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Robinhood Beats Profit Estimates as Post-Election Trading Surge Lifts Volumes

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Robinhood (HOOD.O) exceeded expectations for fourth-quarter profit, driven by a sharp rise in equity, options, and cryptocurrency trading after Donald Trump returned to the White House. Following the announcement, Robinhood’s shares jumped more than 14% in after-hours trading.

The company’s transaction-based revenue soared 236% to $672 million compared to the same quarter a year ago, fueled by increased fees from options, equities, and crypto trades.

Crypto trading activity was a major growth driver, with revenue from that segment rising 700% during the quarter as bitcoin approached the $100,000 mark. Investors were optimistic about pro-crypto policies expected under the new Trump administration.

“It was no secret that Robinhood’s Q4 earnings were going to be great, driven primarily by a huge uptick in crypto-related revenues,” said John Wu, President of Ava Labs.

The surge in equity and crypto markets came after Trump’s election victory, as investors anticipated deregulation and pro-business policies that would favor U.S. corporations and the growing digital asset sector.

Robinhood reported an adjusted profit of $1.01 per share, well above analysts’ expectations of 44 cents, according to data from LSEG.

The company’s assets under custody increased by 88% to $193 billion during the quarter, and quarterly net interest revenue, driven largely by margin investing, rose 25% to $296 million.

“This was a big quarter for us, so we did over $1 billion in revenue for the first time in the history of the company, and that capped off what was a record-breaking year with over $3 billion in revenue for the whole year,” Robinhood co-founder and CEO Vlad Tenev said on the company’s post-earnings call.

AI and Crypto Propel Top 5 Tech Stocks of 2024

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The surge in artificial intelligence (AI) and cryptocurrencies has been the key driver for some of the biggest tech stock gains in 2024. The Nasdaq has risen by 33%, with AI being a major factor, while cryptocurrencies also experienced significant growth. Five companies have stood out due to their ties to these industries: AppLovin, MicroStrategy, Palantir, Robinhood, and Nvidia.

AppLovin, which started 2024 with a $13 billion market cap, has skyrocketed to over $110 billion, with its stock price up by 758%. Originally known for mobile gaming, the company has pivoted to ad technology powered by AI, significantly boosting profits. CEO Adam Foroughi highlighted a fast-growing e-commerce project that blends targeted ads with gaming, further fueling optimism around AppLovin’s future.

MicroStrategy, traditionally a business intelligence firm, saw its stock jump 467% in 2024. This increase is largely due to its strategy of buying bitcoin, which has made it the fourth-largest holder of the cryptocurrency. Its stockpile of over 444,000 bitcoins is now worth approximately $44 billion. Founder Michael Saylor, a prominent bitcoin advocate, has benefitted from the rally, especially after the election of Donald Trump, who gained significant crypto industry backing.

Palantir, the data analytics firm with close ties to the U.S. government, surged by 380% this year. Its success is driven by strong demand for AI technologies, especially from defense agencies. Despite political divisions within the company, its financial performance has exceeded expectations, with significant revenue growth forecast for 2025. CEO Alex Karp remains optimistic about continued demand for advanced AI solutions.

Robinhood also benefited from the crypto boom, with shares more than tripling. Revenue from crypto transactions rose 165%, highlighting the company’s growing role in facilitating crypto trades alongside stocks. CEO Vlad Tenev has emphasized that crypto will transform financial infrastructure, suggesting that Robinhood is well-positioned for long-term growth, particularly as crypto gains mainstream acceptance.

Lastly, Nvidia, the dominant player in AI hardware, has continued its impressive rise. After a 239% gain last year, Nvidia’s stock rose another 183% in 2024, bringing its market cap to $3.4 trillion. As the largest supplier of graphics processing units (GPUs) for AI applications, Nvidia has capitalized on the AI boom, with annual revenues soaring by over 94% in recent quarters. CEO Jensen Huang announced the full production of Nvidia’s next-gen AI chip, Blackwell, which is expected to generate significant revenue in the coming quarters.

In summary, the top tech stocks of 2024 have been fueled by rapid advancements in AI and crypto, which are reshaping industries and creating enormous growth potential. However, the future remains uncertain for these companies as the tech landscape evolves.

 

MicroStrategy Stock Turns Negative Despite Bitcoin Reaching $100,000 Milestone

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Cryptocurrency-related stocks took a downturn on Thursday, even after Bitcoin reached a historic milestone, surpassing $100,000 for the first time. MicroStrategy, a software company that has become closely associated with Bitcoin due to its large holdings of the cryptocurrency, saw its stock slip by 4.8%, reversing an earlier gain of more than 7%. Other crypto-linked companies also experienced losses, with Riot Platforms and Mara Holdings falling around 5% and 4%, respectively. Robinhood Markets and Coinbase Global also saw declines, with drops of 2.7% and over 3%, respectively.

MicroStrategy has increasingly become a proxy for Bitcoin itself, with the company’s stock price closely tied to the value of the cryptocurrency. Since 2020, when it first began purchasing Bitcoin, MicroStrategy’s stock has skyrocketed by more than 2,700%. Similarly, Coinbase, which operates a cryptocurrency exchange, and Robinhood, which allows users to trade Bitcoin, have seen their stocks rise due to their exposure to the digital currency. Meanwhile, Mara Holdings and Riot Platforms focus on Bitcoin mining and digital infrastructure.

Despite Thursday’s setbacks, these companies have posted significant gains year-to-date. MicroStrategy has surged nearly 512%, Robinhood has risen more than 205%, and Coinbase has increased by over 84%. Mara Holdings, however, has underperformed, with a gain of just over 5%.

Investor enthusiasm around Bitcoin has been fueled by expectations of a more crypto-friendly regulatory environment following the November election of President-elect Donald Trump. The belief that his administration would be more relaxed on cryptocurrency regulations has led to increased investments in the sector.

“This price surge, particularly with Bitcoin reaching $100,000, is significant not only as a psychological milestone but because it increases the likelihood of more institutional and traditional finance investment,” said Pascal St-Jean, CEO of 3iQ. St-Jean further noted that the growing accessibility of digital assets to investors also contributed to the price appreciation.

In addition, traders have shown increased interest in leveraged MicroStrategy exchange-traded funds (ETFs), which use debt to amplify potential gains from the underlying assets. According to JPMorgan, these leveraged ETFs accounted for a significant portion of the $11 billion inflow into crypto funds in November, reflecting the heightened investor activity in the cryptocurrency sector.