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.
Click the "Continue to Slide #1" button to view the first company.
