Millennial And Gen Z Stock Picks From Tesla To Apple: Should You Buy Them Too?Millennial And Gen Z Stock Picks From Tesla To Apple: Should You Buy Them Too?

Over the next 25 years Millennials and Gen Z will inherit nearly $70 trillion from their Baby Boomer grandparents and Gen X parents. But many of them are not waiting for the windfall to start investing in stocks. So what stocks are they investing in? And should you buy them too?

Younger adults tend to favor high-risk, high-reward stocks, such as Tesla (TSLA), Advanced Micro Devices (AMD) and meme stocks such as AMC Entertainment (AMC). But they also like slower growth names such as Apple (AAPL) and Microsoft (MSFT).

But taking or adding to a position amid market volatility tied to the Russian invasion of Ukraine is risky.

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Millennials, born between 1981 and 1996, are saving more than ever. A Bank of America survey found that nearly a quarter of Millennials that are saving have at least $100,000, with 28% of them investing in the stock market.

To be sure, many Millennials and older Gen Z Americans are saddled with crushing student debt and other financial obligations. Yet, they are also saving for retirement and investing in the stock market earlier than previous generations. A CFA Institute study shows that 31% of Millennials with taxable investment accounts began investing before age 21, vs. 14% of Gen Xers and 9% of Baby Boomers.

Younger investors have a keen interest in socially and environmentally responsible companies such as electric-vehicle makers, tech firms and cryptocurrencies.

Top 5 Millennial And Gen Z Stock Picks

Apex Clearings, which analyzes the holdings of more than 1 million Gen Z accounts and over 5 million accounts held by Millennials, Gen X and Baby Boomers, publishes a quarterly report that shows generational investing trends.

Among Millennials and Gen Z investors in Q4 2021, Tesla ranked No. 1, up from the second spot the prior quarter. Apple ranked No. 2, also up one spot from Q3. AMC Entertainment was No. 3, down from the top spot, while Amazon (AMZN) came in fourth. Microsoft stock capped the top five.

Leaderboard stock Tesla gained 36% in the last quarter of 2021, thanks to record deliveries. Tesla delivered 308,600 vehicles, bringing its 2021 total to a record-breaking 936,172. The EV maker also handily topped Q4 earnings despite having factories “running below capacity for several quarters as supply chain became the main limiting factor, which is likely to continue through 2022,” management said in a statement.

However, Tesla shares have fallen 22% in 2022 so far, amid a market rotation away from growth stocks, especially richly valued names. MarketSmith chart analysis shows TSLA stock is not currently a buy as it is trading below its slumping 50-day line and right around its 200-day line. Shares are in a long consolidation with a 1,208.10 buy point.

Meanwhile, Apple shares gained 36% in the last three months of 2021. Shares are down almost 11% since the start of 2022, though that’s holding relatively well. Apple stock has a 183.04 buy point from a consolidation.

Amazon stock is not a buy right now, as it has fallen 12% since the start of the year. Its relative strength line, which compares a stock’s performance vs. the S&P 500, is trending lower.

Leaderboard stock Microsoft is not yet a buy as it is trading below its declining 50-day line. MSFT stock is also trading below its 200-day line.

Meme stock AMC may be a favorite among young investors, but MarketSmith chart analysis says stay away. Shares have plunged from their May 2021 peak. AMC’s relative strength line is trending downward, near lows not seen since June 2021. While revenue has rebounded from 2020 levels, when most theaters were closed, it remains well below pre-pandemic levels. AMC is expected to lose money through at least 2023.

Disney, Nvidia Among Top 10 Millennial, Gen Z Stock Picks

Apex’s top 10 was rounded out, in order, with: Nvidia (NVDA), Disney (DIS), Nio (NIO), Advanced Micro Devices and Lucid Group (LCID).

Nvidia’s proposed deal to buy chip designer Arm for $40 billion fell through in early February. NVDA stock, which is also on Leaderboard, initially popped on the news. But shares have since declined 18%. Nvidia stock is not currently a buy as no discernible pattern has formed. Shares are trading below their declining 50-day line.

Rival chipmaker AMD on Feb. 14 completed its acquisition of Xilinx in an all-stock deal worth $49 billion. AMD hopes to expand its presence in the data center market with the purchase. But AMD stock is not yet a buy. Shares are trading around 37% below their 52-week high.

Disney recently posted better-than-expected fiscal Q1 earnings, as streaming subscription growth remains strong and visitors return to its U.S.-based theme parks. International travel continues to lag, however.

Disney stock is trading below its 50-day line. Its relative strength line is at multiyear lows.

China-based EV maker Nio has fallen sharply from its all-time high of 66.99 intraday Jan. 11, 2021. NIO stock is not a buy right now as it’s trading well below its 50-day line.

U.S.-based luxury EV maker Lucid is well off its 52-week high of 57.75 achieved on Nov. 17, 2021, round-tripping a huge breakout from late October. LCID stock is currently not a buy, trading below its 50-day and 200-day lines.

Meme Stocks Fall

Meme stock sensation GameStop (GME) fell out of the top 10 to No. 11. GME stock has dropped around 71% from its peak of 348.50 at the height of the meme stock frenzy in 2021. Like AMC, GameStop is expected to lose money for the next several quarters.

Among some big movers up the list is Roblox (RBLX), climbing 36 spots to No. 36 among Gen Z investors. The report cites interest in the metaverse for its popularity. RBLX stock cratered after reporting dismal earnings on Feb. 15. Shares are well off their all-time high of 141.60, achieved in November 2021.

Young investors also piled into Nike (NKE) stock, in an apparent nod to its foray into nonfungible tokens, the report said. Nike recently bought RTFTK, a virtual shoe company that makes NFTs and sneakers for the metaverse. The venture follows Nike’s collaborations with Fortnite and Roblox, two brands that are wildly popular among this age group.

Nike stock rallied in the last three months of 2021, but shares have tumbled below their falling 50-day line in recent months.

EV maker Rivian (RIVN) debuted on the list at No. 44, as the company went public in December 2021. Rivian rolled onto the market with the first ever electric pickup in December. Production ramp-up has been choppy, slowing deliveries. RIVN stock hit a post-IPO high of 179.47 on Nov. 16, 2021. But shares have dropped since then to around 40, below their IPO price.

Rivian reports Q4 earnings on March 10. Wall Street analysts expect the company to trim losses from the last quarter to $1.58 per share on sales of $50.4 million. Rivian stock plunged in the days after the company announced on March 1 that it was hiking prices for its vehicles up to 20% to make up for increased costs related to chip shortages and inflation, among other factors.

See the full Apex list here.

Follow Adelia Cellini Linecker @IBD_Adelia.

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