Should You Forget Robinhood and Buy SoFi Instead?

Core Viewpoint - SoFi is positioned as a more resilient investment compared to Robinhood, particularly in the face of potential economic downturns due to its diversified service offerings and customer base growth [1][8]. Company Performance - SoFi has expanded its customer base to 12.6 million, marking a 35% increase year-over-year [3]. - Revenue for SoFi rose by 38% to $950 million, with non-GAAP adjusted earnings increasing by 120% to $0.11 per share [4]. - Robinhood's revenue doubled to $1.2 billion, and diluted earnings per share surged by 259% to $0.61 [4]. Service Diversification - SoFi offers a broad range of financial products, including student loan refinancing, personal loans, credit card consolidation, and renters insurance, which may help it withstand economic slowdowns [9][11]. - In contrast, Robinhood's revenue is heavily reliant on trading activities, particularly options and crypto trading, which accounted for 78% of its transaction-based revenue in Q3 [11]. Market Conditions - The market has been on a bull run since 2022, and Robinhood has not yet faced a market downturn, which could pose risks when economic conditions change [12]. - Economic indicators suggest potential challenges ahead, including job layoffs reaching a four-year high in 2025, which may affect Robinhood's trading volume as customers may reduce riskier investments [12][13]. Investment Recommendation - Given the current economic landscape and service diversification, adding SoFi to an investment portfolio may be a more prudent choice compared to Robinhood [13].