Robinhood stock delivered on big returns for investors. But for shorter-term investors, there are some early signs of caution.
Since the start of 2025, Robinhood Markets has gained an impressive 262.28% year to date, boosted by its expansion into credit cards and other financial instruments, crypto trading and betting and prediction markets.
But the stock's recent move below short-term moving averages signals a warning for investors paying attention.
"It is on my radar because I think right now it is a little bit extended," Vibha Jha, longtime top performer in the U.S. Investing Championship, tells Investor's Business Daily's "Investing with IBD" podcast.
On a shorter-term basis, Robinhood stock has fallen below its 10-day moving average, and has recently undercut its 21-day exponential moving average. Stocks undercutting their short-term moving averages can sometimes indicate an early exit signal, but they should be evaluated as among many signals and not used solely on their own.
Audio Version Of Podcast
The Other Side: Reasons To Stay In Robinhood Stock
Investors that still want to stay in Robinhood can find solace in a seemingly orderly pullback. Robinhood stock appears to still have strong institutional support, with its fund ownership rising since the start of the year. Fund ownership of Robinhood stock currently stands at 40%, with 1,800 funds owning the stock in September.
"I love that they have really good fundamentals," said Jha, who points to the fintech company's strong earnings. In July, Robinhood reported strong earnings growth of 42 cents per share with revenue rising to $989 million, both beating estimates of 31 cents per share and $915 million in revenue.
While the stock sank after those earnings, it has since hit fresh highs. In September, the stock saw a boost after CEO Vlad Tenev said the company passed $4 billion in event contracts traded through its prediction markets.
Many financial firms are pushing into prediction markets, including sports betting, taking on pure-plays such as DraftKings and FanDuel owner Flutter Entertainment.
Investors should still prepare for the stock to move as earnings season continues. Robinhood is set to report Q3 2025 earnings on Nov. 5.
Robinhood stock also retains a spot in IBD's Leaderboard as part of the Leaders Watchlist, enjoying continued popularity among its predominantly young userbase.
Tap here to watch the full podcast featuring Vibha Jha.
Follow Mike Juang on X at @mikejuangnews and on Threads at @namedvillage.
