What Makes Robinhood Markets (HOOD) an Investment Bet?

Fidelity Investments, an investment management company, recently released its “Fidelity Growth Strategies Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The Fidelity Growth Strategies Fund is a diversified domestic equity strategy with a focus on mid-cap growth investments. The fund focuses on investing in high-quality companies that demonstrate consistent growth and generate positive free cash flow. The fund’s Retail Class shares returned 22.74% in the second quarter, underperforming the 18.20% return of the benchmark Russell Midcap Growth Index. U.S. mid-cap growth stocks saw strong gains in Q2, bouncing back from a brief decline in early April following President Trump's tariff announcement. In addition, you can check the fund’s top 5 holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, Fidelity Growth Strategies 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 17.90%, and its shares gained 413.39% of their value over the last 52 weeks. On September 25, 2025, Robinhood Markets, Inc. (NASDAQ:HOOD) stock closed at $122.65 per share, with a market capitalization of $108.996 billion.

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

"A holding in financial services firm Robinhood Markets, Inc. (NASDAQ:HOOD) – which was added to the benchmark index on the last day of Q2 – also meaningfully contributed. The company's shares advanced 121% for the three months. Robinhood has been excelling on all fronts recently, with strong customer growth, rising balance sizes and the successful launch of new products, particularly in the cryptocurrency space. The platform's value proposition is gaining traction, especially among young investors, and is scaling at an impressive rate. We reduced the position to take some profits, but the stock was the fund's No. 7 overweight at quarter end."

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, compared to 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 Columbia Threadneedle Global Technology Growth Strategy's views on the company. 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.