What Makes Robinhood Markets (HOOD) a Strong Investment?

Fred Alger Management, an investment management company, released its “Alger Mid Cap Growth Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The letter highlighted the market outlook and top-performing and underperforming stocks. Equity markets continued their upward rally in the third quarter, with the S&P 500 Index up 8.12%. A confluence of improved economic conditions, strong corporate earnings, and anticipation of monetary easing drove the strong performance of the market in the quarter. The Class A shares of the fund outperformed the Russell Midcap Growth Index in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Alger Mid Cap Growth 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 1.17%, and its shares gained 312.73% of their value over the last 52 weeks. On November 12, 2025, Robinhood Markets, Inc. (NASDAQ:HOOD) stock closed at $132.98 per share, with a market capitalization of $119.574 billion.

Alger Mid Cap Growth Fund stated the following regarding Robinhood Markets, Inc. (NASDAQ:HOOD) in its third quarter 2025 investor letter:

"Robinhood Markets, Inc. (NASDAQ:HOOD) is a consumer-focused financial platform offering commission-free trading in stocks, options, futures and crypto, alongside retirement investing and subscription benefits via Robinhood Gold. In 2025 the company also broadened into wealth management with Robinhood Strategies (expert-managed portfolios), and announced Robinhood Banking and Robinhood Cortex as part of a wider push to deliver advisory, banking and AI-driven tools within the app. With over 25 million accounts, Robinhood holds roughly 15–20% market share among brokerage accounts, but only about 0.3% of the $70 trillion in U.S. household investable assets, according to management. Shares contributed positively to relative performance during the period after the company reported strong operating results, with revenues and earnings beating analyst estimates."

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 $1.3 billion in Q3 2025, indicating over 100% year-over-year growth. 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 the list of stocks Jim Cramer discussed. In addition, please check out our hedge fund investor letters Q3 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.