Is HOOD Stock Just Momentum or a Bubble Waiting to Pop? Analyzing Technical Overheating vs. Institutional Confidence in July 2025

Sam Favé
Jul 9
3 min read

Updated: Jul 14

Robinhood Markets, Inc. is known as one of the main financial services platform providers. Its platform allows users to invest in ETFs, stocks, gold, options, and cryptocurrencies. Additionally, HOOD offers several services, such as fractional trading, cash sweep, instant withdrawals, future contract services, and retirement programs.

Since the early days of the year, the HOOD stock has been characterized by a steady and exponential uptrend. Considered the start of this momentum, the share price has surged by approximately 150% YTD.

But is HOOD going to keep this positive momentum?

On the 30^th of June, its price closed at $93.63, up 12.7% from the previous close. The reason behind this is that the company announced a larger expansion of its crypto offerings in the European Union. Additionally, it was also announced the launch of US stocks and ETF tokens for all European customers. This move from Robinhood made its strategy clear: integrating cryptocurrency as a core component of the financial system.

On the 2^nd of July, HOOD closed at $97.98/share, up 19.47% from the previous week. It was its ATH (all-time high).

Robinhood stock chart shows an upward trend from Jan to July, with a current price of 94.40 USD. Notable rise in May and July.

However, this significant news significantly influenced HOOD’s share price. Making it extremely volatile.

Analyzing Revenues Growth

An important chart to take a look at is the one about Sales growth. Indeed, looking at the long term, Robinhood has generally done well for the last three years. This quarter, it reported a year-on-year revenue growth of 50%, beating Wall Street’s analysts by 1.2%.Analyzing despite the evident slowdown, analysts believe that the revenues will go up by 13.1% over the next 12 months.

Line graph of Robinhood's quarterly revenue from Q1 2020 to Q1 2025, shows a rising trend with a sharp increase in early 2025.

Moreover, another indicator that has increased is the number of users. In the last Q1, HOOD added 1.9 million funded customers, representing a 7.9% year-on-year growth. Besides this increment, there is the ARPU (Average revenue per user) that measures the amount of revenue the company obtains from each customer. On the chart below, the average growth of 43% over the last two years demonstrates the platform’s value.

Bar chart of Robinhood ARPU from Q1 '20 to Q1 '25. Red bars show fluctuations, peaking in Q1 '21 and Q1 '25. Y-axis ranges $0-$150+.

In the last quarter, the company reached the soil of 145$, a number grew faster than its funded customers.

Another company’s info to consider is its gross margin. The gross margin represents how much money the company obtains after paying all the costs of its products and services. HOOD has one of the best gross margins in the sector, which comes from a strong pricing power model. This broad margin allows the company to make larger investments and aim at higher future profits. Over the last two years, the company reached an average gross margin of 89.8%, meaning that Robinhood pays $10.20 for every $100 in revenue. (Last Q1 it reached a gross margin of 91.3%)

Despite all these optimal outcomes achieved by Robinhood, it was found that the HOOD’s price movements were highly correlated with BTC’s price trends.

Scatter plot showing correlation between Bitcoin price and rosewood price, with green data points and a trend line. Correlation: 0.902.

This graphic shows a strong correlation between the two prices. This indicator goes from -1 to 1, and results in 0.902, indicating a positive dependence on the BTC price trends.

In early 2025, the crypto-related revenue corresponded to only 13% of Robinhood’s income. Citi analysts identified a 92% correlation between HOOD and Bitcoin, indicating that larger crypto market trends are heavily influencing HOOD’s valuation. Another signal was given in Q4 2024, when HOOD’s crypto trading revenue surged by over 700% year-over-year, pushed by an increase in BTC’s price and retail activity. After the earnings’ release, the share jumped by 14%, highlighting how sentiment is tied to crypto assets.

Conclusion

Robinhood is a strong-based company that offers a broad variety of efficient and functional services. Its fundamental data is expected to keep growing over the year, but at the same time, the strong correlation with the crypto world is a sign of potential high volatility.

Personally, I would wait for the 30^th of July 2025. That’s the day on which the Q2 2025 Earnings will be published. The expectations are positive, and in the long term, I believe it might be a good asset to keep in the portfolio. In the short term, I’m not certain that this exponential upwards trend will keep existing, given the high correlation with Bitcoin. However, it is always important to do your own research, considering both fundamental and technical data and tools, to elaborate a right projection of HOOD’s price.