3 Beaten-Down Stocks That Could Take Off if Interest Rates Come Down This Year
Key Points
The stocks listed here are all down more than 20% this year.
Their valuations are pricey, but their exciting growth potential could make them enticing buys.
- 10 stocks we like better than Robinhood Markets ›
There's a new Fed chair with Kevin Warsh taking over, and there's plenty of debate about whether interest rates might come down this year. While inflation has been a concern of late, the president has been in favor of cutting rates, and with Warsh being his pick, there's the potential that rates may end up coming down in the near future.
If that does happen, there are three stocks that could surge. Robinhood Markets (NASDAQ: HOOD), Joby Aviation (NYSE: JOBY), and SoFi Technologies (NASDAQ: SOFI) could all stand to benefit from lower interest rates. Here's why the stocks could possess significant upside if rates come down this year, and whether they may be worth buying right now.
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Robinhood Markets
Shares of Robinhood are down more than 30% this year, and that may be to do with more of a bearish outlook on crypto. Bitcoin has been struggling to stay above $80,000, and that lack of excitement is bad news for Robinhood, whose app generates significant revenue from cryptocurrency trading. Its revenue from that segment was down nearly 50% during the first quarter of 2026.
Robinhood's business is broader than just crypto trading, but its customer base is young and typically takes on more risk than other investors and traders. Thus, when there's an appetite for greater trading and speculation, the company may thrive, and that may happen if interest rates come down.
Today, Robinhood's stock trades at 37 times earnings, which isn't cheap (the S&P 500 average is 27). But for a growing business, and one that's getting into prediction markets, which is likely to be a massive opportunity for the company, it may not be a bad buy on weakness right now. The stock is down around 50% from its 52-week high.
Joby Aviation
Joby Aviation stock has also been struggling this year, with its shares down by more than 22% thus far. The electric vertical take-off and landing (eVTOL) company is an early leader in its industry, and it hopes to launch its commercial air taxi operations later this year.
The problem with Joby, however, is that it's a cash-burning business, and its cash needs may grow as it expands its operations. During the first three months of the year, it used up $144 million just from its day-to-day operating activities, which is an increase from $111 million a year ago. Lower interest rates mean lower borrowing costs for Joby, which can be crucial to keeping its cash burn and losses as low as possible.
Joby, however, is a highly risky stock not only because of its cash burn but also because of its high valuation -- its market cap is $10 billion, which is steep for a company that hasn't commenced its core air taxi operations yet. While the eVTOL stock may have some enticing upside if rates come down, investors should tread carefully with Joby.
SoFi Technologies
Lower interest rates would create a more enticing loan environment, which would be great news for SoFi Technologies. The company provides a broad mix of digital financial services to its customers, with lending being a key part of its business. While the company continues to do well and it generated 43% revenue growth during the first quarter of the year, investors may be worried about a slowdown coming for the overall economy.
The sell-off, however, has been extreme, with SoFi's stock down an incredible 41% thus far in 2026. Part of the problem may have been its high valuation because even with the sharp decline, it's still not terribly cheap, trading at 35 times its trailing earnings.
For long-term investors, SoFi could be a compelling option to pick up right now, given its promising growth prospects as it expands and diversifies its operations and enters new markets. But with it still trading at a high price and plenty of economic uncertainty out there, it may take a while before the stock turns its fortunes around.
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David Jagielski, CPA 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.
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