graphics processing units (GPUs) increased drastically. Additionally, the push toward the work-from-home economy, coupled with the expansion of cloud computing, also benefited the company. NVIDIA’s GPUs are the go-to options for data centers and cloud computing systems.
Operating performance in its most recent quarter was off the charts. Revenue and earnings per share grew 39% and 130% year-over-year, respectively. Moreover, data center segment performance was up 80% as well, which now accounts for almost 40% of the company revenues. The segment could potentially eclipse its gaming segment in the upcoming quarters.
With a forward price-earnings ratio of over 60, many consider NVDA stock to be overvalued. However, with the company’s massive potential and tailwinds from the adoption of cloud computing and gaming, the price is justified.