Why SoFi Stock Plummeted 32% in the First Half of 2026

SoFi Technologies (NASDAQ: SOFI) stock dropped 32% in the 2026 first quarter, according to data provided by S&P Global Market Intelligence. A short-seller report that put the market on edge, and investors have been scrutinizing the digital bank's performance with a fine-tooth comb.

Most things are going right

It's curious how low SoFi stock has fallen, considering how fast it's growing. In the 2026 first quarter, adjusted net revenue growth accelerated to 41% year over year. Its core business, lending, is driving the growth, with a 53% increase in adjusted net revenue. Lending products increased by 33%, and contribution profit was up 60%. Loan originations increased 68%, with healthy growth in all of its categories -- 51% in personal loans, 119% in student loans, and 137% in home loans, which is even more impressive as interest rates remain high.

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SoFi is onboarding new members at a rapid pace, with record add-ons of 1.1 million in the first quarter. The cross-selling strategy is strong, and cross-buy accelerated to 43%. SoFi has expanded into a complete digital financial app, and its financial services segment, which includes non-lending products like investing tools and bank accounts, is also growing fast. Revenue was up 41% year over year in the first quarter, and contribution profits increased 32%.

Management sees an enormous opportunity to attract new customers and convert them to new products. It's constantly adding new features and services to the platform, with many based around cryptocurrency, and it recently acquired artificial intelligence (AI) investing tool, Composer.

What's going wrong

In March, Muddy Waters put out a short-seller report alleging misleading accounting practices. SoFi vigorously denied the claims, but the damage had been done.

But it's more than that. SoFi stock is expensive, and carrying a premium valuation makes it susceptible to falling if there are any errors. While the company as a whole is demonstrating robust performance, it's not flawless. For example, its third segment, Tech Platform, has been a bit of a bust. Management likens it to the Amazon Web Services (AWS) of financial infrastructure, and it has highlighted how the technology has helped it release new features quickly. But it has been growing at mediocre rates at best, and sales were down 27% from the prior year in the first quarter.

At the current price, SoFi stock trades at 41 times trailing 12-month earnings, which is still expensive, but reasonable considering the company's future opportunity.

Jennifer Saibil has positions in SoFi Technologies. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.