Why Robinhood Stock Skyrocketed 204% in 2025

Shares of Robinhood Markets (NASDAQ: HOOD) stock soared 204% in 2025, according to data provided by S&P Global Market Intelligence. It has been reporting blowout growth and rolling out many new products, but things might be changing in 2026.

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A blowout year for Robinhood

Robinhood is known for its trading platform, but it's expanding in multiple ways. Beyond stock trading, it now offers hundreds of cryptocurrencies for trading as well as options. It also offers a premium membership program, Robinhood Gold, which includes several perks, such as a higher interest rate on uninvested cash and matching retirement fund contributions. It's launching bank accounts and already offers a credit card, and it's aiming for customers to engage with its full ecosystem of products. Many of its products are live in multiple global locations, but it has a long growth runway as it introduces more products in more regions.

It reported stunning growth throughout 2025, with revenue doubling in the third quarter and net income rising 271% year over year. Total platform assets increased 119% to $333 billion, funded accounts increased 10% year over year to 26.8 million, and Gold members rose 77% to reach 3.9 million. That's a large and growing consumer base to monetize.

The company was in major launch mode last year, introducing new products frequently, including Robinhood Social, a social media app, and Robinhood Prediction Markets, an online betting platform. It also rolled out many new features for traders, including multiple brokerage accounts and shorting. Management says there's a lot more coming.

Why the market is getting cautious

It doesn't look like Robinhood is slowing down, but Robinhood stock has dropped almost 20% over the past three months.

One reason investors are becoming cautious is that the company is highly exposed to cryptocurrency. Revenue from cryptocurrency trading increased more than 300% year over year in the third quarter to $268 million out of a total of $730 million in transaction revenue. Bitcoin has been falling, and that could have a negative impact on Robinhood's growth. Options trading revenue increased 50% to $304 million, and equities revenue was only $86 million.

Since trading is still its core service, its growth is strongly connected to market growth. If the market begins to slow down, Robinhood may also slow down.

Finally, Robinhood stock is quite expensive, trading at a P/E ratio of 49. That could be justified for a company growing as fast as Robinhood, but only if the market is confident about its future. As investors become more concerned, the valuation is falling.

Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.