Robinhood (HOOD): A Top Fintech Stock to Watch in 2025

We recently put together a list of the 12 Top Fintech Stocks to Consider Purchasing in 2025 In this piece, we will examine how Robinhood Markets, Inc. (NASDAQ:HOOD) measures up against other financial technology companies.

The combination of the terms finance and technology gives rise to the word "fintech." This broad sector encompasses businesses that incorporate advanced technology into their financial processes. Examples of fintech firms include startups that design peer-to-peer money transfer apps as well as entities that craft cutting-edge digital payment systems.

A lot of fintech stocks have bounced back since the downturn following the COVID-19 pandemic; however, these stocks remain significantly lower than their highest points as we get closer to 2025. Despite this, the fintech sector holds considerable promise for substantial growth over the longer term.

By 2025, fintech shows signs of recovery. In the last quarter of 2024, global fintech investments climbed to $8.5 billion, marking a 12% rise compared to the prior quarter, as reported by CB Insights. Despite an annual decrease of 20% for all of 2024 when contrasted with the preceding year, this marks considerable progress following the respective dips of 48% and 44% witnessed in 2023 and 2022, indicating that financial inflows into the sector have found stability once more.

The regulatory mood is changing as well. For instance, on January 21, Travis Hill, who was serving as the acting chairman of the Federal Deposit Insurance Corporation, outlined several key focuses in a published statement, which included strategies for moving forward.

Embrace a more inclusive attitude towards innovation and adopting new technologies, including greater transparency in fintech collaborations and dealings with digital assets and tokenization, along with proactive involvement to tackle rising technological expenses for community banks.

This implies a less stringent regulatory environment, potentially encouraging a revival in fintech initiatives.

The indication that major fintech firms like the Swedish 'buy now, pay later' company Klarna and digital bank Chime are planning to go public suggests that the sector may be rebounding from challenging times. Additionally, because tracking finances is essential for thriving in public markets, this move likely signifies an enhancement in profit potential—a key challenge previously faced by the fintech industry.

Tyler Griffin, the managing partner and co-founder of Restive Partners, told American Banker:

I'd wager that the CFO of every later stage, privately backed firm is at least looking into what a potential initial public offering in the short term would entail.

The financial technology sector has always been dynamic, constantly pushing boundaries and disrupting established norms. Over recent years, advancements in technology, shifts in regulations, and various economic upheavals have significantly transformed traditional banking services. By 2024, artificial intelligence had seen an unprecedented surge within fintech, primarily utilized internally for enhancing operational efficiencies and detecting fraudulent activities. Nevertheless, concerns over precision and data privacy still hinder broader customer-focused implementations. A study conducted by Deloitte revealed that around one-third of businesses view practical inaccuracies as the primary barrier to adopting generative AI in finance. This hesitance stems from strict regulatory requirements concerning direct interactions between AI-powered solutions and clients. Despite these challenges, corporate acceptance rates are rapidly increasing. For instance, just twelve months after launching, Morgan Stanley integrated "Debrief," an assistance tool powered by OpenAI. Similarly, BNY Mellon has collaborated with OpenAI for multiple years now.

Our Methodology

To compile our list for this article, we examined various Fintech Exchange-Traded Funds (ETFs) along with online ratings to create an initial roster featuring 25 Fintech Stocks. After analyzing these data points, we selected the top 12 stocks based on their popularity among hedge fund investors during quarter four of 2024, utilizing Insider Monkey’s comprehensive record of over 1009 hedge funds. In situations where multiple stocks had equal interest from hedge funds, we broke ties by considering each company's annual revenue growth rate.

Why do we focus on the stocks that hedge funds amass? It’s straightforward: our studies indicate that mimicking the leading stock choices from premier hedge funds allows us to surpass market performance. Each quarter, our quarterly newsletter recommends 14 small-cap and large-cap stocks based on this approach. Since May 2014, these selections have yielded a return of 373.4%, exceeding their benchmark by 218 percentage points. see more details here ).

An accomplished entrepreneur adeptly handling their financial matters using a smartphone.

Robinhood Markets, Inc. (NASDAQ: HOOD )

Number of Hedge Fund Owners: 79

Revenue Growth (YoY): 58.23%

Starting as a basic trading application, Robinhood Markets, Inc. (NASDAQ:HOOD) has transformed into an extensive financial services platform with multiple income sources, positioning itself as one of the leading options. Best Fintech Stocks. This encompasses trading fees, interest income, and subscriptions. Recently, the company disclosed robust customer engagement, increased interest income, and unprecedented profit margins along with record-breaking revenues. Despite the recent spike in its stock price, the firm remains relatively undervalued considering its growth prospects. Having pioneered zero-commission trades for equities, derivatives, and digital currencies, the business has expanded into offering advanced subscription plans, money management tools, and retirement account services. By diversifying its sources of income through this multifaceted approach, the enterprise aims to create a steadier economic foundation less dependent on volatile trade-related earnings.

The company’s future outlook remains positive, driven by several expansion factors including enhanced trading platforms, introduction of futures trading, access to international markets, and the booming crypto sector, which saw trading income jump by an impressive 700% compared to last year. The acquisition of TradePMR seeks to offer wealth management services primarily for high net worth individuals, whereas the purchase of Bitstamp strengthens its standing within the worldwide digital currency marketplace. Robinhood Markets, Inc. (NASDAQ:HOOD) continues to generate significant consumer-based revenues alongside expanding its customer base; this is evident through an 86% yearly increase in Gold membership subscriptions along with increased cash holdings and retirement account activity.

After the company's robust Q4 2024 earnings report, Needham analysts kept their "Buy" rating intact on February 13, 2025, elevating the price target from $52 to $70. Robinhood Markets, Inc. (NASDAQ:HOOD) announced an impressive 60% adjusted EBITDA margin for the period due to expansion in every sector of transactions coupled with efficient expense management. Analysts at Needham predict substantial growth in crypto trading activities during H2 2025. They also anticipate that the recently acquired Bitstamp, a cryptocurrency exchange platform, will boost the company's overall crypto trading volume by approximately 40%. This positive outlook reflects confidence in the company's ability to sustain its upward momentum via strategic moves.

Overall HOOD ranks 8th Among the top Fintech stocks expected for purchase in 2025, we recognize the appeal of HOOD as an option. However, we feel strongly that investments in Artificial Intelligence (AI) have even stronger prospects for generating substantial gains and achieving them sooner. One particular AI stock has actually increased since the start of 2025, whereas many well-known AI shares dropped roughly 25% during the same period. Should you seek an AI stock with better growth potential compared to HOOD yet priced below five times its earnings, consider reviewing our detailed analysis on this topic. cheapest AI stock .

READ NEXT: 20 Top AI Stocks to Invest in Currently and 30 Top Stocks to Purchase Currently as Recommended by Billionaires .

Disclosure: There are no conflicts of interest. This article was initially published here. Insider Monkey .