Robinhood Markets (HOOD) Rallied due to Multiple Growth Catalysts

Baron Funds, an investment management company, released its “Baron FinTech Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the third quarter, the fund fell 4.29% (Institutional Shares) compared to a 1.90% decline for the FactSet Global FinTech Index (Benchmark). Since its inception, the fund has appreciated at an annualized rate of 11.10%, compared to a 4.00% return for the Benchmark. The market strength in the quarter was primarily driven by the resumption of Federal Reserve (the Fed) rate cuts and AI optimism. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-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 -12.04%, and its shares gained 229.09% of their value over the last 52 weeks. On November 17, 2025, Robinhood Markets, Inc. (NASDAQ:HOOD) stock closed at $115.97 per share, with a market capitalization of $104.279 billion.

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

"Robinhood Markets, Inc. (NASDAQ:HOOD), a provider of commission-free trading and investing tools, contributed to performance. Shares rose due to higher customer engagement and new product launches. The company continues to gain share in a large and growing market, with customer assets of $304 billion as of August 31, up 112% from a year ago. Trading activity remains robust across equities, options, and cryptocurrencies. During the third quarter, Robinhood expanded its prediction market offering with over 2 billion contracts traded, doubling the total from last quarter. The company also announced new features, such as a social trading platform aimed at boosting user engagement. Robinhood’s young customer base and expanding feature set support multiple avenues for increasing revenue per user over time. 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 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, 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 best aggressive growth stocks to buy. 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.