7 Small-Cap Robinhood Stocks Millennials and Gen Z Are Betting On

Robinhood Markets Inc. (NASDAQ: HOOD) is one of the more popular sites for retail investors. In 2024, approximately 11.8 million retail investors used the company's trading platform. Through the first three quarters of 2024, Robinhood has generated over $1.9 billion in revenue, which is already more than the company's revenue for the whole of 2023. 

But what kind of stocks are investors buying? Approximately 28% of the top 100 stocks trending on Robinhood are small-cap stocks. That tracks with the sentiment of many analysts who believe that 2025 may be a year when small-cap stocks make significant gains.  

The Russell 2000 index, a proxy for small-cap stocks, generated a return of 16% in 2024. The renewed enthusiasm for small-cap stocks comes due to the Federal Reserve's decision to lower interest rates, which disproportionately impacts many smaller companies that may have to rely on borrowing to fund their operations.  

Although the pace of those rate cuts is likely to be smaller in 2025 than first expected, the trend is still in favor of lower rates throughout the year. And, if the economy gets a boost through corporate tax cuts and deregulation, the gains may be even larger.  

With that in mind, we've put together this special presentation that highlights seven of the most popular small-cap stocks trending on the Robinhood platform.  

AMC Entertainment Holdings Inc. (NYSE: AMC) became part of the meme stock craze of 2021. At that time, AMC stock had significant short interest that retail investors used to their advantage to initiate a short squeeze. In fact, at one point, AMC stock traded for over $320.  

But the stock has fallen sharply since then and is once again trading as a penny stock. The issue is the company’s business model, which still faces significant pressure from streaming companies. While AMC has seen a boost from several blockbuster films that have drawn more guests back to theaters, this has not been enough to alleviate the broader challenges.

In December 2024, AMC announced a stock sale in an effort to strengthen its balance sheet. This move is the latest in a series of stock sales conducted over the past three years, alongside a 1-for-10 reverse stock split implemented in 2023.

Nevertheless, as the activity on Robinhood suggests, AMC continues to have a base of committed investors. And that’s the kind of conviction you’ll need to get involved with AMC stock.  

Sirius XM Holdings Inc. (NASDAQ: SIRI) is another favorite among Robinhood investors. However, SIRI stock has faced significant challenges, declining by more than 58% over the past year. One particularly difficult month saw the stock drop nearly 19%. This downturn may highlight the growing competition Sirius faces in capturing consumer attention.

With the stock recently trading around $23 per share and analysts indicating a potential upside of over 19%, it may present an opportunity for investors. Supporting this optimistic outlook are Sirius's efforts to reinforce its partnership with automakers, a crucial segment of its business.

The company is also leaning into the lucrative podcast segment, which is likely to boost the its advertising revenue, directly benefiting its bottom line. Moves like that are likely a reason the company is drawing the attention of Warren Buffett, whose company Berkshire-Hathaway Inc. (NYSE: BRK.B) continues to buy SIRI stock even while being a net seller of stocks in recent years.

If you think Robinhood investors are only looking for growth stocks, think again. Real estate investment trust Rithm Capital Corp. (NYSE: RITM) screams value stock but still managed to crack the list of the top 100 trending stocks on the platform.

To be fair, RITM stock may be appealing to traders more than investors, but it’s still a notable stock to watch. That has to do with the company’s business model, which focuses on mortgage service rights (MSRs). 

MSRs are the rights to service home loans, not the loans themselves. They are contracts that give companies like Rithm the right to collect payments from a borrower. You may experience it when a third-party company starts collecting your mortgage payments.  

That’s important because while the housing market is still struggling, MSRs increase in value when mortgage rates stay in a range or move higher. This dynamic explains the choppiness in the RITM stock price in the last year. But with mortgage rates expected to remain higher throughout 2025, it’s easy to see why the stock is gaining attention from traders seeking to capitalize on current housing market conditions.

Bitcoin's strong 2004 helps explain why Riot Platforms Inc. (NASDAQ: RIOT) cracks the list of the top trending small-cap stocks on Robinhood. The company aspires to be North America’s leading provider of Bitcoin mining services through one of the world’s largest Bitcoin mining fleets.  

And, like Bitcoin itself, RIOT stock is full of volatility. For most of 2024, that put pressure on the stock price. But the stock has been surging since the election of Donald Trump, the nation’s first pro-crypto presidency.

Despite the recent 57% run-up in RIOT stock, analysts still project an additional 20% upside in the next year. This bullish sentiment stems partly from the company’s forecasted revenue growth of 113% year-over-year to $782.5 million, even as Bitcoin mining costs rise alongside the asset's value.

At first glance, Peloton Interactive Inc. (NASDAQ: PTON)'s inclusion on this list may be dismissed as a typical short-squeeze play, which could explain some of the recent volatility in its stock price. The stock has seen impressive gains—up to 93%—in recent months, and has risen significantly over a six-month period.

However, with PTON stock now trading above $9 per share, this may be a time for option traders to get involved. Peloton's business model relies on a combination of hardware sales and subscriptions. However, its subscription base has been shrinking for several years, likely due to cost-conscious consumers cutting the $44 monthly fee from their budgets.

And although Peleton is moving closer to profitability, it continues to report negative per-share earnings and is expected to remain unprofitable in the near term. This has contributed to short interest in Peloton stock exceeding 15%, with analysts forecasting potential downside in the months ahead.

Plug Power Inc. (NASDAQ: PLUG) is a leading developer of hydrogen fuel cells and a key player in the green hydrogen economy. Its fuel cells are used in vehicles such as forklifts, short-range haulers, and delivery vans.

But the real opportunity lies in the broader application of fuel cells to power entire buildings, including data centers and electric vehicle charging stations. The good news is that as nuclear power becomes more popular, it creates an opportunity to develop cost-effective hydrogen.  

It’s important to note that the company relies on government subsidies for a sizable chunk of its revenue. That’s a key reason why the ability to sell fuel cells for large buildings would be an important step towards Plug Power becoming profitable. 

Plug Power is a penny stock, which could explain the interest from Robinhood investors. Short interest of over 23% will continue to put the stock on the radar of options traders seeking opportunities in its volatility.

Airline stocks are notoriously turbulent and cyclical. But Robinhood investors have been getting nothing but blue skies from their interest in JetBlue Airways Corp. (NASDAQ: JBLU). The stock bottomed out in September 2023 but has been on an absolute tear since then. 

On the one hand, you can look at the company’s focus on expanding its network to include more locations that are attractive to travelers who want to combine business and leisure (aka, Bleisure). However, it’s more likely that Robinhood traders are attracted to the company’s high short interest, which creates opportunities for significant price swings. 

If you’re considering JetBlue as a long-term investment, you’ll want to pay attention to its revenue growth, which has declined in recent quarters. Remember that JetBlue is positioned as a low-cost carrier—that may help fill up flights, but it may have a negative impact on profitability.