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Why Robinhood Stock Is Soaring—and What Comes Next

Written by Gabriel Osorio-Mazilli. Published 9/22/2025.

 

It’s official: the long-awaited decision by the Federal Reserve (the Fed) is in—interest rates have been cut, and the market’s initial reaction matters now more than ever.

The day after the announcement, the financial sector led the S&P 500 higher, signaling where the next leg of market upside may emerge.

At the center of this rally is Robinhood Markets Inc. (NASDAQ: HOOD). As both a fintech innovator and a gateway for retail investors, Robinhood stands to benefit directly from this macro shift—lower rates ease pressure on retail traders and spark volatility, two key drivers of its revenue model. New account openings, fresh capital inflows and increased trading activity have positioned the company for strong momentum.

The recent breakout in Robinhood’s stock reflects more than sentiment; it’s grounded in real financial momentum that merits a closer look.

Robinhood’s Growth Engine Is Firing on All Cylinders

Robinhood’s latest earnings release delivered a clear message: growth is accelerating. Net revenues jumped 45% year-over-year (YOY) to $989 million—no small feat for a platform managing $107.4 billion in assets. Net deposits surged 99% YOY, driving assets under custody to $279 billion and suggesting that newer users are bringing more capital than ever before.

Customer acquisition remains a major driver: funded accounts rose 10% YOY to 26.5 million, reinforcing Robinhood’s position as a go-to destination for retail investors. Even more notable is the rising quality of these customers.

Robinhood is no longer just an entry-level offering; its growing asset base indicates that more affluent investors are choosing the platform. Management has leveraged this influx to strengthen the company’s path to future profitability.

Meanwhile, average revenue per user (ARPU)—a key driver of bottom-line earnings—climbed 34% YOY to $151. As markets reawaken and trading volumes pick up, ARPU is poised to rise further, boosting net income in the quarters ahead.

Robinhood Stock Hits All-Time Highs, But Is It Just the Beginning?

Robinhood stock is currently trading at an all-time high, reflecting market confidence in its earnings potential, especially as the Fed’s pivot drives more business its way.

With a price-to-earnings (P/E) ratio of 61.4×, Robinhood trades at a notable premium to the financial sector average of 17.6×. While some investors may balk at the valuation, growth-oriented buyers recognize that premium multiples often follow premium performance—exactly what Robinhood is delivering.

Others remain willing to pay up for stocks they believe can outperform peers and the broader market.

That optimism shows up in analyst revisions. The consensus price target currently sits at $101.88—slightly below recent levels—yet Mizuho’s Dan Dolev sees more room to run. In a September 2025 note, he reiterated an Overweight rating and set a $145 price target, implying roughly 20% upside from today’s levels.

That helps explain why investors piled into Robinhood once the Fed pivoted—and why the stock’s rally may only be getting started.