SoFi Technologies (SOFI 1.66%) stock was on fire until the recent Nasdaq correction. It's still crushing the market, up 62% over the past year while the S&P 500 is up 8%. But there's still time to buy in. Here's why.
The bank of the future
SoFi is an all-digital bank, and it's growing much faster than the large, traditional banks. People are attracted to its ease of use and low fees, and it's going after the young professionals who are just starting out on their financial journeys and will grow along with its platform.
It offers innovative features that speak to this population, such as access to some initial public offerings and exclusive alternative investment options. It makes everything available on its personal financial app, keeping it simple for members to manage all of their finances in one place.
NASDAQ: SOFI
Key Data Points
Members continue to sign up at high rates, and they're also engaging more with the platform as they discover the benefits. So while SoFi is nowhere near the top of the totem pole in banking, it's growing much faster than the big banks. Consider how fast its deposits are growing as compared with JPMorgan Chase and Bank of America. SoFi's total deposits were $26 billion at the end of 2024, while industry leader JPMorgan Chase had $2.4 trillion, and BofA had $2 trillion. However, SoFi's were up nearly 40% year over year, while JPMorgan chase's were roughly flat, and BofA's were up 2%.
It's like that with many metrics. SoFi continues to grow at a rapid pace, specifically in its financial services segment. Sales were up 84% in the 2024 fourth quarter, and contribution profit was up 358%. As deposits flood into its coffers, it can better leverage its loan segment, leading to higher profits for the organization. Savvy investors are recognizing the opportunities here as SoFi grows, and with SoFi stock down 23% this year, you can buy shares on the dip.
