Millennials are loaded up with the same big-cap S&P 500 stocks as everyone else, like Tesla and Apple. But their biggest winning stock is much more obscure.
Marathon Digital Holdings, a Florida-based company that mines digital assets, is up 192% this year. That makes it the top performing holding among millennials' 100 most popular stocks, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and a just-released report from Apex Fintech Solutions.
Seeing such a massive winner outside the megacap techs is noteworthy. Just seven giant stocks that everyone already owns, including chipmaker Nvidia, are nearly single-handedly driving the S&P 500.
So getting ahead of the pack takes looking off the beaten path for winning stocks.
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"While a deal in Washington could be a catalyst for a breakout, overbought conditions in the technology sector and megacap space — the primary drivers of this year's market advance — could make this a high hurdle for the market to clear on a near-term basis, especially without broader participation," said Adam Turnquist, chief technical strategist at LPL Financial.
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Talk about a stock you wish you'd owned.
Marathon Digital isn't the very largest holding in most millennials' portfolios as of March 31 — the latest data available. The stock ranks just No. 82, says the Apex Fintech Solutions analysis of 6.9 million brokerage accounts.
Tesla is millennials' No. 1 position. But Marathon Digital stock is a giant winner and one that separates millennials from older generations.
To put its gain this year into perspective, shares of Marathon digital are up even more than Nvidia, which for many people was the runaway winner this year so far. Nvidia is up more than 172% this year. But owning Nvidia doesn't separate you. It's the No. 7 biggest holding in the S&P 500. It's also a top-five holding for all four current generations: Gen Z, millennials, Gen X and baby boomers, Apex says. The stock, thanks to the AI boom, is just the second-best performing stock in millennials' portfolios.
But that's what makes Marathon different. It's not even a top 100 position for any of the older generations: Gen X or boomers. Millennials seem eager to jump in ahead of the company's expected profitability. The company is seen making $35.3 million in profit this year, or 22 cents a share. And next year, analysts think the company will make another $83 million in profit, or 51 cents a share.
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Other Generational Trends With S&P 500 Stocks
There's much overlap between the top seven stocks preferred by all generations.
Tesla, Apple, Amazon.com, Microsoft, Nvidia, Alphabet and Facebook parent Meta Platforms are all four current generations' top holdings, Apex says. And those are the same stocks dominating the S&P 500's gains this year, too.
But millennials broke rank with the rest in several areas. For one, millennial investors banked on bank stocks despite the financial turmoil in the first quarter. They piled into Charles Schwab, making it their No. 66 holding (up from 87th), despite the shares losing more than a third of their value in the first quarter. Millennials also jumped into shares of struggling First Republic Bank, making it their 76th most popular stock despite losing most of its value in the first three months of the year.
But like Gen Z, millennials are still holding out hope for crypto currency. Gen Z is the only other generation other than millennials to hold Marathon Digital in their top 100 stocks. They've also added to crypto company Coinbase, which gained 80% this year so far, and cybersecurity firm CrowdStrike.
"Gen Z investors were in elementary school when Lehman Brothers crashed in 2008 — so in many respects, the (first-quarter) bank crisis was really that generation's first true financial crisis," comments Connor Coughlin, Chief Commercial Officer, Fintech at Apex Fintech Solutions.
Millennials' Best Stocks
Top-performing stocks this year among millennials' most-popular 100 in the first quarter
| Rank March 31, 2023 | Company | Symbol | Year-to-date % ch. | Sector |
|---|---|---|---|---|
| 82 | Marathon Digital Holdings | 192.1% | Information Technology | |
| 5 | Nvidia | 172.1 | Information Technology | |
| 6 | Meta Platforms | 126.5 | Communication Services | |
| 15 | Palantir Technologies | 126.5 | Information Technology | |
| 50 | DraftKings | 114.5 | Consumer Discretionary | |
| 8 | Advanced Micro Devices | 84.5 | Information Technology | |
| 43 | Coinbase Global | 79.6 | Financials | |
| 84 | Grayscale Bitcoin Trust (BTC) | 69.5 | Financials | |
| 1 | Tesla | 68.5 | Consumer Discretionary | |
| 85 | Royal Caribbean Cruises | 68.4 | Consumer Discretionary |
Sources: Apex Fintech Solutions, S&P Global Market Intelligence, IBD
Follow Matt Krantz on Twitter @mattkrantz
