Ask just about any investor and they'll agree: The best S&P 500 stock to own is Tesla — which just split its shares. But Boomers beg to differ.
Shares of electric-vehicle maker Tesla are the top holding, by far, of all Gen Z, Millennial and Gen X investors, by a pretty healthy amount, says data from Apex Clearing, through the end of the second quarter. But it's only a No. 2 position for Baby Boomers. Boomers instead are loaded up with Apple as their top stock.
Knowing how investors are positioning themselves now is critical. The S&P 500 is attempting to crawl its way out of the bear market that it fell into this year. It's important to know where the buying support is once the S&P 500 is ready to reemerge.
"Bear markets follow bull markets and bull markets follow bear markets. That's the nature of the business," said Scott Sheridan, CEO of Tastyworks. "So if you've been around a bit, you know this isn't a time to panic and, if anything, this is a great opportunity."
Is Tesla The Best S&P 500 Stock To Own?
Tesla's lasting popularity with investors is pretty amazing when you consider how poorly it's doing this year. Shares are off more than 14% this year. Investors worry about rising competition from China, what an economic slowdown would do to demand and supply chain issues.
But investors are still faithful. Upward of 17.2% of Gen Z's portfolios are in Tesla stock. That outranks their No. 2 13.7% position in Apple. It's a similar story with millennials, but even more so. Millennials put 19.1% of their portfolios just in Tesla followed by 11.1% in Apple. And Gen Xers load 18.3% of their portfolios in Tesla, topping their No. 2 position in Apple stock at 14.8%.
These are heavily outweighted positions. Keep in mind Tesla ranks as just the No. 5 holding in the S&P 500 with a tiny 2% weighting. Apple is the largest holding in the S&P 500 at 7.1%. Boomers, though, put much larger bets on Apple, making it 20% of their portfolios. Tesla is 11.5%.
What do analysts think about Tesla? They rate the stock an "outperform" and think it'll be worth 907.30 a share in 12 months, says S&P Global Market Intelligence. If they're right, that will make just about everyone happy. That target marks nearly 10% upside from where the stock is now.
But what other stock moves are young investors making?
Gen Z's S&P 500 Favorites
If you're looking to see where young investors are positioning themselves, just look at the top holdings of Gen Z investors.
Following Apple, their next top position is Amazon.com, at a 6.4% stake in their portfolios. This, too, shows large conviction as the online retailer is essentially in a recession already. The company post another loss in the second quarter. Shares are down a 14% this year.
And Gen Z is still holding out hope for some 'meme stocks." Movie chain AMC Entertainment is still the age-group's No. 4 most-popular holding at 6% of their portfolios. It's remarkable to see the conviction given the stock is down more than 36% this year.
But above all, investors are betting on a bounce in Tesla.
Gen Z's Top Stock Holdings
Tesla is still No. 1 in terms of popularity in portfolios
| Rank (of June 30, 2022) | Company | Symbol | YTD % ch. | Sector |
|---|---|---|---|---|
| 1 | Tesla | -14.5% | Consumer Discretionary | |
| 2 | Apple | -7.1 | Information Technology | |
| 3 | Amazon.com | -14.6 | Consumer Discretionary | |
| 4 | AMC Entertainment | -36 | Communication Services | |
| 5 | Microsoft | -16.1 | Information Technology | |
| 6 | Nvidia | -34.9 | Information Technology | |
| 7 | Walt Disney | -30.8 | Communication Services | |
| 8 | Alphabet | -18.3 | Communication Services | |
| 10 | NIO | -35.7 | Consumer Discretionary |
