Why Robinhood (HOOD) Shares Are Falling Today

What Happened?

Shares of financial services company Robinhood (NASDAQ:HOOD) fell 3.5% in the afternoon session after the company was passed over for inclusion in the prestigious S&P 500 index. 

The stock fell after S&P Dow Jones Indices announced that Interactive Brokers Group would be added to the index instead. This decision disappointed Wall Street, as Robinhood was seen as a strong candidate for inclusion.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Robinhood? Access our full analysis report here, it’s free.

What Is The Market Telling Us

Robinhood’s shares are extremely volatile and have had 55 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 7 days ago when the stock dropped 3.5% on the news that the major indices continued to pull back, with technology stocks accounting for most of the market's largest decliners. 

A key reason for this trend is that much of the recent market gains were concentrated in the "AI trade," which includes these large technology and semiconductor companies. So this could also mean that some investors are locking in some gains ahead of more definitive feedback from the Fed. 

Despite the downturn, some analysts viewed this as an opportunity to own some of the "Core AI winners." Dan Ives of Wedbush Securities commented, "In our view, the tech bull cycle will be well intact for at least another 2-3 years, given the trillions being spent on AI infrastructure/software/chips/power/apps looking ahead. This remains our tech playbook and investor roadmap." Additionally, mixed earnings reports from retailers, such as Target, have added to the market's weakness. Investors are closely monitoring these reports for insights into the broader economic health and the potential impact of new tariffs on inflation.

Robinhood is up 165% since the beginning of the year, and at $104.67 per share, it is trading close to its 52-week high of $115.02 from August 2025. Investors who bought $1,000 worth of Robinhood’s shares at the IPO in July 2021 would now be looking at an investment worth $3,006.

Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.