Americans born between 1997 and 2012 belong to Generation Z, meaning Gen Z workers and consumers now range from 11 to 26 years old. As with any generation, young Gen Z adults interact and shop differently than older generations, and long-term investors would be wise to recognize key trends among the fastest-growing generation of consumers. Bank of America estimates Gen Z income will increase by fivefold to $33 trillion by 2030 and will surpass millennial income by 2031.
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Here are nine of the best Gen Z stocks to buy, according to Bank of America:
| Stock | Implied upside over April 20 close |
| Meta Platforms Inc. (ticker: META) | 7.9% |
| Walt Disney Co. (DIS) | 37.7% |
| Nvidia Corp. (NVDA) | 14.4% |
| Amazon.com Inc. (AMZN) | 30% |
| Alphabet Inc. (GOOG, GOOGL) | 18.7% |
| Farfetch Ltd. (FTCH) | 221.1% |
| Peloton Interactive Inc. (PTON) | 109.3% |
| Starbucks Corp. (SBUX) | 28.9% |
| PayPal Holdings Inc. (PYPL) | 52.2% |
Meta Platforms Inc. (META)
Meta Platforms is a market leader in social media and online advertising and is the owner of Facebook, Instagram and other popular platforms. Not surprisingly, Bank of America has named Meta one of the top Gen Z stocks in the social media category. Analyst Justin Post says Meta’s recent layoffs and other cost-cutting measures will help preserve earnings in the near term. Post says additional cost cutting, artificial intelligence integration and Reels monetization will be major growth drivers in the next three to five years. Bank of America has a “buy” rating and $230 price target for META stock, which closed at $213.07 on April 20.
Walt Disney Co. (DIS)
Walt Disney is one of the largest and most diversified media and entertainment companies in the world and is one of Bank of America’s top Gen Z stocks in the media and entertainment category. Analyst Jessica Reif Ehrlich says Disney has best-in-class assets, including TV and movie content, intellectual property and theme parks. Ehrlich says CEO Bob Iger’s spending discipline should help support investor sentiment. In addition, she says robust theme park demand, sports betting optionality for ESPN and potential strategic updates are potential bullish catalysts. Bank of America has a “buy” rating and $135 price target for DIS stock, which closed at $98.07 on April 20.
Nvidia Corp. (NVDA)
Nvidia is a leader in high-end graphics and mobile processors for personal computers, workstations and mobile devices. The company is exposed to several long-term technology growth trends, including artificial intelligence, cloud computing and autonomous vehicles. However, Bank of America named Nvidia a top Gen Z stock pick in the video games category because of its high-end personal computing chips. Analyst Vivek Arya says Nvidia recently announced numerous product and partnership updates at its GTC conference that underscore the company’s expanding total addressable market. Bank of America has a “buy” rating and $310 price target for NVDA stock, which closed at $271.04 on April 20.
Amazon.com Inc. (AMZN)
Amazon is the unrivaled market leader in e-commerce and public cloud services. Gen Z consumers are known for their online shopping, so it’s no surprise that Bank of America named Amazon a top Gen Z stock in the e-commerce category. Post says Amazon Web Services growth has proven susceptible to the pullback in technology sector spending, and he recently cut his projection for 2023 AWS sales growth from 15% to 11%. However, he is still bullish on the long-term growth trajectory for cloud services. Bank of America has a “buy” rating and $135 price target for AMZN stock, which closed at $103.81 on April 20.
Alphabet is the parent company of Google and YouTube and is a global leader in online advertising. YouTube is extremely popular among Gen Z Americans, but Bank of America named Alphabet a top Gen Z stock in the smart devices category. In addition to Google’s popular smartphones and Google Assistant software, the company’s Nest line of smart home products includes smart displays, smart speakers, thermostats, streaming devices and security systems. Post says Alphabet provides investors with technology leadership, high profit margins and aggressive buybacks. Bank of America has a “buy” rating and $125 price target for GOOGL stock, which closed at $105.29 on April 20.
Farfetch Ltd. (FTCH)
Farfetch is an online luxury marketplace and one of Bank of America’s top Gen Z stock picks in the digital luxury category. Analyst Geoffroy de Mendez says Farfetch is positioned to generate greater than 20% annual revenue growth and expand margins from -4% to +10% over the next three years. In fact, de Mendez says Farfetch is the “undisputed industry leader in online luxury” with potential to beat depressed earnings expectations. For now, he says Farfetch must focus on executing its growth plan and rebuilding credibility. Bank of America has a “buy” rating and $14 price target for FTCH stock, which closed at $4.36 on April 20.
Peloton Interactive Inc. (PTON)
Peloton is the largest interactive fitness platform in the world with more than 3 million connected fitness subscription members as of the end of 2022. Bank of America has Peloton as a top Gen Z stock pick in the sports apparel category. Peloton experienced a major pandemic boom and post-pandemic bust. Fortunately, Post says the company’s net subscriber base is growing, and holiday promotions boosted sales. Peloton’s free cash flow is steadily improving and the company anticipates it could become profitable in the second half of 2023. Bank of America has a “buy” rating and $19 price target for PTON stock, which closed at $9.08 on April 20.
Starbucks Corp. (SBUX)
Starbucks is the leading global retailer of high-quality coffee products and is one of Bank of America’s top Gen Z stocks in the food category. Analyst Sara Senatore says Starbucks has unmatched brand strength among its competitors, and its overall numbers have been weighed down by COVID-19 lockdowns in China. However, Senatore says labor force investments and China reopenings should help Starbucks expand margins in the second half of 2023. She predicts the specialty coffee market will continue to outgrow the overall foodservice industry. Bank of America has a “buy” rating and $138 price target for SBUX stock, which closed $107.05 on April 20.
PayPal Holdings Inc. (PYPL)
PayPal is a leading digital and mobile payments company and the parent of popular mobile payment platform Venmo. Bank of America named PayPal a top Gen Z stock pick in the financial technology, or fintech, category. Analyst Jason Kupferberg says PayPal has a strong global brand, high earnings visibility, an impressive free cash flow profile and an attractive valuation. Volume trends improved early in the first quarter of 2023, and Kupferberg says the company’s $1 billion in buybacks in the fourth quarter are bullish. Bank of America has a “buy” rating and $112 price target for PYPL stock, which closed at $73.58 on April 20.
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9 Best Gen Z Stocks to Buy originally appeared on usnews.com
