TLDR
- Robinhood stock has surged over 400% in the past 12 months, driven by strong appeal among younger investors
- 75% of Robinhood’s customers are millennials or Gen Z, who are investing at younger ages than previous generations
- The Fed’s first rate cut of 2025 (25 basis points) should boost trading volumes as investors move away from low-risk investments
- Lower interest rates will make cryptocurrency and stock trading more attractive, potentially increasing Robinhood’s transaction revenues
- Robinhood’s Gold subscription tier grew 76% year-over-year to 3.5 million subscribers in Q2 2025
Robinhood stock has become one of the market’s biggest winners over the past year. The trading platform has seen its shares climb over 417% in 12 months.
The company went public in July 2021 during a difficult market environment. Since then, it has faced various challenges but recently found its footing.
The Federal Reserve cut interest rates by 25 basis points on September 17, 2025. This marked the first rate cut of the year, bringing rates down from 4.25%-4.50% to 4.00%-4.25%.
The Fed also signaled two more cuts before year-end. This follows three rate cuts made in 2024.
Young Investors Drive Platform Growth
Robinhood has carved out a unique position in the brokerage space. The platform appeals strongly to younger demographics through its user-friendly app design.
Analytics firm Comscore found that 33% of 18-to-34-year-old brokerage shoppers have Robinhood accounts. This compares to just 18% overall across all age groups.
At the end of 2024, 75% of Robinhood’s customers were millennials or Gen Z. A Nasdaq survey showed Gen Z’s use of Robinhood contributed to a 39% increase in platform usage from 2022 to mid-2024.
Gen Z investors are starting to invest at younger ages than previous generations. This trend positions Robinhood well for long-term customer relationship building.
The platform doesn’t offer the same breadth of services as traditional brokerages like Fidelity or Charles Schwab. However, it has captured the attention of younger investors who value simplicity and accessibility.
Rate Cuts Create Multiple Growth Catalysts
Lower interest rates should benefit Robinhood in several ways. When rates fall, investors typically move money from safe investments like CDs and Treasury bills into riskier assets.
Many investors parked cash in risk-free investments paying 4%-5% yields during the high-rate environment of 2022-2023. As these yields shrink, more money should flow into stocks and cryptocurrencies on Robinhood’s platform.
Cryptocurrency trading has become a major revenue driver for the company. In the first half of 2025, crypto trades generated 37% of transaction revenue and 22% of total revenue.
Crypto trading revenue has shown strong growth throughout 2024 and into 2025. The segment grew 161% year-over-year in Q2 2024, peaking at 700% growth in Q4 2024, before moderating to 98% in Q2 2025.
Lower rates could make cryptocurrencies like Bitcoin and Ethereum more attractive as hedges against dollar devaluation. This should drive additional trading volume on the platform.
Robinhood earns money from margin loans and cash sweep accounts, which accounted for 12% and 6% of revenue respectively in the first half of 2025. While lower rates will reduce this interest income, they should stimulate more margin trading activity.
The company’s subscription service, Robinhood Gold, has shown strong growth. The $5 monthly service offers benefits like interest-free margin and higher yields on cash.
Gold subscribers grew 76% year-over-year to 3.5 million in Q2 2025. Subscription revenue jumped 67% to $82 million in the first half of 2025.
From 2020 to 2024, Robinhood doubled its funded customers from 12.5 million to 25.2 million. Assets under custody more than tripled from $63 billion to $193 billion during this period.
Revenue grew at a 32.5% compound annual growth rate over this timeframe. This growth occurred even as higher interest rates temporarily reduced trading activity in 2022.
Analysts expect revenue and adjusted EBITDA to grow at 22% and 30% annual rates respectively from 2024 to 2027. The company trades at 38 times next year’s adjusted EBITDA with an enterprise value of $108.6 billion.
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