Higher Trading Activity Lifted Robinhood Markets (HOOD) in Q2

Baron Funds, an investment management company, released its “Baron FinTech Fund” second quarter 2025 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund returned 9.26% (Institutional Shares) compared to a 13.82% return for the FactSet Global FinTech Index (Benchmark). Since its inception, the fund has appreciated at an annualized rate of 12.53%, compared to a 4.55% return for the Benchmark. The fund managed gains in a period of heightened volatility. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, Baron FinTech Fund highlighted stocks such as Robinhood Markets, Inc. (NASDAQ:HOOD). Robinhood Markets, Inc. (NASDAQ:HOOD) is a financial services platform that allows users to invest in stocks, exchange-traded funds (ETFs), American depository receipts, options, gold, and cryptocurrencies. The one-month return of Robinhood Markets, Inc. (NASDAQ:HOOD) was 1.10%, and its shares gained 414.98% of their value over the last 52 weeks. On August 25, 2025, Robinhood Markets, Inc. (NASDAQ:HOOD) stock closed at $107.94 per share, with a market capitalization of $95.924 billion.

Baron FinTech Fund stated the following regarding Robinhood Markets, Inc. (NASDAQ:HOOD) in its second quarter 2025 investor letter:

"Robinhood Markets, Inc. (NASDAQ:HOOD), a provider of commission-free trading and investing tools, contributed to performance. The stock benefited from higher trading activity amid elevated market volatility and strong performance across both equity and cryptocurrency markets. The company continues to gain share in a large and growing market, with customer assets of $255 billion up 89% from a year ago. In addition, Robinhood announced new crypto-related products—including tokenized trading of U.S. stocks and private assets—broadening its addressable market and further boosting investor sentiment. We continue to own the stock due to its long-term earnings potential, driven by strong account growth, rising client assets, and rapid pace of product innovation."

Robinhood Markets, Inc. (NASDAQ:HOOD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 85 hedge fund portfolios held Robinhood Markets, Inc. (NASDAQ:HOOD) at the end of the second quarter, which was 76 in the previous quarter. Robinhood Markets, Inc. (NASDAQ: HOOD) reported revenues of $989 million in Q2 2025, indicating a 45% year-over-year growth driven by strong business performance. While we acknowledge the potential of Robinhood Markets, Inc. (NASDAQ:HOOD) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Robinhood Markets, Inc. (NASDAQ:HOOD) and shared top stocks to buy from Cathie Wood stock portfolio. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.