Robinhood (HOOD) Gained from the Continued Introduction of New Products

Gator Capital Management, an investment management company, released its fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. In Q4 2025, Gator Capital Management’s Gator Financial Partners, LLC returned 4.14%, Gator Offshore Partners, Ltd. returned 3.96%, and Gator Qualified Partners, LLC returned 6.10%. These compare to the S&P 500 Total Return Index 2.65% return and the S&P 1500 Financials Index’s 1.95% return. In 2025, Gator Funds returned 31.94%, 30.90%, and 16.92%, respectively, significantly outperforming both the broader market and the Financials sector benchmark. Please review the firm’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, Gator Capital Management highlighted stocks like Robinhood Markets, Inc. (NASDAQ:HOOD). Robinhood Markets, Inc. (NASDAQ:HOOD) is a US-based financial services company that provides a trading platform for stocks, exchange-traded funds, American depository receipts, options, gold, and cryptocurrencies. On February 17, 2026, Robinhood Markets, Inc. (NASDAQ:HOOD) stock closed at $75.44 per share. One-month return of Robinhood Markets, Inc. (NASDAQ:HOOD) was -28.78%, and its shares are up 27.37% over the past twelve months. Robinhood Markets, Inc. (NASDAQ:HOOD) has a market capitalization of $67.996 billion.

Gator Capital Management stated the following regarding Robinhood Markets, Inc. (NASDAQ:HOOD) in its fourth quarter 2025 investor letter:

"During 2025, we had strong performance and outperformed both the broader market and the Financials sector benchmark. The two major drivers were our positions in Robinhood Markets, Inc. (NASDAQ:HOOD) and Anywhere Real Estate.

We entered 2025 with Robinhood as our largest position after it had a strong 2024. The stock had another strong year as the company continued to introduce new products, which drove accelerating growth. We hedged the position throughout the year as the valuation increased and currently have minimal exposure to the stock. One factor in hedging the position is that we are uncomfortable with the regulatory stability of prediction markets. We believe prediction markets have allowed people in non sports gambling states and people 18-20 years old to gamble on sports through their brokerage accounts because prediction markets are considered exchanges and not casinos."

Robinhood Markets, Inc. (NASDAQ:HOOD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 77 hedge fund portfolios held Robinhood Markets, Inc. (NASDAQ:HOOD) at the end of the third quarter, compared to 85 in the previous quarter. Robinhood Markets, Inc. (NASDAQ:HOOD) delivered a record 1.3 billion in revenue for Q4 2025, an increase of 27% year-over-year. 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 a list of best S&P 500 stocks with highest upside potential. In addition, please check out our hedge fund investor letters Q4 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.