Buying a stock is deceptively easy, but purchasing the right stock at the right time without a proven strategy is incredibly hard. So, what are the best Robinhood stocks to buy now or put on a watchlist? At the moment, Microsoft (MSFT), Advanced Micro Devices (AMD) and General Motors (GM) are standout performers, at least relatively. They are also part of the Robinhood Top 100 Stocks list, the platform's most popular stocks among traders.
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Unlike meme stocks such as GameStop (GME) and AMC Entertainment (AMC), these stocks offer a mix of solid fundamental and technical performance.
Best Robinhood Stocks To Buy: The Crucial Ingredients
There are thousands of stocks trading on the NYSE and Nasdaq. But to generate big gains you have to find the very best. The best Robinhood stocks for investors will be those that offer a mix of earnings and stock market performance.
TheCAN SLIM systemoffers clear guidelines on what you should be looking for. Invest in stocks with recent quarterly and annual earnings growth of at least 25%. Look for companies that have new, game-changing products and services. Also consider not-yet-profitable companies, often recent IPOs, that are generating tremendous revenue growth.
The Market Is Key When Buying Robinhood Stocks
A key part of the CAN SLIM formula is the M, which stands for market. Most stocks, even the very best, follow the market direction. Invest when the stock market is in a confirmed uptrendand move to cash when the stock market goes into a correction.
The stock market turned in stunning gains in 2023 and will now look to build on those gains. Indexes are looking strong, with the Nasdaq and the S&P 500 both above the key 50-day moving average. The S&P 500 recently hit a record high for the first time in two years.
The stock market is back in a confirmed uptrend, though there have been a number of distribution days lately. Now is a good time for investors to make stock purchases. It's also a good time to add to existing holdings at follow-on opportunities. IBD is currently recommending 60% to 80% market exposure.
Investors should be taking care to invest in high quality stocks. The selections below are among the best Robinhood stocks to buy or watch now. The IBD 50 is also a rich hunting ground.
Despite the market going back into a confirmed uptrend, it remains crucial to stay on top of sell signals. Any stock that falls 7% or 8% from your purchase price should be jettisoned. Also beware of sharp breaks below the 50-day or 10-week moving averages.
Remember, there is still significant headline risk. Inflation could still be an issue while the Russia-Ukraine conflict is a wild card that has proved its ability to shake the market, and the current issues in Israel add even more uncertainty.
Things can quickly change when it comes to the stock market. Make sure to keep a close eye on the market trend page here.
Best Robinhood Stocks To Buy Or Watch
Now let's look at Microsoft stock, AMD stock and GM stock in more detail. An important consideration is that these stocks are solid from a fundamentals perspective, while institutional ownership is also strong.
Looking For The Next Big Stock Market Winners? Start With These 3 Steps
MicrosoftStock
MSFT stock is is actionable as it rebounds off the 10-week moving average and now the 21-day line, MarketSmith analysis shows.
Microsoft stock could also go on to form a new base if it consolidates here. The potential ideal buy point would be 420.82.
Therelative strength line looks to be moving higher again after a recent dip. Microsoft stock is in the top 14% of issues in terms of price performance over the last 12 months.
Overall impressive performance is reflected in its strongIBD Composite Rating of 93 out of 99.
The firm has seen EPS grow by an average of 25% over the past three quarters, which meets CAN SLIM requirements. In addition, earnings grow by an average of 14%over the past three years, impressive growth for such a large firm.
Big Money have been net buyers of MSFT stock of late, with its Accumulation/Distribution Rating coming in at B-.
In late January the Redmond, Wash.-based firm reported earnings per share had popped 33% to $2.93 as revenue climbed 18% to $61.1 billion for the most recent quarter. Microsoft Cloud revenue rose 24% year over year to $33.7 billion in the September quarter.
CEO Satya Nadella boasted about the firm'sartificial intelligenceinitiatives following the results.
"We've moved from talking about AI to applying AI at scale," Nadella said in a statement. "By infusing AI across every layer of our tech stack, we're winning new customers and helping drive new benefits and productivity gains across every sector."
Microsoftrecentlyunveiled its own AI chip, the Azure Maia AI Accelerator, to ease its dependence on Nvidia GPUs. It is designed to run generative AI and other AI workloads, including large language model training and inference. The firm plans to roll out Maia to its data centers early next year.
It remains to be seen whether moves to adopt a vertical integration approach by firms such asMicrosoftandApple (AAPL) could be a longer-term threat to chip makers such as Nvidia andAdvanced Micro Devices (AMD) remains to be seen.
Microsoft has been making good progress since it showed off its new Bing search engine and Edge web browserthat use AI technology.Microsofthopes the OpenAI-based technology can help Bing chip away at Google's dominance in the internet search market.Microsoftstock was given a flurry ofprice-target hikesfrom analysts after the presentation. '
The firm kept up the momentum by adding artificial intelligence tools to its popular Office productivity applications.
It comes after theMicrosoftannounced a investment, reportedly worth $10 billion, inartificial intelligence startup OpenAI.
The software giant is providing its Azure cloud computing infrastructure for OpenAI. It also is adding OpenAI models to its consumer and enterprise software products.
Microsoftmay have strengthened its OpenAI position after the AI startup ousted and then brought back CEO Sam Altman in a five-day span.
Excellent sustained performance has won Microsoftstock a spot in theIBD Long-Term Leaders Portfolio.
AMD Stock
Chip giant AMD is another of best Robinhood stocks to buy. It is in a buy zone after clearing a short consolidation with a 184.92 ideal entry point. The breakout came just before the pattern qualified as a new flat base.
The 21-day exponential moving average has been acting as an area of support.
It comes after it recently bounced off the 10-week moving average which served as an additional buying opportunity. It rallied following blowout earnings from rival Nvidia (NVDA).
Overall performance is pristine for the semiconductor juggernaut, which is reflected in its rare perfect IBD Composite Rating of 99.
In the most recent quarter AMD posted 12% EPS growth to 77 cents as revenue jumped 10% to $6.17 billion. Earnings were in-line with Wall Street expectations while sales were better than expected.
Earnings are seen growing by 17% in 2024 before ramping up to 66% growth in 2025, an impressive figure for such a large company.
AMD is working hard to compete with Nvidia in the artificial intelligence (AI) space. This year it is ramping up production of its MI300 AI chip as internet companies upgrade data centers for processing AI applications and workloads.
Despite this, analysts estimate Nvidia still holds about 80% of the AI chip market.
Data center products will account for 50% of AMD revenue by the end of 2024, up from 10% to 15% five years ago, according to a research note from Bank of America.
The lion's share of AMD data center sales come from replacing Intel devices in computer servers. AMD has told Wall Street analysts that AI chips could garner $3.5 billion in 2024 sales.
While AMD is designing chips for training AI models on supercomputers, the bigger opportunity is expected to be in the "inferencing" market.
Inferencing boils down to running AI workloads in data centers but also processing AI apps on mobile phones, PCs and other devices. Inferencing involves making predictions based on live data to produce actionable results.
Market Rally Hits New Milestone, But This Risk Returns
GMStock
GMstock is trading just below a double-bottom base with a 41.04 buy point, MarketSmith analysis shows. This is a first stage pattern, a bonus. It is also in the buy zone above a handle entry of 39.75.
GeneralMotorsstock is back above the key 50-day line. It also sits bullishly clear above its short-term moving averages.
The RS line is taking a moving higher again, though it remains off 52-week highs.
Stock market performance is currently the strongest suit for GM stock. It is in the top 17% of issues in terms of price performance over the past 12 month.
Earnings performance is not so impressive though, with its EPS Rating coming in at 53 out of 99.
Wall Street now sees full-yearGM earnings per share of $8.65 in 2024, which would represent a lift of 13%.
One reason to buy the stock is institutional sponsorship. Big Money has been buying up the stockof late, which is reflected in itsAccumulation/Distribution Rating of A-.
In total, 53% of its stock is held by funds. The highly-rated Fidelity Contrafund is a noteworthy holder of GM stock.
One key part of theCAN SLIM formulathatGMis pursuing is the N, which stands for New Products.GMhas said it hopes to phase out the sale of ICE light vehicles by 2035.
For General Motors an EV ramp is key as it attempts to compete withTesla (TSLA).
Nevertheless, the firm could benefit from apossible change in federal limits on tailpipe emissions that is in the works.
Sources told The New York Times that the Biden administration "intended to relax" elements of its regulatory strategy, designed to quicken the shift to electric vehicles from traditional vehicles with internal combustion engines.
The rules in question would essentially require automakers to rapidly increase EV sales over the next few years. The change to proposed rules would delay those requirements until after 2030.
Please follow Michael Larkin on X, formerly known as Twitter, at @IBD_MLarkin for more analysis of growth stocks.
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