What Happened?
Shares of digital financial services company SoFi Technologies (NASDAQ: SOFI) jumped 4.6% in the morning session after the company announced the launch of SoFiUSD, a U.S. dollar-backed stablecoin, positioning itself as a key infrastructure provider for other banks, fintechs, and enterprise partners.
Issued by SoFi Bank, the stablecoin aimed to streamline operations for commercial clients with faster and more efficient money movement. The move made SoFi one of the first national banks to offer open access to its own stablecoin infrastructure. This development occurred as stablecoins started to transition into a foundational part of the global financial system, backed by increased institutional confidence and clearer regulations.
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What Is The Market Telling Us
SoFi’s shares are extremely volatile and have had 46 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 4 months ago when the stock gained 7.4% on the news that Federal Reserve Chair Jerome Powell's dovish remarks signaled that interest rate cuts may be warranted.
Federal Reserve Chair Jerome Powell struck a notably dovish tone, signaling that interest rate cuts may be warranted if the economic slowdown deepens. This pivot is significant for high-growth companies like SoFi, which are sensitive to interest rate expectations. Lower rates reduce the discounting effect on future earnings and decrease borrowing costs, bolstering valuations for growth stocks. The favorable macro environment comes as SoFi has demonstrated strong underlying performance. The company's stock has already risen significantly this year, supported by factors including a robust second-quarter performance and impressive growth in its lending platform. Following its recent results, Mizuho raised its price target for SoFi to $26, and Needham increased its target to $25, maintaining a Buy rating.
SoFi is up 88.6% since the beginning of the year, but at $26.65 per share, it is still trading 17.3% below its 52-week high of $32.21 from November 2025. Investors who bought $1,000 worth of SoFi’s shares 5 years ago would now be looking at an investment worth $2,375.
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