Cathie Wood's Fintech Bet Just Hit a New 52-Week High -- Here's Why I'm Not Selling

SoFi Technologies (SOFI) has been on a tear lately, hitting a new 52-week high recently. As an investor who has been following Cathie Wood's ARK Invest, I've been keeping a close eye on this fintech stock. Here's why I'm not selling my shares anytime soon.

Strong Tailwinds

SoFi has been benefiting from several tailwinds recently. First, there's been a surge in demand for personal loans, with PGIM Fixed Income investing $350 million in mid-2024 and closing another $525 million personal loan securitization agreement with SoFi in late 2024. PGIM, which manages about $860 billion in assets, called SoFi's personal loans an "attractive investment opportunity." This increased demand for personal loans has contributed to SoFi's growth and profitability.



Additionally, SoFi is rapidly expanding its capabilities as a third-party loan origination platform, which generates a growing stream of capital-light fee income. This expansion has helped SoFi diversify its revenue streams and reduce risk.

Potential Benefits from Lower Interest Rates and Political Tailwinds

As interest rates come down, SoFi could benefit from lower deposit costs and increased demand for loans. Plus, the Trump administration's favor for looser regulations on banks and lower corporate taxes could further benefit SoFi.

Strong Financial Performance

In the third quarter of 2024, SoFi's membership base grew by 756,000, its highest one-quarter new member additions ever. Revenue grew by 30% year over year, and SoFi produced $214 million in net income compared with a $301 million net loss a year prior. This strong financial performance has contributed to investor confidence in SoFi's stock.

Cathie Wood's ARK Invest

ARK Invest, led by Cathie Wood, has been a significant investor in SoFi Technologies. ARK Invest holds SoFi stock in several of its ETFs, including the ARK Fintech Innovation ETF (ARKF) and the ARK Innovation ETF (ARKK). ARK Invest's faith in SoFi has likely contributed to the stock's recent surge in price.

Why I'm Not Selling

SoFi's recent tailwinds, strong financial performance, and the support of Cathie Wood's ARK Invest have all contributed to the stock's recent surge. While it's true that the stock has hit a new 52-week high, I'm not selling my shares anytime soon. SoFi's growth prospects, driven by its expanding loan origination platform and strong financial performance, make it an attractive investment opportunity.

Moreover, Cathie Wood's ARK Invest has a history of investing in innovative, disruptive companies, and SoFi fits that mold. With ARK Invest's continued support and SoFi's strong fundamentals, I believe the stock has the potential to continue its upward trajectory.

In conclusion, SoFi Technologies' recent surge in stock price and new 52-week high can be attributed to several specific factors, including increased demand for personal loans, expanding capabilities as a third-party loan origination platform, potential benefits from lower interest rates and political tailwinds, strong financial performance, and the support of Cathie Wood's ARK Invest. As an investor, I'm not planning to cash in on my shares anytime soon, as SoFi's growth prospects and strong fundamentals make it an attractive investment opportunity.