Top Millennial, Gen Z Stock Picks Shift To Energy Stocks; But Tesla Still No. 1

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).

In Q1 2022, however, they pumped the breaks on growth stocks in favor of value stocks, according to the Apex Next Investor Outlook report. Like older investors, they appear to be concerned about rising interest rates. They moved away from EV makers like Lucid and Rivian (RIVN). They also shed shares in crypto exchange Coinbase (COIN), which fell nine notches to No. 37.

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, 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 Q1 2022, the top 5 stocks remained the same from the last quarter. Tesla ranked No. 1 followed by Apple. AMC Entertainment was No. 3, 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.

Tesla continued its streak with strong Q1 earnings, but the stock took a dive after CEO Elon Musk's takeover bid for Twitter was accepted by its board. The EV maker also produced drastically fewer cars at its Shanghai plant in April due to Covid shutdowns and parts shortages.

TSLA shares are now trading around 781. MarketSmith chart analysis shows TSLA stock is not currently a buy, as it's trading below its 50-day line.

Meanwhile, Apple shares have held up relatively well amid a volatile market. Apple stock is trading around 153.

Apple recently unveiled its latest low-cost iPhone, a new Mac model and a revamped iPad Air.

It also reported Q2 earnings and revenue that beat expectations despite supply-chain issues and lockdowns in China. However the company warned of headwinds into the next quarter, even as demand for its products remains robust. Covid-related lockdowns in Shanghai, which took effect at the end of Q2, are likely to affect the coming quarter's results.

Amazon stock gapped down on its Q1 earnings miss and is trading well below 50-day and 200-day lines. AMZN stock is not a buy. Shares fell out of a long consolidation with a 3773.18 buy point. Its relative strength line, which compares a stock's performance vs. the S&P 500, is trending downward.

Leaderboard stock Microsoft is not yet a buy, but its shares gapped up on April 27 on earnings and revenue that beat expectations. The company also gave a rosier-than-expected outlook for Q4. Microsoft bought Activision Blizzard in Q3 for nearly $69 billion.

However, MSFT shares are still trading below their 50-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.

In a move that baffled Wall Street, AMC said on March 15 that is bought a large stake in a gold-and-silver mining company. AMC is plunking down nearly $28 million in cash for the deal for a 22% stake in Nevada-based Hycroft Mining Holding, and an equal amount of stock warrants. The company, which used to be known as Allied Nevada Gold Corporation, has a history of financial woes.

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

Apex's top 10 among Gen Z was rounded out, in order, with: Nvidia (NVDA), Disney (DIS), GameStop (GME), Meta Platforms (FB) and Alphabet (GOOGL).

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.

Nvidia stock has plunged below its 50-day line again, after rallying in March.

Disney stock is trading below its 50-day line. Its relative strength line is at multiyear lows. The media and entertainment conglomerate reports earnings May 11.

Meme stock sensation GameStop (GME) came in at No. 8. GME stock has dropped around 74% 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.

Facebook stock surged 15% in after-hours trading on April 27 after it reported better-than-expected earnings. FB stock clawed its way back above its slumping 50-day line, but has slipped below it amid an overall market downturn.

GOOGL shares have tumbled in recent weeks and are trading below their 50-day line.

Through the top six picks, rankings among Millennials mirrored those of Gen Z. However, there were slight differences in the rest of the top 10. And Millennials kept AMD in the top 10, while pushing Disney down to No. 12.

Energy Stocks Move UP

Nio (NIO), Advanced Micro Devices and Lucid Group (LCID) fell out of the top 10 in Q1. AMD fell to No. 12, Nio dropped to No. 13 and Lucid is down to No. 16.

Not surprisingly, energy stocks soared amid surging oil prices. Chevron (CVX) jumped 27 spots to No. 49. Exxon Mobil (XOM), which climbed 10 spots to No. 24, was one of several energy companies to raise spending on share repurchases, offering a further boost to sentiment surrounding the sector, Apex said in a statement.

“Gen Z investors rewarded well-established businesses offering cash payments to shareholders, including Costco Wholesale (COST) (up 5 spots to No. 19), Coca-Cola (KO) (up 5 to No. 22), AbbVie (ABBV) (up 10 to No. 35) and PepsiCo (PEP) (up 5 to No. 62),” Apex said in a news release April 14.

Meanwhile, young investors walked away from video game developer Roblox (RBLX) (down 12 to No. 48), e-commerce player Shopify (SHOP) (down 19 to #50) and social media firm Snap (SNAP) (down 23 to No. 64)