Why Robinhood Stock Is Soaring—and What Comes Next

Key Points

• Robinhood is experiencing rapid growth across revenue, user base, and AUM, driven by increased trading activity and net deposits post-Fed rate cuts.
• Retail investor momentum is returning, and Robinhood is positioned to benefit from rising market volatility and falling interest rates.
• Despite a high valuation, analysts see upside, with bullish price targets reflecting confidence in Robinhood’s future earnings power.

It’s official: the long-awaited decision by the Federal Reserve (the Fed) is in. Interest rates have been cut, and the initial reaction from the market matter more than ever today. 

The day after the announcement, the financial sector led the way higher in the S&P 500, which serves as the ultimate message for 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 gateway for retail investors, Robinhood stands to benefit directly from this macro shift. Lower rates reduce pressure on retail traders and spark volatility—two key ingredients for Robinhood’s revenue model. With new account openings, fresh capital inflows, and increased trading activity, Robinhood finds itself in a prime position.

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

Robinhood’s Growth Engine Is Firing on All Cylinders

Robinhood’s latest earnings release delivered a strong signal to investors: growth is accelerating. Net revenues jumped 45% year-over-year (YOY) to $989 million. This growth percentage is no easy achievement for a company that has now grown to $107.4 billion in size. Net assets surged to $279 billion, fueled by net deposits that grew at a staggering 99% YOY pace. This suggests that newer Robinhood users are depositing more capital than ever before.

Customer acquisition remains a major driver. The platform’s funded accounts grew 10% YOY to 26.5 million users, reinforcing Robinhood’s position as the go-to choice for retail investors. However, it’s the quality of these customers that’s even more telling.

Essentially, Robinhood is no longer the beginner platform it once was, as the net asset base suggests that more affluent investors and consumers find the brand suitable for their investment and trading decisions. With all this growth on the table, management has taken advantage in the right way to benefit the company's future profitability.

Average revenue per user (ARPU)—a particularly important driver of bottom-line earnings—grew by 34% YOY to $151. As markets reawaken and trading volumes rise, ARPU is likely to grow even more, boosting bottom-line earnings in the process.

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 potential earning power in the coming quarters, especially as the interest rate shift is set to drive more business to it.

With a price-to-earnings (P/E) ratio of 61.4x, Robinhood trades at a premium to the financial sector average of 17.6x. While traditional value investors may balk at this valuation, growth-oriented investors understand that premium multiples often follow premium performance—and that’s exactly what Robinhood is delivering.

While traditional value investors may call this stock expensive and filled with downside potential, others may be willing to overpay for stocks they believe can outperform peers and the broader market.

This optimism is echoed in recent analyst revisions. While the consensus price target still stands at $101.88 (a slight downside from current levels), Mizuho analyst Dan Dolev sees more room to run.

In his September 2025 note, he reiterated an Overweight rating with a $145 price target, representing a 20% upside from today’s levels.

This may help investors connect the dots as to why markets decided to run into Robinhood as soon as the Fed pivoted, and why the future growth in this business has yet to be reflected in today’s prices.