Shares of Robinhood Markets Inc. (NASDAQ: HOOD) have been one of the most exciting stories in the financial sector, as the company that has single-handedly done the most to democratize markets and information to everyday retail investors. This mission has earned the brand popularity and adoption over the years. However, management didn’t stop there, knowing that growth opportunities are still everywhere.
[content-module:CompanyOverview|NASDAQ: HOOD]After implementing more services and features, such as retirement account management, a “gold” card with attractive rewards for each dollar spent, and even a high-yield savings feature, all the company's key performance indicators (KPIs) have shown the market why this stock has gone on such a tear quarter after quarter. If this weren’t enough, a new catalyst is in the works for the company that could make it a vital player for all Americans.
An announcement has been made that Robinhood stock is now one of several candidates on a list of stocks that could be added to the broader S&P 500 index. While this is not yet a confirmation, and the old Wall Street saying of “buy the rumor and sell the news” could be at play here, it does not detract from a few other factors that are behind this stock’s success.
Robinhood Stock: A Winner Today
There has to be a broader, less speculative reason behind the 92% rally that Robinhood has rewarded investors with over the past six months. This rally had started long before the potential S&P 500 addition news had even been floated around the market, making the announcement a cherry on top.
Of course, if Robinhood does not make the cut to join the index, many disappointed investors could all run for the exits at the same time, but that does not make the stock a “let go” candidate for other portfolios—far from it. If any discount whatsoever comes from Robinhood not making the cut, it could very well be a buying opportunity.
The reason is that Robinhood’s market share and popularity have translated into not only growth in its presence within the industry but also continued financial growth, which will work to keep expanding the business valuation on a fundamental level.
There’s also a new ace up the company’s sleeve in trying to tap into the growth engine that has come out of the cryptocurrency markets. On Tuesday, June 3, 2025, management completed the acquisition of cryptocurrency exchange Bitstamp for $200 million, a decision that was welcomed by the markets through positive price action. This now allows Robinhood to combine its leading equities, options, and cryptocurrency trading capabilities to mark its place in the financial industry as a leader and innovator, a theme that will surely be reflected in future valuations.
Following the news of the finalized deal on Tuesday, HOOD shares closed at $71.72, resulting in a four-year high for the stock. Pre-market trading on Wednesday saw the stock price rise modestly, reaching nearly $72.00.
[content-module:TradingView|NASDAQ: HOOD]What Drives Robinhood’s Success
Perhaps it is the array of products and services the platform offers or its ease of use among new and seasoned investors alike; whatever the reason may be, it is undeniable that Robinhood’s platform has seen stellar growth year after year, with no signs of slowing down anytime soon.
In fact, when investors dig into Robinhood’s latest quarterly earnings presentation, they will see some of these other indicators at play. For starters, the sheer level of users can be credited for the broader success this platform has had since there was an increase of 1.9 million over the past 12 months to reach a high of 25.8 million users in total.
These users have also decided to bring their investable assets to Robinhood, helping the brand reach a net assets under custody figure of $221 billion, a 70% increase compared to the first quarter of 2024. These deposits enable Robinhood to generate interest on uninvested cash, invest in new initiatives, and develop new offerings.
Those offerings and services have enabled Robinhood to boast up to $927 million in total revenues, or $3.3 billion over a 12-month period. Also, understanding that Robinhood’s business model, a software company at its core, allows for high margins overall, investors can see how easily this company can compound value and earnings nearly on autopilot.
Today’s Market Is Ripe for Robinhood
Another indicator to consider is the trading volume on the platform, which reached $413 billion for equities and $500 million for stock options as of the first quarter of 2025. These volumes (and the associated fees) are likely to report significant growth by the time the next quarter arrives.
The reason is that President Trump's recently announced trade tariffs have triggered new levels of volatility in the S&P 500 index, causing trading activity to rise accordingly. With this in mind, investors can combine the growth in users, deposits, and trading activity to land on positive earnings per share (EPS) expectations moving forward.
This is why, regardless of the outcome of the S&P 500 addition, investors can rest assured that Robinhood can continue to deliver positive returns, whether purchased at a discount following the news or on a breakout.
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