Robinhood Markets, Inc. (HOOD): A Bull Case Theory

We came across a bullish thesis on Robinhood Markets, Inc. (HOOD) on Chit Chat Stocks’ Substack. In this article, we will summarize the bulls’ thesis on HOOD. Robinhood Markets, Inc. (HOOD)’s share was trading at $65.14 as of 28^th May. HOOD’s trailing and forward P/E were 37.73 and 44.25 respectively according to Yahoo Finance.

Robinhood’s business practices may be widely disliked, and many—including myself—would never personally use the platform for trading or financial services due to a lack of trust. The same sentiment extends to companies like Philip Morris International, McDonald’s, and PepsiCo. However, personal distaste does not mean one should avoid owning their stocks. Investing in so-called “sin stocks” does not change their practices, but allows investors to benefit from their profitability.

This perspective even leads to the ironic thought that charities focused on lung cancer should own tobacco stocks to claim those lucrative dividends rather than letting others profit selfishly. Robinhood shares have surged an impressive 700% since early 2023, driven by a compelling growth story. A key bull argument centers on Robinhood’s vast user base, primarily young and currently under-monetized, providing significant upside for future growth in average revenue per user (ARPU).

Supporting this thesis, data from Finchat reveals that while Robinhood’s total funded customers have remained relatively flat since 2021, assets under custody have grown exponentially at a 71% annualized rate since 2017. Despite the controversy and ethical concerns, Robinhood’s robust growth metrics make it difficult to ignore as an investment opportunity. Leaving personal feelings aside, the stock deserves serious attention on any watchlist due to its strong user engagement, expanding asset base, and untapped monetization potential.

Previously, we have covered Robinhood Markets, Inc. (HOOD) in May 2025 wherein we summarized a bullish thesis by TyNads on the Value Investing Subreddit. The user highlighted the company’s shift from a trading app to a broad financial services provider, reporting strong Q1 results and expanding offerings like banking and AI portfolios. With high user retention and a $1.5 billion buyback, the company showed significant growth potential. Since our last coverage, the stock is up 4.1% as of 28^th May.

Robinhood Markets, Inc. (HOOD) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 76 hedge fund portfolios held HOOD at the end of the first quarter which was 79 in the previous quarter. While we acknowledge the risk and potential of HOOD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than HOOD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

Disclosure: None. This article was originally published at Insider Monkey.