For the past 11 months, investors have been taken on a historically wild ride. The CBOE Volatility Index hit an all-time high in March 2020, with the broad-based S&P 500 setting records for both the fastest bear market decline and quickest rally back to all-time highs.

Though some investors run from volatility when it arises, Robinhood investors thrive off of it.

A young investor looking at a soaring stock chart on her smartphone.

Image source: Getty Images.

These are the stocks Robinhood investors can't stop buying

Online investing app Robinhood, which is known for its commission-free trades, fractional-share investing, and gifting of free stock to new users, has been particularly adept at attracting young investors. The app gained approximately 3 million new users in 2020 and has an average user age of only 31.

The thing about millennial and novice investors is that they often don't understand the finer points about compounding and the importance of long-term investing. As a result, many choose to chase penny stocks, momentum plays, and otherwise awful companies.

But don't take my word for it. Here's a snapshot of the 50 most-held Robinhood stocks as we enter February.

Company Company
1. Apple  26. AMD
2. Tesla Motors (NASDAQ:TSLA)  27. Facebook (NASDAQ:FB)
3. NIO 28. Churchill Capital
4. General Electric 29. Zomedica
5. Ford Motor 30. Norwegian Cruise Line
6. Microsoft  31. Canopy Growth
7. Amazon 32. Boeing
8. Walt Disney 33. Palantir Technologies
9. American Airlines Group 34. United Airlines
10. Plug Power (NASDAQ:PLUG) 35. AT&T
11. Pfizer 36. Twitter
12. Aurora Cannabis (NYSE:ACB) 37. OrganiGram Holdings
13. Delta Air Lines 38. Coca-Cola
14. Carnival 39. Blackberry
15. Sundial Growers (NASDAQ:SNDL) 40. Virgin Galactic
16. GoPro 41. Starbucks
17. AMC Entertainment (NYSE:AMC) 42. Cronos Group 
18. Aphria 43. Uber Technologies
19. Moderna 44. Zynga
20. Alibaba 45. Nokia
21. Snap 46. NVIDIA
22. Bank of America 47. Ideanomics
23. GameStop (NYSE:GME) 48. Nikola
24. Netflix 49. Vanguard S&P 500 ETF
25. FuelCell Energy 50. Bionano Genomics

Data source: Robinhood (current as of Jan. 28 late evening). Table by author. 

"Reddit-raid stocks" are extremely popular

Perhaps the biggest standout in this list is just how quickly the so-called "Reddit-raid stocks" rocketed up Robinhood's leaderboard. By Reddit raid, I'm referring to the recent phenomenon whereby groups of investors on Reddit's "wallstreetbets" community platform band together to buy into stocks that are heavily short-sold in order to create a short squeeze. GameStop, AMC Entertainment, and Blackberry are all companies that weren't on the radar a few weeks ago, but are practically the hottest and most controversial stocks on Wall Street as we enter February.

It's worth noting that it's not clear how much longer we might see GameStop, AMC, or Blackberry stick around on Robinhood's leaderboard. On Thursday, Jan. 28, Robinhood restricted buying activity on a number of Reddit-fueled securities and suggested that it would only allow limited buying activity on Friday, Jan. 29. What I'm trying to say is that this situation is very fluid, and the rankings for these Reddit raid stocks could change wildly in the weeks to come.

One thing I can say with confidence is that what we've seen happen with the share price of GameStop and AMC Entertainment, in particular, isn't going to end well. AMC is less than a week removed from staving off a bankruptcy filing, while GameStop is working on a three-year streak of full-year operating losses and declining sales. These are not stocks that millennial investors should be anywhere near.

An electric vehicle plugged into a charging station.

Image source: Getty Images.

Alternative energy stocks remain favorites among millennials

Another undeniable trend among millennial investors is their love for eco-friendly energy solutions. In particular, they're head-over-heels in love with electric vehicle (EV) manufacturers and accessory producers, as well as hydrogen fuel-cell companies.

Tesla, which chimes in as the second most-held stock on the platform, briefly overtook Apple for a few days during January as the most widely held Robinhood stock. Even though the company just barely missed CEO Elon Musk's target of 500,000 EV deliveries in 2020 (499,550 reported), it did manage to achieve its first full year of profitability. According to Tesla's September 2020 Battery Day event, its capacity, power, and range should remain superior to its competition.

Beyond just EVs, Robinhood investors are really digging Plug Power. Plug's hydrogen fuel-cell solutions are making a tangible impact in the warehouses of major retailers like Amazon and Walmart, and they hold plenty of application in autos and trucks in the years that lie ahead. Plug Power signed joint ventures with South Korea's SK Group and France's Renault in January.

Although EV and hydrogen fuel-cell stocks look extremely frothy, it hasn't discouraged young investors from buying into alternative energy solutions.

Multiple clear jars packed with dried cannabis buds.

Image source: Getty Images.

Cannabis remains in vogue

At one time, marijuana stocks were the hottest industry on the Robinhood platform. Though that's no longer the case, Canadian pot stocks remain a popular hold for young investors.

Potentially the biggest flaw with Robinhood is that over-the-counter (OTC)-listed stocks can't be purchased. Since higher-quality U.S. pot stocks can't list their shares on major U.S. exchanges, it means Robinhood investors are stuck buying the underperforming Canadian weed stocks, which have been hampered by regulatory issues and supply concerns.

Peruse the list and you'll find six Canadian marijuana stocks among Robinhood's top 50 stocks. What's disappointing is that the two worst of the bunch -- Aurora Cannabis and Sundial Growers -- are the most-held of those six.

Aurora Cannabis greatly overestimated its capacity needs and grossly overpaid for more than a dozen acquisitions since mid-2016. As a result, the company wrote down roughly half the value of its total assets last year. To make matters worse, Aurora Cannabis' outstanding share count has ballooned 12,200% since June 2014, with the company leaning on share offerings to fund buyouts and its day-to-day operations.

Penny stock Sundial is in a similar camp. It's been selling its stock like water and has converted some of its debt to equity. The company's ballooning share count is drowning its existing investors.

A Facebook engineer inputting computer code on his laptop.

Image source: Facebook.

Always room for the FAANGs

Finally, you'll note that Robinhood investors always have room on their plate for the FAANG stocks: Facebook, Apple, Amazon, Netflix, and Google (a subsidiary of Alphabet). Alphabet's Class A shares (GOOGL) can be found on Robinhood's top 100 holding list.

Millennials' love for the FAANGs shouldn't come as a surprise. These are brand-name companies that young investors have grown up with and can relate to. They also have a history of absolutely running circles around the broader market.

For example, Facebook reported its fourth-quarter operating results last week and, as usual, crushed expectations. The leading social media provider now has 2.8 billion monthly active users visiting its namesake website, and 3.3 billion in total visiting its family of assets each month (this includes WhatsApp and Instagram). Advertisers fully understand that they're not going to get access to a broader or more targeted audience than what Facebook can offer. 

In a year that saw the steepest recession in decades and a once-in-a-century pandemic, Facebook's ad revenue rose by 21%.

It's figures like these that smartly have Robinhood investors piling into the FAANGs.