Digital bank SoFi Technologies (SOFI 2.67%) and online brokerage Robinhood Markets (HOOD +0.12%) leverage their innovative platforms to disrupt the traditional financial services sector. Strong growth has translated into impressive returns with shares of SoFi up 95% in the past year, while Robinhood stock has outperformed, climbing 246% over the same period at the time of this writing. Amid the large gains, investors may wonder if the rally can keep going.
Let's discuss which of these fintech leaders is a better buy for your portfolio today.
Image source: Getty Images.
The case for SoFi Technologies stock
SoFi Technologies has transformed from a lending specialist -- previously focused on student and personal loans -- into a comprehensive financial services platform. Its digital-first, one-stop-shop approach resonates with consumers, allowing the bank to reach 10.9 million current members, a level that has nearly doubled in just two years.
In the first quarter (for the period ended Mar. 31), adjusted net revenue surged 33% year-over-year, while adjusted earnings per share (EPS) of $0.06 climbed 200% in what SoFi Chief Executive Officer Anthony Noto described as a "tremendous start to 2025." The bank's success reflects ongoing diversification beyond lending products into more fee-based services, as members increasingly utilize additional financial products, including banking accounts, credit cards, and investing options.
NASDAQ: SOFI
Key Data Points
SoFi is now positioned for more consistently profitable growth and high-quality cash flows, adding to its investment appeal. The expectation is for trends to continue, with SoFi targeting full-year adjusted EPS between $0.27 and $0.28 -- nearly double the $0.15 result in 2024. This outlook highlights a key advantage for SoFi compared to Robinhood Markets, which faces greater earnings uncertainty, still tied to transaction volumes and shifting financial market conditions.
Investors confident in SoFi's ability to execute its growth strategy and capture market share from legacy banks have compelling reasons to buy and hold the stock for the long term.
The case for Robinhood Markets stock
As robust as SoFi's operating and financial results have been, Robinhood's recent momentum is even stronger.
In the first quarter, net revenue increased 50% year-over-year for the period ended Mar. 31, while EPS more than doubled to $0.37 from $0.17 last year. The company that redefined retail investing with its pioneering commission-free trading model is capitalizing on its extensive 25.8 million funded accounts, where users are trading more actively and directing more of their total assets to the platform.
Much of the growth story stems from the cryptocurrency market boom, which represents 43% of total transaction volume and contributed 27% of total revenue. Still, echoing SoFi Technologies, Robinhood Markets is also diversifying its product and service offerings with professional-level trading tools, banking solutions, wealth management options, and the premium Robinhood Gold subscription that all increase the company's customer wallet share. Wall Street has cheered Robinhood's traction, sending the stock up 94% year-to-date and surpassing the pandemic-era peak set in 2021.
NASDAQ: HOOD
Key Data Points
Robinhood intends to replicate its U.S. success as it expands globally, with plans to launch in the Asia Pacific region while scaling its digital assets presence through the recent acquisition of crypto exchange Bitstamp.
Robinhood's international ambitions, compared to SoFi's more domestically focused operations, could support greater long-term growth and earnings, helping justify its premium valuation. Notably, both stocks trade near 50 times their 2025 consensus EPS as a forward price-to-earnings (P/E) ratio, suggesting equal market optimism toward these fintech innovators' potential.
Investors who believe Robinhood is just getting started on its path to dominate online brokerage can consider owning the stock within a diversified portfolio.
HOOD PE Ratio (Forward) data by YCharts
My verdict: An edge to SoFi stock
Choosing between SoFi and Robinhood Markets as the better fintech stock isn't easy.
I'm bullish on both and predict each will deliver positive returns over the next year. If forced to pick just one, I'd give the edge to SoFi Technologies, which appears to be a compelling buy-the-dip opportunity with shares still down about 27% from their 52-week high. In my view, SoFi stands to benefit more from a resilient macroeconomic backdrop, fueling lending demand and earnings growth in the coming quarters as a catalyst for the stock to rally higher. Meanwhile, Robinhood must contend with lofty expectations following its recent surge that could prove difficult to beat, potentially setting the stage for renewed stock price volatility ahead.
