Why Robinhood Markets Stock Blasted Nearly 35% Higher in May

Robinhood Markets (NASDAQ: HOOD) had a scorching 2025 in the first few months of the year, and it continued to barrel ahead in May. The online brokerage's shares saw their value rise almost 35% across the month, according to data provided by S&P Global Market Intelligence, on the back of a well-received earnings report published on the last day of April, plus new and intriguing forays into cryptocurrency and related offerings.

Making coin from actual and digital coin

While the key figures in that first-quarter earnings release were more or less in the ballpark of analyst expectations, there was no ignoring the hot growth rates posted by Robinhood.

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Net revenue muscled 50% higher year over year to land at $927 million, thanks to robust year-over-year increases in transaction revenue from facilitating trades in assets such as cryptocurrencies (up by 100% to $252 million), options (56% higher at $240 million), and stocks (44% improvement to $56 million). Speaking of doubling (and then some), Robinhood's net income for the quarter surged 114% higher to $336 million.

On top of that, Robinhood announced it was substantially raising the total authorized amount of its current share repurchase program to $1.5 billion from the previous ceiling of $500 million.

Management wasn't necessarily thinking hard about stocks in that relatively warm month; no doubt inspired by its clientele's embrace of cryptocurrency, it doubled down on its involvement with digital coins and tokens. In mid-May it announced a deal to buy Canadian company WonderFo Technologies, which owns a pair of regulated cryptocurrency platforms. The total equity value of the deal is roughly 250 million Canadian dollars ($183 million).

In its press release touting the deal, Robinhood said that its own "accessible, low-cost, and secure platform will build upon WonderFi's mission and bring millions of Canadians greater access to crypto trading."

Blockchain stock trading

During the month, Robinhood and crypto technology were connected in a Bloomberg article. The story stated that the brokerage plans to construct a blockchain-based trading system for European investors to transact in U.S. securities. Although details of the apparent plan were scant, it's likely to utilize a digital token-based regime that would allow for those investors abroad to trade U.S. titles quickly and relatively cheaply.

Whether or not you're in line with the market's near-35% boost of Robinhood stock on these developments depends heavily on your feelings about cryptocurrency. If you're as bullish as Robinhood management on the future of this asset class, the company's shares are about the best play in the brokerage sphere right now. If not, it might be best for this recent wave of enthusiasm to subside. While I like the company as a business, I'd opt for being more cautious just now.

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Eric Volkman 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.