Define popularity.
That might be an awkward way to start out, but it gets to the heart of our question. When you consider a potential investment like Apple, NVIDIA or Tesla, what are you trying to achieve? What are your goals, and what level of risk can you accept while pursuing them? And how can you adapt if those risks don’t work out?
All of this feeds back into looking for the most popular stocks, because that’s the place to start. What does popularity mean to you? Are you looking for the most traded stocks to pursue volatility investing? The most valuable ones to invest in potentially strong companies? The stocks that people search for the most to try and spot future trends?
Each profile will offer different potential opportunities and risks. This makes it important to understand your own goals before you start looking up individual investments (consider speaking with a financial advisor for professional investment advice). With that in mind, here are three ways to define the most popular stocks and which companies would rank.
Herd Bias in Investment
It’s important, at the outset, to discuss herd bias.
Herd bias is a term from the field of behavioral finance, the study of how and why people make financial decisions. It’s the instinct to make investments based on what other investors are doing, buying or selling because everyone else is doing so. An investor caught up in herd bias will follow and copy market trends simply because the trend is happening, often driven by greed (in the case of a seemingly-popular asset) or fear (in the case of an asset that is being abandoned). For the market at large, it can quickly spiral into feedback loops.
This is a very strong instinct, but it can lead to bad decisions. First, other investors aren’t necessarily making the right decisions for you. Even if their trading is rational, it might not fit your needs. Second, other investors aren’t necessarily acting rationally. They might be acting on bad information or, very often, following herd bias tendencies themselves. As a result, trading based on third party behavior can expose your portfolio to very real risks and mispriced assets.
It’s also important to distinguish herd bias from market analysis.
The behavior of other traders sends important signals to investors. This is most often communicated through pricing (although there are many indicators for interest or skepticism about an asset). When prices go up, it typically signals increased interest and demand, and vice versa as prices go down. This can suggest strengths and weaknesses in the underlying asset, which can then inform your own trading.
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But the important word there is suggest. With market analysis, you use the behavior of other traders as a starting point. You see trends and investigate the assets behind those trends, then make investments based on your findings. This is as opposed to herd bias, in which you see a trend and make investment decisions based just on the existence of this trend.
Popular Stocks: Most Traded
One way to consider popular stocks is by reviewing trading volume, otherwise known as trading activity. This measures how many shares of a given stock trade hands during a day. At time of writing, the 10 stocks with the highest three-month average trading volume are:
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NVIDIA (NVDA) – Average trading volume 360.7 million shares per day
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Tesla (TSLA) – Average trading volume 94.8 million shares per day
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Apple (AAPL) – Average trading volume 64.3 million shares per day
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Intel (INTC) – Average trading volume 60.6 million shares per day
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Ford Motor Company (F) – Average trading volume 58.9 million shares per day
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AMD (AMD) – Average trading volume 54 million shares per day
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Palantir Technologies (PLTR) – Average trading volume 46.3 million shares per day
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Marathon Digital Holdings (MARA) Average trading volume 43.6 million shares per day
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Rivian (RIVN) – Average trading volume 41.3 million shares per day
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NIO (NIO) – Average trading volume 40.9 million shares per day
Trading volume can be a good proxy for popularity, because this is a sheer measure of demand. These are the ten stocks that people are buying the most right now.
On the other hand, that also makes these the ten stocks that people are selling the most right now, because you can’t have a buyer without a seller. Pure trading volume isn’t necessarily a sign of interest or desirability, just momentum. In addition, this says nothing about distributed interest. High trading volume might indicate broad, market-wide attention, or it could indicate trading by a relative handful of large investors.
The upshot is that trading volume can be a potentially good indicator of volatility. This might make these stocks a good fit for shorter-term investments and a higher-risk/higher-reward approach.
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Popular Stocks: Market Cap
Another critical measure of a stock’s popularity is its market capitalization, often referred to simply as market cap. Market cap represents the total market value of a company’s outstanding shares of stock. It’s calculated by multiplying the current stock price by the total number of shares outstanding. Here’s why market cap matters:
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Size and Stability: Generally, companies with larger market caps are considered more stable, as they tend to be well-established players in their industries. They might not offer the rapid growth potential of smaller companies, but they often come with less volatility and risk.
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Investment Attraction: Stocks with high market caps often attract institutional investors due to their liquidity and the perception of safety. This can lead to more analyst coverage, which in turn can influence their popularity among retail investors.
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Influence on Market Indices: Many of the largest market cap companies significantly influence major stock indices like the S&P 500 or the Dow Jones Industrial Average. Their performance can sway market sentiment broadly.
Here are some of the stocks with the highest market caps:
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Apple Inc. (AAPL)
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Microsoft Corporation (MSFT)
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Amazon.com Inc. (AMZN)
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Alphabet Inc. (GOOGL)
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Tesla Inc. (TSLA)
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Berkshire Hathaway Inc. (BRK.A)
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NVIDIA Corporation (NVDA)
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Meta Platforms Inc. (META)
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Johnson & Johnson (JNJ)
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Exxon Mobil Corporation (XOM)
When considering market cap as a measure of popularity, it’s important to understand that these companies are often seen as the backbone of many investment portfolios due to their size, influence, and perceived stability. However, high market cap doesn’t always equate to high returns; it often suggests a safer, more predictable investment, which might appeal to those with a lower risk tolerance or looking for long-term growth and dividend income. A financial advisor can help you use metrics to estimate the potential risk and reward in a given investment.
Popular Stocks: Most Searched
Finally, you can judge popularity by interest, or curiosity. Here, you can look for the stocks that have the highest search volume on Google. That’s a strong proxy for an asset’s “buzz,” how interested people are in it. For example, SEMRush data shows data for the monthly volume of searches for the following high-market-cap companies:
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NVIDIA (NVDA) – 5 million monthly searches
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Tesla (TSLA) – 3.2 million monthly searches
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Microsoft (MSFT) – 1.9 million monthly searches
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Amazon (AMZN) – 1.7 million monthly searches
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Apple (AAPL) – 1.2 million monthly searches
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Google (GOOG) – 751,000 monthly searches
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Broadcom (AVGO) – 315,000 monthly searches
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J.P. Morgan (JPM) – 268,000 monthly searches
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Walmart (WMT) – 236,000 monthly searches
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Eli Lilly (LLY) – 220,000 monthly searches
Search popularity can be a good way to predict trends and try to scout the market. But it’s important to remember that interest doesn’t necessarily mean confidence. Make sure to look up why everyone is talking about a given stock. After all, searches and discussion will jump after a disaster just as much as a triumph. To stay up to date on news that may impact the stock market, sign up for the Market Minute newsletter.
The Bottom Line
If you’re looking to invest in individual equities, often a good place to start is by looking at the popular stocks. What are people buying, selling, holding and discussing? Then, and this is the most important part, you need to look up why these stocks are popular to determine if they’ll fit in your personal strategy.
Tips on Risk Management
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How can you catch yourself following the herd? After all, plenty of other investors will jump in on a good asset, so there’s probably going to be a herd no matter what you do. So one good option is to follow these nine risk management strategies to keep investing in smart assets.
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A financial advisor can help you build a comprehensive retirement plan. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
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Keep an emergency fund on hand in case you run into unexpected expenses. An emergency fund should be liquid — in an account that isn’t at risk of significant fluctuation like the stock market. The tradeoff is that the value of liquid cash can be eroded by inflation. But a high-interest account allows you to earn compound interest. Compare savings accounts from these banks.
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Are you a financial advisor looking to grow your business? SmartAsset AMP helps advisors connect with leads and offers marketing automation solutions so you can spend more time making conversions. Learn more about SmartAsset AMP.
Photo credit: Grok, Grok, ©iStock.com/gorodenkoff
This is not an offer to buy or sell any security or interest. All investing involves risk, including loss of principal. This article IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT INTENDED TO PROVIDE LEGAL ADVICE, TAX ADVICE, ACCOUNTING ADVICE OR FINANCIAL ADVICE. Before making any final decisions or implementing any financial strategy, you should consider obtaining additional information and advice from your accountant or other financial advisers who are fully aware of your individual circumstances. SmartAsset’s services are limited to referring users to third party advisers registered or chartered as fiduciaries (“Adviser(s)”) with a regulatory body in the United States that have elected to participate in our matching platform based on information gathered from users through our online questionnaire. We do not manage client funds or hold custody of assets, we help users connect with relevant financial advisors.
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