Should You Forget Robinhood and Buy SoFi Instead?

Fintech stocks have been on many investors' radars lately, and two of the top choices are digital investing platform Robinhood (NASDAQ: HOOD) and online financial services company SoFi Technologies (NASDAQ: SOFI).

Both companies have unique opportunities in fintech, but I think SoFi has a few key advantages that make it a better long-term stock. Here's why.

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Why Robinhood and SoFi are so popular among investors

SoFi has attracted significant investor attention, as it has successfully expanded its financial services, offering members everything from checking to savings accounts to personal loans and car insurance. The company's extensive service offerings and ability to appeal to tech-savvy younger consumers have helped it increase its customer count to 12.6 million in its fiscal third quarter (ended Oct. 28), a 35% increase from the year-ago quarter.

Revenue also is on this rise, jumping 38% to $950 million as more members lock in to SoFi's widening menu of services, and non-GAAP (generally accepted accounting principles) adjusted earnings increased 120% to $0.11 per share.

But as rapid as SoFi's growth has been, Robinhood's has been just as impressive. The company's revenue doubled to $1.2 billion in the third quarter, and diluted earnings per share surged 259% to $0.61.

Robinhood has introduced new services (though more limited than SoFi's) beyond buying and selling stocks and crypto, such as retirement and savings accounts through its paid Robinhood Gold membership.

With both companies reporting rapidly rising revenue and earnings and attracting lots of new customers, it's not surprising to see SoFi's shares up 350% during the past three years and Robinhood up 1,000%.

Why SoFi is the better stock

When some investors see that one stock has higher returns than another, they automatically assume that the one with the better performance is the one to buy. But, although Robinhood could still be a good long-term investment, I think SoFi is the better option for a couple of reasons.

The first is that it has a more diversified list of fintech services. SoFi's broad range of financial products could help the company weather an economic and market slowdown, because members will continue to have a wide range of services to choose from, be it student loan refinancing, personal loans, credit card consolidation, renters insurance, and more. Beyond that, demand for many of these services is less subject to economic turmoil.

Robinhood, in contrast, relies on its members making frequent trades on its platform, with a high concentration on options and crypto trading, which accounted for 78% of transaction-based revenue in Q3. Robinhood could eventually add more services, but at this point, SoFi is significantly more diversified -- a clear advantage in an economic slowdown.

The second reason builds on the first and reflects the fact that the market has been on a bull run since 2022, just one year after Robinhood went public. This means the company and its shareholders haven't experienced a market downturn yet. When difficult times come, and there are already some worrying economic indicators -- with job layoffs reaching a four-year high in 2025 -- Robinhood's customers will likely pull back on some of their riskier investment habits and trade less.

This means that the very thing that's been the key to Robinhood's impressive equities and crypto gains for years could be a huge headwind when an eventual bear market emerges.

For these reasons, I think adding SoFi to your portfolio over Robinhood may be the better move right now, if you have to choose between the two. Of course, if you want to buy a little of both, SoFi and Robinhood could be good stocks to own -- just keep an eye on any significant economic and market changes.

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.