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HOOD Stock S&P 500's Top Performer: Is the Momentum Sustainable?
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Key Takeaways
Robinhood has surged 229.2% YTD, making it the S&P 500's best-performing stock.
The company is diversifying with banking, wealth tools and crypto expansion.
Acquisitions and buybacks highlight Robinhood's global ambitions and strong cash reserves.
Robinhood Markets (HOOD - Free Report) joined the S&P 500 Index on Sept. 22 as part of the index’s quarterly rebalancing. The stock is now the index's best year-to-date performer, with a whopping 229.2% surge.
In comparison, HOOD’s close peers, Charles Schwab (SCHW - Free Report) and Interactive Brokers (IBKR - Free Report) , also part of the S&P 500 Index, are not nearly close. Schwab’s shares have gained 28.1%, while Interactive Brokers' stock has jumped 47.1%. In the same time frame, the S&P 500 Index has rallied 13.8%.
HOOD’s remarkable rally is driven primarily by strong financial results, aggressive expansion into new products and markets, exceptional growth in platform assets and user accounts and favorable operating backdrop.
YTD Price Performance
Image Source: Zacks Investment Research
The rally reflects optimism around Robinhood’s improving fundamentals, including user growth, profitability prospects and product and market expansion. Such a spectacular rise raises the key question: Can the stock maintain its momentum? Let’s decode.
Robinhood’s Business Diversifying Initiatives
Robinhood has evolved from a brokerage firm primarily trading in digital assets to a more mature and diversified entity, striving to widen its market and reach. Looking at the numbers, in 2021, it mainly relied on transaction-based revenues (almost 75% of total revenues) to generate income. In the first half of 2025, this came down to nearly 54%.
Robinhood’s recent initiatives underscore its ambition to evolve into a full-scale financial services platform. The company introduced “Robinhood Social” to build a community for traders, which will enable users to follow and replicate the trades executed by prominent investors, known as “copy trading.”
The company rolled out Robinhood Strategies, Robinhood Banking and Robinhood Cortex, a suite of tools aimed at enhancing wealth management options for its Robinhood Gold members. It also introduced a prediction markets hub, giving customers the ability to trade on outcomes of major global economic and sporting events, further broadening its product ecosystem.
Event contracts gained traction when Robinhood launched them in October 2024, just before the U.S. presidential elections. Similarly, Interactive Brokers has been actively expanding its event contract offerings to capitalize on rising demand.
In February, Robinhood acquired TradePMR, a $40 billion assets under administration custodian and portfolio management platform for RIAs, strengthening its credibility in wealth management and positioning it to compete directly with incumbents like Schwab. In 2024, Robinhood acquired Pluto Capital Inc., integrating its advanced capabilities to revolutionize the investment experience for its users. Also, as part of a diversification effort, the company launched a credit card (expanding into the consumer finance space).
Robinhood: A Global Innovative Fintech Player
Robinhood has evolved significantly since the meme stock frenzy of early 2021, emerging as a serious competitor to established online brokerage players like Interactive Brokers and Schwab. The company intends to become a one-stop shop for building generational wealth globally.
To align with its goal of becoming an international player, the company has unveiled several products and services, including tokenized U.S. stock and exchange-traded fund (ETF) for European Union (EU) investors and an advanced desktop platform, Robinhood Legend, in the U.K., following its launch in the United States in October 2024.
The image below shows the company’s feature priorities for 2025:
HOOD’s Roadmap for 2025
Image Source: Robinhood Markets Inc.
Also, in May, HOOD announced an agreement to acquire Canada-based WonderFi Technologies Inc. Besides granting regulatory footing in Canada, the transaction strengthens the company’s position in a rapidly growing crypto market. In June, it acquired Luxembourg-based Bitstamp, a globally recognized cryptocurrency exchange. The deal provides Robinhood with the requisite regulatory approvals, positioning it to enter Singapore’s expanding digital assets market.
Cryptocurrencies: A Vital Catalyst for Robinhood
Robinhood’s focus on the cryptocurrency space, through increased tokenization, enhanced platform capabilities and expansion into EU markets, is expected to drive greater cost efficiency and revenue growth. The company is actively pursuing Markets in Crypto-Assets Regulation (MiCA) licenses, which would enable it to offer crypto services across the European Economic Area, expanding its reach to 27 countries.
The acquisition of Bitstamp and the impending WonderFi deal align with this broader strategy. Bitstamp’s core spot exchange, offering more than 85 tradable assets, will significantly strengthen Robinhood’s crypto product suite. Further, WonderFi brings two of Canada’s leading regulated crypto platforms, Bitbuy and Coinsquare, with more than C$2.1 billion in assets under custody. These will enable Robinhood to provide trading, staking and custody services.
As the platform diversifies and enhances its offerings, Robinhood’s cryptocurrency revenues are well-positioned for growth, supported by increasing investor interest in crypto as both a return-generating and diversification tool. Currently, Robinhood supports many major cryptocurrencies — Bitcoin, Ethereum, Dogecoin, Litecoin, Solana and Toncoin.
HOOD Rewards Shareholders
In 2024, Robinhood announced a share buyback plan (for the first time) to repurchase up to $1 billion of its outstanding common stock. In April, the company increased its existing authorization by $500 million to $1.5 billion.
As of June 30, 2025, more than $700 million worth of shares remained available for repurchase. HOOD plans to complete the remainder of its total authorization over roughly the next two years.
Robinhood is on solid ground, with significant cash reserves. As of June 30, 2025, it reported cash and cash equivalents of $4.2 billion.
Litigation & Probes Surrounding Robinhood
Robinhood operates in a highly regulated industry and is subject to the scrutiny of numerous authorities. This exposes the company to regulatory risks, resulting in hefty fines and restrictions that may affect its growth prospects.
In July, Florida Attorney General James Uthmeier initiated an investigation into Robinhood Crypto, LLC, a subsidiary of Robinhood, for alleged violation of the state’s Deceptive and Unfair Practices Act by falsely promoting its platform as the most affordable one to buy crypto. The company is also under investigation by Lithuania's central bank, its lead regulator in the EU, regarding its newly launched tokenized equity products.
Moreover, between 2023 and 2025, Robinhood faced multiple regulatory setbacks, including a $45 million fine in January 2025 for securities law violations and a $26 million FINRA settlement in March over identity verification failures. It also paid $3.9 million in 2024 for crypto withdrawal issues and $7.5 million in 2023 after losing a Massachusetts court case tied to product oversight and marketing practices.
These regulatory actions highlight ongoing compliance and oversight challenges faced by Robinhood.
Bullish Analyst Sentiments for Robinhood
Over the past week, the Zacks Consensus Estimate for 2025 and 2026 has been revised upward to $1.61 and $1.90, respectively. This reflects a bullish sentiment among analysts.
Estimate Revision Trend
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for HOOD’s earnings implies 47.7% and 18.2% year-over-year growth for 2025 and 2026, respectively.
Robinhood’s Premium Valuation
HOOD shares are trading at a massive premium to the industry. At present, the company has a price/book (P/B) of 13.5X compared with the industry average of 2.37X.
P/B
Image Source: Zacks Investment Research
Further, HOOD stock looks expensive compared with its peers, Schwab and Interactive Brokers. Schwab and Interactive Brokers have a P/B of 4.03X and 5.95X, respectively.
Can HOOD Uphold its Leading Position in the S&P 500 Index?
Robinhood’s swift rise shows investors' confidence in its rapid transformation into a diversified, global financial services platform. The company has moved well beyond its roots in retail brokerage, expanding into wealth management, advisory services and consumer finance. Its has bolstered its growing international footprint by tapping into high-growth crypto and fintech markets.
Robinhood’s evolving product suite caters to a younger, tech-savvy investor base, while its declining reliance on transaction-based revenue reflects increasing business maturity.
Solid liquidity, a $1.5 billion buyback program and robust user growth amid rising digital asset adoption reinforce bullish sentiments and lofty valuation for HOOD stock. Although regulatory scrutiny remains a headwind, Robinhood’s innovation-driven growth strategy and expanding global presence are expected to keep the momentum going.
Image: Bigstock
HOOD Stock S&P 500's Top Performer: Is the Momentum Sustainable?
Key Takeaways
Robinhood Markets (HOOD - Free Report) joined the S&P 500 Index on Sept. 22 as part of the index’s quarterly rebalancing. The stock is now the index's best year-to-date performer, with a whopping 229.2% surge.
In comparison, HOOD’s close peers, Charles Schwab (SCHW - Free Report) and Interactive Brokers (IBKR - Free Report) , also part of the S&P 500 Index, are not nearly close. Schwab’s shares have gained 28.1%, while Interactive Brokers' stock has jumped 47.1%. In the same time frame, the S&P 500 Index has rallied 13.8%.
HOOD’s remarkable rally is driven primarily by strong financial results, aggressive expansion into new products and markets, exceptional growth in platform assets and user accounts and favorable operating backdrop.
YTD Price Performance
Image Source: Zacks Investment Research
The rally reflects optimism around Robinhood’s improving fundamentals, including user growth, profitability prospects and product and market expansion. Such a spectacular rise raises the key question: Can the stock maintain its momentum? Let’s decode.
Robinhood’s Business Diversifying Initiatives
Robinhood has evolved from a brokerage firm primarily trading in digital assets to a more mature and diversified entity, striving to widen its market and reach. Looking at the numbers, in 2021, it mainly relied on transaction-based revenues (almost 75% of total revenues) to generate income. In the first half of 2025, this came down to nearly 54%.
Robinhood’s recent initiatives underscore its ambition to evolve into a full-scale financial services platform. The company introduced “Robinhood Social” to build a community for traders, which will enable users to follow and replicate the trades executed by prominent investors, known as “copy trading.”
The company rolled out Robinhood Strategies, Robinhood Banking and Robinhood Cortex, a suite of tools aimed at enhancing wealth management options for its Robinhood Gold members. It also introduced a prediction markets hub, giving customers the ability to trade on outcomes of major global economic and sporting events, further broadening its product ecosystem.
Event contracts gained traction when Robinhood launched them in October 2024, just before the U.S. presidential elections. Similarly, Interactive Brokers has been actively expanding its event contract offerings to capitalize on rising demand.
In February, Robinhood acquired TradePMR, a $40 billion assets under administration custodian and portfolio management platform for RIAs, strengthening its credibility in wealth management and positioning it to compete directly with incumbents like Schwab. In 2024, Robinhood acquired Pluto Capital Inc., integrating its advanced capabilities to revolutionize the investment experience for its users. Also, as part of a diversification effort, the company launched a credit card (expanding into the consumer finance space).
Robinhood: A Global Innovative Fintech Player
Robinhood has evolved significantly since the meme stock frenzy of early 2021, emerging as a serious competitor to established online brokerage players like Interactive Brokers and Schwab. The company intends to become a one-stop shop for building generational wealth globally.
To align with its goal of becoming an international player, the company has unveiled several products and services, including tokenized U.S. stock and exchange-traded fund (ETF) for European Union (EU) investors and an advanced desktop platform, Robinhood Legend, in the U.K., following its launch in the United States in October 2024.
The image below shows the company’s feature priorities for 2025:
HOOD’s Roadmap for 2025
Image Source: Robinhood Markets Inc.
Also, in May, HOOD announced an agreement to acquire Canada-based WonderFi Technologies Inc. Besides granting regulatory footing in Canada, the transaction strengthens the company’s position in a rapidly growing crypto market. In June, it acquired Luxembourg-based Bitstamp, a globally recognized cryptocurrency exchange. The deal provides Robinhood with the requisite regulatory approvals, positioning it to enter Singapore’s expanding digital assets market.
Cryptocurrencies: A Vital Catalyst for Robinhood
Robinhood’s focus on the cryptocurrency space, through increased tokenization, enhanced platform capabilities and expansion into EU markets, is expected to drive greater cost efficiency and revenue growth. The company is actively pursuing Markets in Crypto-Assets Regulation (MiCA) licenses, which would enable it to offer crypto services across the European Economic Area, expanding its reach to 27 countries.
The acquisition of Bitstamp and the impending WonderFi deal align with this broader strategy. Bitstamp’s core spot exchange, offering more than 85 tradable assets, will significantly strengthen Robinhood’s crypto product suite. Further, WonderFi brings two of Canada’s leading regulated crypto platforms, Bitbuy and Coinsquare, with more than C$2.1 billion in assets under custody. These will enable Robinhood to provide trading, staking and custody services.
As the platform diversifies and enhances its offerings, Robinhood’s cryptocurrency revenues are well-positioned for growth, supported by increasing investor interest in crypto as both a return-generating and diversification tool. Currently, Robinhood supports many major cryptocurrencies — Bitcoin, Ethereum, Dogecoin, Litecoin, Solana and Toncoin.
HOOD Rewards Shareholders
In 2024, Robinhood announced a share buyback plan (for the first time) to repurchase up to $1 billion of its outstanding common stock. In April, the company increased its existing authorization by $500 million to $1.5 billion.
As of June 30, 2025, more than $700 million worth of shares remained available for repurchase. HOOD plans to complete the remainder of its total authorization over roughly the next two years.
Robinhood is on solid ground, with significant cash reserves. As of June 30, 2025, it reported cash and cash equivalents of $4.2 billion.
Litigation & Probes Surrounding Robinhood
Robinhood operates in a highly regulated industry and is subject to the scrutiny of numerous authorities. This exposes the company to regulatory risks, resulting in hefty fines and restrictions that may affect its growth prospects.
In July, Florida Attorney General James Uthmeier initiated an investigation into Robinhood Crypto, LLC, a subsidiary of Robinhood, for alleged violation of the state’s Deceptive and Unfair Practices Act by falsely promoting its platform as the most affordable one to buy crypto. The company is also under investigation by Lithuania's central bank, its lead regulator in the EU, regarding its newly launched tokenized equity products.
Moreover, between 2023 and 2025, Robinhood faced multiple regulatory setbacks, including a $45 million fine in January 2025 for securities law violations and a $26 million FINRA settlement in March over identity verification failures. It also paid $3.9 million in 2024 for crypto withdrawal issues and $7.5 million in 2023 after losing a Massachusetts court case tied to product oversight and marketing practices.
These regulatory actions highlight ongoing compliance and oversight challenges faced by Robinhood.
Bullish Analyst Sentiments for Robinhood
Over the past week, the Zacks Consensus Estimate for 2025 and 2026 has been revised upward to $1.61 and $1.90, respectively. This reflects a bullish sentiment among analysts.
Estimate Revision Trend
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for HOOD’s earnings implies 47.7% and 18.2% year-over-year growth for 2025 and 2026, respectively.
Robinhood’s Premium Valuation
HOOD shares are trading at a massive premium to the industry. At present, the company has a price/book (P/B) of 13.5X compared with the industry average of 2.37X.
P/B
Image Source: Zacks Investment Research
Further, HOOD stock looks expensive compared with its peers, Schwab and Interactive Brokers. Schwab and Interactive Brokers have a P/B of 4.03X and 5.95X, respectively.
Can HOOD Uphold its Leading Position in the S&P 500 Index?
Robinhood’s swift rise shows investors' confidence in its rapid transformation into a diversified, global financial services platform. The company has moved well beyond its roots in retail brokerage, expanding into wealth management, advisory services and consumer finance. Its has bolstered its growing international footprint by tapping into high-growth crypto and fintech markets.
Robinhood’s evolving product suite caters to a younger, tech-savvy investor base, while its declining reliance on transaction-based revenue reflects increasing business maturity.
Solid liquidity, a $1.5 billion buyback program and robust user growth amid rising digital asset adoption reinforce bullish sentiments and lofty valuation for HOOD stock. Although regulatory scrutiny remains a headwind, Robinhood’s innovation-driven growth strategy and expanding global presence are expected to keep the momentum going.
At present, Robinhood sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.