Robinhood Markets (HOOD) is expanding beyond its core crypto and stock trading services by stepping into the banking and wealth management space. The fintech company also plans to integrate AI (artificial intelligence) to provide personalized financial advice tailored to millennials and Gen-Z. Despite the announcement, Robinhood’s shares fell over 7% on Wednesday, following a broader market downturn.
Robinhood’s Next Big Bet
Robinhood has evolved beyond its early reputation as a meme stock hub to establishing itself as a popular trading platform catering to a diverse range of retail investors. Now, the company is expanding its offerings into the banking and wealth management sector. The move aligns with the company’s strategy to deepen its role in shaping users’ financial decisions amid the rising demand for professional guidance among retail investors.
On Wednesday, Robinhood announced the launch of Robinhood Strategies, a wealth management service designed for its premium Gold subscribers. The service will include a 0.25% annual advisory fee, capped at $250. The company’s expansion into wealth management seeks to create a complete financial ecosystem, seamlessly connecting trading with long-term investing.
Additionally, the company launched Robinhood Banking, a new service providing checking and savings accounts with a 4% annual percentage yield (APY). The accounts come with FDIC insurance coverage up to $2.5 million through a partnership with Coastal Community Bank (CCB). Robinhood is also set to introduce Robinhood Cortex, an AI-driven investment tool designed to deliver real-time market analysis and insights.
Notably, Robinhood Strategies starts on Thursday, while Robinhood Banking and Cortex will roll out later this year.
Is HOOD Stock a Good Buy?
Overall, Wall Street analysts remain cautiously optimistic about HOOD stock. According to TipRanks consensus, HOOD stock has a Moderate Buy rating, based on 14 Buys and five Holds assigned in the last three months. The Robinhood Markets share price target of $70.94 implies a 58.6% upside potential over current trading levels.
