We recently compiled a list of the 12 Best Fintech Stocks to Buy in 2025. In this article, we are going to take a look at where Robinhood Markets, Inc. (NASDAQ:HOOD) stands against the other fintech stocks.
The terms finance and technology are combined to form the term fintech. This wide category includes companies that integrate modern technology into financial operations. Fintech companies include, for instance, those that create and run person-to-person payment applications and those that develop innovative digital payment processing solutions.
Many fintech stocks have recovered from the post-COVID-19 down market, but they are still well below their peak as we approach 2025. Nonetheless, the fintech industry has numerous opportunities for long-term potential.
In 2025, fintech is beginning to rebound. Global fintech funding rose to $8.5 billion in Q4 of 2024, a 12% increase from the previous quarter, according to CB Insights. While overall 2024 funding decreased 20% year on year, this is a significant improvement from the 48% and 44% declines in 2023 and 2022, respectively, showing that capital flows to the industry have stabilized.
The regulatory sentiment is also altering. For example, in a statement released on January 21, Travis Hill, acting chairman of the Federal Deposit Insurance Corporation, provided a list of priorities, including plans to
“adopt a more open-minded approach to innovation and technology adoption, which includes a more transparent approach to fintech partnerships and to digital assets and tokenization, and engagement to address growing technology costs for community banks.”
This suggests a more relaxed regulatory framework, which could stimulate a resurgence of fintech activity.
The fact that some of the biggest fintech companies, such as Swedish buy now, pay later unicorn Klarna and neobank Chime, are now indicating plans to go public is another significant clue that the industry is recovering from the blues. Furthermore, since financial monitoring is a crucial component of public markets, this probably signals profitability improvement, which has been a significant difficulty for the fintech industry.
Tyler Griffin, managing partner and cofounder of Restive Partners, stated to American Banker:
“I’d bet that the chief financial officer of every late-stage, privately funded company is at least exploring what an IPO in the near term looks like.”
The financial technology industry has never been static; rather, it thrives on challenging the status quo. Financial services have changed in recent years due to a combination of technological developments, regulatory changes, and economic disruptions. In 2024, fintech saw a massive spike in the usage of AI, mostly for internal use cases like operational efficiency and fraud detection. However, issues with accuracy and privacy continue to restrict consumer-facing applications. According to a Deloitte survey, the biggest obstacle to generative AI adoption in financial services, according to 35% of enterprises, is real-world errors. Financial organizations are hesitant to use AI tools directly with customers because of regulatory sensitivities. Nonetheless, enterprise adoption is speeding up. Within a year, Morgan Stanley introduced its “Debrief” assistant, which OpenAI powers. Meanwhile, BNY Mellon and OpenAI have partnered for several years.
Our Methodology
For this article, we sifted through the Fintech ETFs and online rankings to form an initial list of the 25 Fintech Stocks. From the resultant dataset, we chose 12 stocks with the highest number of hedge fund investors, using Insider Monkey’s database of 1009 hedge funds in Q4 2024 to gauge hedge fund sentiment for stocks. We have used the stock’s revenue growth year-over-year as a tie-breaker in case two or more stocks have the same number of hedge funds invested.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A successful business person confidently managing their finances on a mobile device.
Robinhood Markets, Inc. (NASDAQ:HOOD)
Number of Hedge Fund Holders: 79
Revenue Growth (YoY): 58.23%
From a simple trading app, Robinhood Markets, Inc. (NASDAQ:HOOD) has evolved into a full-fledged financial platform with many revenue streams, making it one of the Best Fintech Stocks. It includes trading fees, interest income, and subscriptions. The company recently revealed strong customer engagement, more interest income, and record profits and revenue. The firm’s growth trajectory is still inexpensive, even with the stock’s recent surge. Although it was the first to offer commission-free trading for stocks, options, and cryptocurrencies, the company has since grown to offer premium subscription services, cash management, and retirement accounts. This multi-revenue strategy builds a more stable financial base by lowering reliance on unpredictable trading activities.
The company’s development prospects remain optimistic, with various expansion drivers: improved trading tools, futures trading, international market entry, and the thriving crypto segment, where trading revenue has surged by 700% year on year. While the TradePMR acquisition aims to provide financial advising services to higher-net-worth clients, the Bitstamp acquisition solidifies its position in the global cryptocurrency market. Robinhood Markets, Inc. (NASDAQ:HOOD) is successfully generating revenue from consumers while growing its clientele, as seen by the 86% annual growth in Gold memberships, as well as the rise in cash deposits and retirement accounts.
Following the company’s impressive Q4 2024 performance, Needham analysts maintained their “Buy” recommendation on the firm on February 13, 2025, raising the price target from $52 to $70. Robinhood Markets, Inc. (NASDAQ:HOOD) reported a strong 60% adjusted EBITDA margin for the quarter, owing to growth across all transaction sectors and effective cost control. According to Needham analysts, the amount of cryptocurrency trade is expected to expand significantly in the second half of 2025. The recent acquisition of Bitstamp, a cryptocurrency exchange, by the business is anticipated to raise the company’s cryptocurrency trading volumes by 40%. Needham’s optimistic assessment shows faith in the company’s capacity to maintain its growth trajectory through calculated actions.
Overall HOOD ranks 8th among the best fintech stocks to buy in 2025. While we acknowledge the potential of HOOD as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. 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 this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.